What does it take to be a day trader?

Be wary of companies buying back their own stock

Since the 2008 US mortgage crisis, which resulted in a worldwide recession, markets have been extremely volatile and day traders have been making hay while the sun shines. We hear more and more about day traders and very often they are cast in very detrimental terms. Many people see them as opportunist, speculators and a pest for traditional long-term investors but they are a vital element of the market. Whether “traditional” investors like it or not it is very often the short term day traders who inject liquidity into the marketplace allowing others to trade more freely. So, what does it take to be a day trader?

Confidence in your decisions

If you ever come across a day trader they will seem very confident in their own decisions and often dismissive of other views. This is a vital component of the personality of the day trader, the ability to make snap decisions using limited information and have the nerve to act on them. Day trading by its very definition is often extremely quick with investors dealing on very small margins but regular traits. Continue reading “What does it take to be a day trader?”

Why buying stocks on momentum makes perfect sense

Momentum trading

Day traders and short-term investors do not get the best press despite the fact that they have a significant impact on market liquidity. Often accused of dealing on inside information or with preferential knowledge they attract unwanted attention. However, many short-term investors simply buy stocks on momentum and more often than not they will see a return. So, why does buying stocks on momentum make perfect sense?

See the stock market as an information exchange

If you take a step back and look at worldwide stock markets as “information exchanges” you may be able to appreciate why momentum buying is often successful. The price of any asset, whether a share, bond or precious metal is dictated by information which is in the public domain and also information which is shielded from the general public – i.e. inside information. Whether the regulators like it or not, the price of a share is dictated by an array of information some of which is legal and some of which is not. Continue reading “Why buying stocks on momentum makes perfect sense”

Is Donald Trump good for the US stock market?

Common stock market sayings

As the Dow Jones Industrial Average index continues to flirt with a record high many are asking the question, is Donald Trump good for the US stock market? Despite the doom and gloom surrounding his presidency the US stock market is booming and many are now wondering whether the so-called “experts” have got it all wrong. So, is Donald Trump good for the US stock market?

Business credentials of Donald Trump

Whether you like it or not, Donald Trump has been there, done it and bought the T-shirt having survived bankruptcy to rise again from the ashes. This is a man who has faced is critics with a confidence that few can carry off whether indeed he actually believes it behind the scenes. In the world of business you need to have confidence in yourself, confidence in your decisions and an ability to fight your corner. Surely Donald Trump has done enough to suggest he has all of these? Continue reading “Is Donald Trump good for the US stock market?”