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One of the fast growing trends in the stock trading arena these days is day trading. Today, more and more people are getting into this drift due to the many promises of making fast and easy money on their minds. However, what a lot of people fail to realize is that the buy fast and sell fast strategy of day trading may not always turn out as a very wise tactic to adopt in the stocks game.

Day trading can be a bit of a gamble and traders remain divided on the issue on whether or not this serves much purpose to the stock exchange industry.

Still, what most people could agree on is the fact that day trading is certainly not for everyone, and that it can involve huge risks. And so, before you immerse yourself in day trading, be sure that you get your facts straightened out.

What Is Day Trading?

Day trading is the buying and selling of securities for a certain stock within a single day. The main goal of those who practice this type of trade is basically to be able to profit from the difference between prices for buying and selling.

This type of trading serves two very critical functions in the industry. First, it keeps the markets efficiently running because of arbitrage as stock exchange basically thrives on buy and sell activities. Another function for this is that it usually provides so much liquidity in the stock market.

What Makes Day Trading Risky?

Although day trading may sound quite appealing at first, be warned that up to this day, the profit potential of this type of trading is still under debate among investors and brokers. And if you are new to the trading game, it is not advisable for you to gamble your investment as you may end up losing substantial amounts of money.

Although day trading is not necessarily illegal nor is it unethical, most would agree that it is risky because principles of this trade are based on the “fast and easy money” mentality, and therefore, day traders rely on making profit by rapidly buying and selling stocks in a single day as their stocks continue to rise and fall in value.

Of course, the chances relied upon are not quite dependable and choosing to do business this way seems more of a gamble than a sure way to gain money. Most financial advisors may discourage people from entering this type of trading, with the argument that most of the time, rewards do not justify the risks involved.

Apart from this, many parties capitalize on much of the confusion behind the controversies on day trading and create multiple Internet scams. And since most investors in these type of trades do not actually have a lot of money and may use borrowed money to buy stocks, this can be very dangerous.

The bottom line is, most financial experts would argue that most successful companies have grown not because of day trading, but through more traditional means.

If you were currently not very familiar with the stock market game, then it would be wise for you to stay away from day trading. Take in mind that the best way to earn profit may be through the long process and hard work, and taking shortcuts may certainly involve much more risks than you may want to bargain with.

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Rich Dad, Poor Dad is written by Robert Kiyosaki and Sharon Lechter. It advocates financial independence through investing, real estate, owning businesses, and the use of finance protection tactics. According to Kiyosaki and Lechter, wealth is measured as the number of days the income from your assets will sustain you. Financial independence is achieved when your monthly income from assets exceeds your monthly expenses.

The book is the story of a person who has two fathers: the first was his biological father (the poor dad) and the other was the father of his childhood best friend, Mike (the rich dad). Both fathers taught the author how to achieve success but with very different approaches.

The educated poor dad but lacks financial literacy, because he does not acquire any valuable lessons about money, simply because it is never taught in school. Poor dad encourage their sons to do well in school so they could get a good job with a good company. Poor dad believed in working hard, and saving money. His poor dad worked hard but somehow never made it ahead financially.

While his little educated rich dad, deliberately takes advantage of the power of corporations and their personal knowledge of tax and accounting. Rich dad give him great lesson by paying him very low wages deliberately so that would stir anger and a sense of injustice and eventually for him to realize that in order to get ahead, one must work for himself and not for others.

Here are the major lessons from the book:

• The important thing to get rich is by having a strong purpose for living, a determination to be a successful person. You need to have the rich mentality. Instead of dwelling with the fact that you are not rich, ask your self “how can I make more money” because this will stimulates the brain to take action.
• In order to get rich, one must work for himself and not for others.
• Understands what assets and liabilities are. The rich build up the asset column and the poor build up the liability column (expenses). Make sure you have assets that gives you income, like real assets, stocks, bonds, mutual funds, income-producing real estate, notes, royalties from intellectual property, etc.
• Opportunities in life come and go; the rich recognize them instantly and turn them into gold bullions. Others do not see these opportunities.
• Corporations spend first, then pay taxes on anything that’s left, while individuals must pay taxes first. Individuals may not be aware that they work from January to mid-May to enrich the government by paying taxes on their income. In the meantime, the rich are hardly taxed.
• People should hire other people who are more intelligent than they because by capitalizing on the knowledge of others, an intelligent individual builds his own knowledge base and therefore has more power over those who don’t know.
• Direct marketing, and management skills (manage cash flow, systems) are important.
• Make friends with successful people and people who enjoy talking about money because they may have valuable lessons to share.Learn more from this amazing book:

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