Index Trading VS. Stock Day Trading
I've been successfully trading the index over 6 years now. Some seem to think that this somehow has something to do with day trading stocks. Or, at least they try to compare it to stock day trading.
We prefer Index Trading, there really is no comparison to day trading stocks. With stock trading there are Many things you really need to know about the companies you will be buying or selling short. In fact, the majority of stock traders Never sell a stock short or bet against the company (which means you are betting the stock price will drop). Not being able to profit in a down trending market is a Major setback for an investor.
With Index trading we are only concerned with index movement. We don't even care if it is going up or down. We just want the index price to move! We can place our trades short or long with equal eaze. There is no market or company research to do, as we really don't care what the individual companies are doing.
For instance, if you were looking at a company with the thought of buying stock, you would no doubt want to know what the PE ratio was, who the board members or major stock holders are. You should want to know if they are buying or selling. You might want to know what the BIG fund companies are doing in that sector (finance, health care, big pharma, tech sector etc), and many other factors (or at least you should). Then you might use a chart to time your entry or exit strategy.
With index trading, it is all about the timing. You just want to know what the highest probability is for the next few minutes. Then you make your trade accordingly. If you have dependable data supporting your chart set ups, then you should take winning trades most of the time - Regardless of the fundamentals listed above!
By now you should know that what is happening right now in the market is controled by emotion. More correctly traders emotion. We can tune into that emotion with simple set ups, and go for a short ride. We might even get into a long ride, but we are going to set up protection that will help us no matter which way it goes. When the index moves against us, we will get out fairly quickly. When it moves in our favor, we will let it ride as long as we can.
Now, if you just enjoy doing all that market research, go ahead. However, we have taught hundreds of stock investors to trade the index (mostly mini Dow and the S&P Emini), and the majority of them never go back to stocks!
Another advantage of index trading is the lower funding requirement. Stock day traders will need at least $25,000 in their accounts (depending on how many trades they make), where index traders can get started for $2,000 or less!
Index trading also offers a lot better leverage that stocks. The emini indicies are comparable to the leverage of stock options, without all the headaches and limitations.
After the financial meltdown, I predict there will be MANY more investors looking at index trading as a Great alternative to stocks!
We prefer Index Trading, there really is no comparison to day trading stocks. With stock trading there are Many things you really need to know about the companies you will be buying or selling short. In fact, the majority of stock traders Never sell a stock short or bet against the company (which means you are betting the stock price will drop). Not being able to profit in a down trending market is a Major setback for an investor.
With Index trading we are only concerned with index movement. We don't even care if it is going up or down. We just want the index price to move! We can place our trades short or long with equal eaze. There is no market or company research to do, as we really don't care what the individual companies are doing.
For instance, if you were looking at a company with the thought of buying stock, you would no doubt want to know what the PE ratio was, who the board members or major stock holders are. You should want to know if they are buying or selling. You might want to know what the BIG fund companies are doing in that sector (finance, health care, big pharma, tech sector etc), and many other factors (or at least you should). Then you might use a chart to time your entry or exit strategy.
With index trading, it is all about the timing. You just want to know what the highest probability is for the next few minutes. Then you make your trade accordingly. If you have dependable data supporting your chart set ups, then you should take winning trades most of the time - Regardless of the fundamentals listed above!
By now you should know that what is happening right now in the market is controled by emotion. More correctly traders emotion. We can tune into that emotion with simple set ups, and go for a short ride. We might even get into a long ride, but we are going to set up protection that will help us no matter which way it goes. When the index moves against us, we will get out fairly quickly. When it moves in our favor, we will let it ride as long as we can.
Now, if you just enjoy doing all that market research, go ahead. However, we have taught hundreds of stock investors to trade the index (mostly mini Dow and the S&P Emini), and the majority of them never go back to stocks!
Another advantage of index trading is the lower funding requirement. Stock day traders will need at least $25,000 in their accounts (depending on how many trades they make), where index traders can get started for $2,000 or less!
Index trading also offers a lot better leverage that stocks. The emini indicies are comparable to the leverage of stock options, without all the headaches and limitations.
After the financial meltdown, I predict there will be MANY more investors looking at index trading as a Great alternative to stocks!
About the Author:
Mini-Dow Index Trading Made Simple. Discover how to build your trading income. Get Doug's Debt-Free Report. Read his blog here.
posted by Debt Consolidation Loan at
6:47 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home