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Day Trading the Markets

Day traders are always under strict scrutiny. In the stock market, this scrutiny can be quite rough at times. There are regulations in place to protect companies from malicious day trading activity, and although this type of trading is rare, it does happen, hence the SEC protections in place. The definition that comes under scrutiny is “pattern day trader,” and it can be described as someone that executes four or more day trades in five or fewer days. Unfortunately, this can be really easy to do, even if it is an accident. All you need to do is buy and sell the same security over the course of a single trading day. It is a stock broker’s job to identify and label these traders in order to avoid fines and punishments of their own.

If you get pegged by the SEC as a pattern day trader, you become subject to specific rules. For starters, the amount of money that you must keep in your account becomes a little more difficult to achieve. You will need to have $25,000 in a margin account at any given time. Margin accounts are a bit more difficult to get than a normal account since you have to apply for them and you become subject to credit checks. Again, your broker is required to check these on a daily basis and make sure you are compliant. And if you do commit too many day trades on an accidental basis, you will need to wait three months without a single day trade occurring during that time before you will lose your classification and can shed the extra requirements.

There are a few other minor things that you need to do, too, but the end result is the same: day trading can be a hassle. Luckily, there is an easy solution to this. At this moment, with binary options, you can day trade every day for as long as you’d like without any sort of extra rules or stipulations being applied to your situation. One of the great things about binaries is that you can make similar profits as day traders do, but without as much risk. You will be limited in your choices as to what stocks you can actually do this with–which is a definite negative attribute–but you are more than compensated for this with the lower risk, fewer regulations, and the ability to also trade other types of assets from the same trading platform.

Binaries present a great opportunity, but you still will need to work for it. You can easily earn a 72 percent return on a trade that lasts just 60 seconds, but this doesn’t mean that it’s easy. You still will need to do your research and identify a good asset, and a perfect entry point. Even the most well prepared trader will be wrong often. You just need to make sure that you’re right often enough to keep making a profit.

The secret benefit to binaries is that you don’t need huge amounts of movement to make a profit. Even a change of a penny will still give you the full return. A penny change while you are day trading is a loss thanks to the costs associated with stock broker trading. Binary options brokers make their profits in a slightly different way than the straight commission that stock brokers charge, so you can actually make more money this way if you are consistently correct with your predictions. This is obviously really tough to do, but it is possible. Stock traders might feel reluctant to leave the comforts of their stock brokerage, but once they see the benefits of binary options, it is likely that many will be converts to this way of trading.
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