Day Trading Defined
                       The professional day trader is a  person  who  tradesstocks in the office of a registered broker dealer. With  the  right  amountof training, experience and  communications,  some  of  these  traders  willeventually trade remote from their homes.                       Registered broker dealer  firms  provide  the  directaccess    communications    (T–1    lines)    and    electronic    executionequipment/software that puts these traders the same execution  access  levelas the Merrill Lynch’s and Goldman Sachs’s of the world. The  software  usedfor execution and monitoring the markets is often far  more   advanced  thanwhat I’ve seen or used on major brokerage firms trading desks.  Day  tradersthat work in this situation  can compete on  an  execution  basis  with  theNASD market makers and other electronic systems or ECN’s.                       Day trading by definition means  that  you  end  eachday flat, meaning you go home without any open positions at the end  of  thetrading session. Day trading is not taking home 500 shares of NEON at 44  onJuly 6, 1999 (see number 1 on chart) and watching it open on  July  7,  1999at 18 3/8 (see number 2 on chart). As you may recall, New Era  of  Networks,Inc. (NEON) announced a large earnings shortfall after the close on July  6,1999. I use NEON as an example of the problems you can face  by  not  endingeach day flat.
                                                                 NEON  DailyChart - 6/15/99 to 7/9/99[pic]
                       In the case of NEON, you would have lost most of,  ifnot all of your equity and would have received a margin call that you  wouldbe unable to have met. No, this doesn’t happen often  but  it  only  has  tooccur one time to possibly put you out of business. The media  then  runs  astory about the perils of day trading which they, in reality,  confuse  withon-line brokerage trading where the person just gambled  and  took  a  shot.That kind of trade is not what the day-to-day business of trading is about.