Are you not investing in stock market because it requires huge fund and effort?

If your answers are true, this article will show you how to make money by stock trading.

Let's first see why winning money in stock market is simple.
1. Stock market investment requires much less investment than property investment.
2. It does not require much time.
3. But, the biggest benefit is quick liquidation.

Earlier, when day trading was considered as the forte of the professional stockbrokers and avid stock market followers. Availability of online information of various aspects of stock market and on line stock broking made stck market day trading simple.

Benefits of Stock day trading over wing trading

Day trading is much less stressful than holding stocks overnight. You don't have lost sleep because of your overnight holds but its a nice feeling to be able to start the morning in cash and not care what the markets doing at the open.

If you are doing day trading in stock, you have the advantage of being able to just shut things down for the day if the market is not acting well. A swing trader, need to sit and watch all day because he had some positions on.

One of the biggest benefit for day trading is commission structure. If a swing trader pays $9.95 per trade, a day trader might only pay $0.006/share. The reduced commission helps you to book partial profits or to just cut & run if you see danger on the horizon. A stock market day trader can manage position sizing, risk management and buying power more effectively and efficiently.

Here is an example of simple day trading

Lets assume ABC ($8/share) and XYZ ($80/share) are two companies and you want to invest $200 for trade. After some analysis, you found that ABC dictates a 25 cent stop and the stop on XYZ is one dollar.

In this case, you can buy 800 shares of ABC and 200 shares of XYZ. In other words, you have $6,400 worth of ABC and $16,000 worth of XYZ. Now, if both the stock moves 2%, you will make $128 with ABC and $320 in XYZ.

The beauty of this simple trade, you make profit 2.5 times even though your risk remains same.