Day Trading For Dummies, 4th Edition

Understand how day trading works—and get an action plan

Due to the fluctuating economy, trade wars, and new tax laws, the risks and opportunities for day traders are changing. Now, more than ever, trading can be intimidating due to the different methods and strategies of traders on Wall Street. Day Trading For Dummies provides anyone interested in this quick-action trading with the information they need to get started and maintain their assets. 

From classic and renegade strategies to the nitty-gritty of daily trading practices, this book gives you the knowledge and confidence you''ll need to keep a cool head, manage risk, and make decisions instantly as you buy and sell your positions. 

• New trading products such as cryptocurrencies
• Updated information on SEC rules and regulations and tax laws
• Using options to manage risk and make money
• Expanded information on programming

If you’re someone who needs to know a lot about day trading in a short amount of time, this is your place to start.

Introduction 1

About This Book 2

Foolish Assumptions 2

Icons Used in This Book 3

Where to Go from Here 3

Part 1: Getting Started With Day Trading 5

Chapter 1: So You Want to Be a Day Trader 7

Defining Day Trading: It’s All in a Day’s Work 8

Committing to Trading As a Business 11

Identifying the Personality Traits of Successful Day Traders 13

Seeing What Day Trading Is Not 15

Chapter 2: Introducing the Financial Markets 19

Having a Firm Grasp How Markets Work 20

Opening an Account and Placing an Order 24

Defining the Principles of Successful Day Trading 25

Understanding Risk and Return 27

Differentiating Trading, Investing, and Gambling 34

Managing the Risks of Day Trading 37

Chapter 3: Assets 101: Stocks, Bonds, Currencies, and Commodities 39

Grasping the Different Things to Trade 39

Defining a Good Day Trading Asset 40

Taking a Closer Look at Stocks 46

Examining Bonds 52

Cashing In with Currency 55

Considering Commodities and How They Trade 56

Chapter 4: Assets 102: ETFs, Cryptocurrency, Options, and Derivatives 59

Explaining Exchange-Traded Funds (ETFs) in Plain English 60

Getting Familiar with Cryptocurrency 64

Dealing in Derivatives 69

Comprehending Arbitrage and the Law of One Price 74

Chapter 5: Increasing Risk and Potential Return with Short Selling and Leverage 79

Understanding the Magic of Margin 80

The Switch-Up of Short Selling 84

Leveraging All Kinds of Accounts 87

Borrowing in Your Trading Business 91

Assessing Risks and Returns from Short Selling and Leverage 93

Chapter 6: Managing Your Money and Positions 95

Setting Your Earnings Expectations 96

Gaining Advantage with a Money-Management Plan 99

Examining Styles of Money Management 101

Seeing How Money Management Affects Your Return 106

Planning for Your Profits 108

Chapter 7: Planning Your Trades and Trading Your Plans 111

Starting to Plan Your Trades: Just the Basics, Please 112

Closing Out Your Position 122

Maxims and Clichés That Guide and Mislead Traders 123

Part 2: Developing Your Trading Strategy 129

Chapter 8: Picture This: Technical Analysis 131

Comparing Research Techniques Used in Day Trading 132

Using Technical Analysis 136

Reading the Charts 143

Considering Different Approaches to Technical Analysis 148

Avoiding Technical-Analysis Pitfalls 150

Chapter 9: Fol