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Have you ever watched a newscast or financial channel such as CNBC? In know that's a silly question. Of course you have, right? And you've noticed that line of numbers running along the bottom of your screen. I am sure you have probably told yourself before that it's just stock market stuff and looked the other way. Some where out there, someone else is glued to that 'stock market stuff' because it can make them a bundle. Yes, fortunes can be made day trading the stock market, but they can also be lost of you don’t understand some basic concepts.

First off, the stock market trading is done in shares. Shares are the units actually offered by companies on the stock market, and the money that the company makes from these sales are called stocks. So you are not actually purchasing a companies stocks. What you actually buy on the stock market are shares, which is why you're referred to as a shareholder.

There are stock markets in countries all over the world, but one of the most well known is the NASDAQ market in the United States because it was the first all electronic market. The stock markets in the United States have the worldwide distinction of being the most active of all world markets. Because of the volume and reputation, the NASDAQ can exert quite an influence on other stocks. The DJIA, or Dow Jones Industrial Average is another big US based stock market.  Both are used extensively by day trading robots and other traders to make a living.

You're not expected to invest in the stock market on your own. There are always people who specialize in the stock market who can assist you. They are referred to as stock brokers and usually will have a great deal of experience in how the market actually works. Becoming a trader or a broker can mean a big amount of money, but it is not for everyone and is not the easiest job in the world by any means. This is because stock brokers are usually paid by means of a commission, so if your clients' investments make money on the stock market, so do you.

That's not to say that you should just leave all your stock market investments in the hands of someone else. If you’re serious about investing or day trading, you’ll want to learn to trade and invest on your own. This way you will start to get a good idea of what is happening. A great way to get started in the stock market is to find a reputable broker and some good research to start learning. There are many good stock research providers online who offer their services for free, and can give you advice on the stock market.

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Most traders looking for something to trade generally have 3 choices: stocks (both common and options), futures, or currencies. There are other instuments to trade also, such as bonds and a few other exotic things - most of these are out of reach of the average trader. The most well understood trading vehicle is stocks, and least is probably currency pairs. Most people have heard of futures and they are not too hard to understand given a bit of research and reading.

First off, futures inherently have leverage far beyond stocks. Most stocks you can get 2:1 leverage overnight and 4:1 intra-day for day trading. Futures are leveraged by default because of how they are constructed. This can be a double edged sword when it comes to risk and reward. Any trader can use futures to get a good rate of return with far less money than it would take with stocks, often just a few thousand dollars to start. Stocks this is not possible (unless you delve into the murky waters of penny stocks). This allows returns to be amplified UP and DOWN. It is not unreasonable to have $5000.00 balance in your account - a single trade can make or lose $300-$500 which is a 8-10% return OR loss!) on your principal in the account. If this type of risk and volatility makes you uncomfortable, then futures are not for you.

Second, futures by nature are actively traded and lead the market pushes and selloff's. This creates volatilty which in turn creates many opportunities to trade. With this type of behavior and volatility comes the forced ability to think quickly. Traders often only have a few seconds to decide to go in and place an order or they miss the move. It is also a good trait to develop the ability to anticipate an direction and have orders in ahead of time. Again, this requires skill and fast thinking. If this is not your strong suit, or you are very analytical, futures day trading or swing trading is probably not for you.

Lastly, you must be able to assess risk and stop levels quickly, almost second nature. You cannot enter a position and then think about where your stop should be and where your target should go. You should already know this before entering the trade. Since futures are leveraged a lot, you should always assess the stop first (read risk level) and determine the odds of that stop getting hit in the next 10-15 minutes BEFORE actually placing a trade. Why 10 or 15 minutes only?? Most trades people do in the futures market on average only last this long, unless they are swing plays. Most traders choose not to take futures overnight because of the gap risk and the additional overnight margin required to do so. Traders close out positions at the close of each day.

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