Professionals and curious individuals are trying their luck in the stock market by embracing day trading. Are you interested in joining the bandwagon? If so, read on.
The stock market is not a platform for the faint hearted and if you are having a second thought, it is understandable. If you are not a professional, then you stand to risk more than professionals. It is estimated that 10% of day traders succeed in the business, meaning that 90% of traders end up losing money.
Don’t run away just yet. Succeeding in day trading is not easy, but it is most definitely possible. Investors are out here making money using some day trading strategies.
Day Trading Strategies
Reaping profits from the stock market is possible even if you’re not a professional trader. Take note of some of the famous strategies and you might earn some good cash from day trading. Here are 9 clever day trading strategies investors are using to make it in the stock market.
This is the most popular day trading strategies and you should definitely pay close attention to it. The strategy focuses on capitalizing on prices changes every minute.
Day traders, who love this strategy, do not care about quality but instead focus on the quantity. They buy stocks and sell them immediately they become profitable.
The scalping strategy is exciting and a fast way of trading, but it has its own risks. You require a high trading prospect to ensure the control of risks.
Be a very good timer, and watch out for unstable instruments. Do not wait for market calls, close trades as fast as you can.
2. Momentum Trading
This strategy is popular among beginners. It is designed for day traders who do not rely on fundamental examination, but rather on technical examination.
The fundamental way of analyzing a stock entails using a certain company’s metrics to identify opportunities for buying. For example, you can look at the company’s earnings, debts, and revenue.
On the other hand, the technical way entails considering recent price fluctuations of a particular stock then using the information to identify the signals for when best to buy and when best to sell. The signals are things such as patterns, trends, and other metrics based on the trading history of the stock over the recent past.
Day traders who use the momentum trading strategy purchase stocks when they notice a pattern of highs and lows. They buy stocks that are already moving, instead of focusing on buying a stock at exact low points then selling the stock at an exact high point. They are focused on the moving stock, and on buying it, then getting out before it gets to an inflection position.
3. Breakout Strategy
The breakout strategy focuses on when the price passes a particular mark in your books. Day traders use the breakout strategy to purchase stock with a view of selling them at a higher price when the price breaks.
Whenever a certain stock trades beyond the price barrier that was initially specialized, instability often goes up and the prices will many times drift in the same direction as the breakout. Just keep in mind that the more the prices get to these points, the more authenticated and significant they become.
4. Reversal Strategy
Reverse trading has raised debate over the years, but it remains popular around the world. Many believe that this strategy is risky for beginners, and advise them to keep away from it.
Reversal trading, also known as trend trading, defies logic because traders focus on trading against the trend. Crazy, right? Yes! But not entirely.
If you can accurately identify pullbacks, and predict strength, you can effectively pull this one off. Know the market well enough and gain some experience.
5. Swing Trading
Swing strategy involves watching out for short-term stock price patterns and then trading according to the assumption that the noted patterns will keep recurring in the near future.
For instance, as a swing trader, you may have noticed an asset that has peaked over the last two weeks and assumed that the stock will keep up with the trend near that level. When you identify that, the levels can show you when to sell the asset, or when to short-sell it.
6. Market-Neutral Trading
This is also known as defensive trading because a trader tries to hedge a trade. Day traders who use this strategy take a long position and a short one in two stocks that are related. The goal of the strategy is to capitalize on both stock performances while avoiding risks related to market weakness.
7. Pivot Points
The day trading pivot point strategy is great for recognizing and acting on serious support or opposition levels. You can use this strategy to identify your point of entry and the break out traders can use pivot points to calculate a breakout.
8. Thinking Differently
Trading is not difficult, but you definitely must be able to think differently if you want to make it. All the above strategies might sound like a foreign language to you, and it may take your time to get a hang of them, but this one is a straightforward strategy that can work for any day trader.
Do not take any information at face value, but instead validate the statements and the products to find out if indeed there is a legit trading chance for you there.
9. Continuous Learning
When you were in school, you were told that learning never ends. That statement is entirely true. Develop your trading skills daily. Learn various techniques and become consistent in your quest for learning. The results will not disappoint you. Remain patient and disciplined, and remember it is a journey.
Use sites such as Market Beat, which bring you the latest stock news. The site provides high-quality stock research tools for you. With Market Beat, you are guaranteed of complete, comprehensive and accurate information.
Market Beat attracts millions of visitors daily. What are you waiting for? Head over to their site, subscribe to their newsletter and gain the information you need.
Trader, You Are Ready to Go with These Day Trading Strategies
Choose what works best for you and try it. You will never know if you shy away and let the horror trading stories scare you. These day trading strategies are working for others and they can work for you too. All the best.
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