|Let's say a particular trade results in a 10 percent return. If you have $50,000 in your account, then your return will be $5,000. But if you borrow another $50,000 and add it to your account, then your return doubles - you make $10,000. Leverage enables you to increase the dollars returned to you without increasing the performance of the trade.
Where do day traders find this money? They generally borrow it from their brokerage firms, using a special account known as a margin account. The margin account is different from a trader's cash account and requires an initial investment of at least $2,000. Once the margin account is opened, a trader can borrow up to 50 percent of the purchase price of a stock. This is also known as buying on margin.
Both leverage and selling short carry certain risks, and both can result in a day trader losing his assets and being asked to pay back those he borrowed. One of the biggest dangers is the margin call. A margin call may be issued when the value of a trader's margin account falls below a preset limit known as the maintenance margin. To satisfy the margin call, a trader must deposit more money into his account. If he can't do that, the broker will start selling the trader's securities until the maintenance margin is once again attained. Under most margin agreements, a firm can sell a trader's securities without waiting for him to meet the margin call. He may not even be able to control which securities are sold.
To reduce the risks associated with trading on margin, day traders use stop-losses. A stop loss order is an order to sell a security at the market price as soon as it hits a predetermined level. The advantage of a stop order is that a trader doesn't have to obsess over a stock's performance, knowing he has a measure of protection. The disadvantage is that the stop price could be triggered by a short-term fluctuation in a stock's price. Still, a stop order is an important tool for day traders, as is a "mental" stop-loss: a maximum amount that a trader is willing to lose in a day.
Make money with MySpace
Do you have a MySpace Account? Enjoy hanging out on MySpace or Facebook? You can also earn money from this! Get Free Followers provides you nice and easy way to cash in on your MySpace Account.
FREE service to make updating your social networks a snap!
MySpace and Facebook are both powerful marketing tools that aren't exploited at their full potential. Even they have hundreds of millions users, only a very small part of these users know they can earn thousands of dollars using MySpace or Facebook.
There are 2 ways you can make money with MySpace in Get Free Followers :
- Add MySpace Connections to your account.
You add your account for others to connect it in Get Free Followers and increase the MySpace Connections. This will boost traffic to your pages that you hve posted on your MySpace stream. You only have to host some advertisement in your pages now, which will convert that MySpace traffic to a sizeable revenue.
- Earn Coins sending MySpace Connections request to other users!
Even if you don't have others to connect you and see your stream, you can still make some bucks daily by just sending other MySpace users Connection requests - with the help of Get Free Followers tool.
Very simple! When you connect other users' accounts in Get Free Followers, you get some coins. Then you can convert these coins to REAL money from the Coins to Cash section and withdraw that whenever you want - minimum amount required for withdraw is only $1!
Above 2 sections will take you through a detailed how-to article to explain how you can make money with MySpace. Sure, it's easy to get frustrated by the overblown bells and whistles that go along with a typical MySpace visit, but there are many reasons why it's still a useful tool for musicians looking for gigs, fans, and exposure.
Fans are taken right to the music - Pretty much everyone looking for music on the web knows this, so MySpace is one of the first stops when looking for a particular song. It's a no-frills way to hear the latest single from a band.
Standardized site for clubs/press to link to - Regardless of how fancy and flashy your official website might be, Myspace makes it relatively easy to access all your basics. Many clubs and press outlets still prefer to post links to MySpace over the band's official site.
It's an actual web presence - Sure, Facebook is a bit cleaner and has more buzz in the social media world, but MySpace does not require users to sign up in order to access the content. This makes for a quick and easy web presence that anyone can check out.