Day Trading For Dummies, 3rd Edition

Chapter 3

Deciding What to Trade and How to Trade It

In This Chapter

Finding good assets for day trading

Seeking securities to trade

Counting cash and currency

Making money from commodities

Deriving profits from derivatives

So what are you going to trade? Stocks, corn, or bitcoins? You have myriad choices, but you have to choose so that you can learn the market, know what changes to expect, and make your trades accordingly. And to avoid the devilment of the wash-sale rule, which can limit the tax deductibility of short-term losses (and which you can read about in Chapter 15), you probably want to make your universe of trading assets to be as broad as possible.

Still, you can't trade everything. A day has only so many hours, and your head can hold only so many ideas at any one time. Furthermore, some trading strategies lend themselves better to certain types of assets than others (see Chapter 8). By finding out more about all the various investment assets available to a day trader, ...