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Archives for May 2019

Day Trading: 3 Tips on Deciding When to Sell

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Deciding when to sell is a key element to being profitable when Day Trading.

There are many ways for you to approach an exit and come out in a winning position. Four ways to do this is to use profit targets, daily pivots and momentum.

The most commonly used exit method is probably using profit targets. When using profit targets, you are exiting at a pre-set level.

There are strategies to help when choosing profit targets. Of these strategies, Scalping is the most used. When scalping you are selling right after the trade becomes profitable. The Profit target when scalping is whenever the trade begins to make you money.

Another strategy using profit targets is Fading. Fading is involving shorting stocks right after they begin to take an upward turn.

When using this technique, you are assuming three things. First you assume the assets overbought. You also must assume that those who bought early are ready to take their profits. Last, assume that those who are currently buying may be scared off the trade.

Fading is a risky strategy but can really pay off when successful. What you are watching for when implementing this selling strategy, is signs that the buyers are stepping back in. This will give you your price target.

Daily Pivots is our next usefully strategy when deciding when to sell. Daily pivots is benefiting from the asset’s volatility.

Profiting from Volatility is achieved by buying when the price is the lowest and selling when the price is at it’s highest point. You’re price target when using daily pivots is when you see a reversal begin.

Using Momentum of a trade can be very beneficial for traders. This involves research. Knowing which trades will be trending and popular puts traders ahead. Reading news articles and staying up to day on current events will help you know which way the market is moving and allow you to strategize successful trades.

One way to trade using Momentum is to buy based on news releases and then sell when the trend turns. There is also another popular way to trade using momentum. This is to fade a price surge. When fading a price surge your price target is when the volume of the asset begins to lower.

Defining a strategy when deciding when to sell is important. Your strategy should be repeatable and tested. This will lead to success when Day Trading.

Day Trading: How To Minimize Risk

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The risk of Day Trading is not breaking news. One of the best ways to minimize Day Trading Risk is to use stop-loss orders. For long positions, you can use a stop loss order to make sure your loss on certain stocks is not greater than a set number.

Let’s look at an example:

You have 20 shares at 20$ a piece and you are only willing to lose 2$ per share. This means you will place a stop loss at 18$. This way, if your stock plummets to 5$ a share you are not risking a loss of 15$ per share.

A good strategy to limit Losses when day trading is to set a physical stop-loss order, but to also set a mental stop-loss. The physical stop loss is going to physically limit how much you can lose. Your mental stop-loss will put you in a spot where you can immediately exit your position if you trade makes a turn.
 We also recommend setting an amount that you are willing to risk each day. This will minimize your risk for big losses in a single days time. Setting this limit for yourself will help you trade with a clear mind.

If you feel your chosen strategy lines up with your risk limit, then you should begin trying it out. Trying your strategy with paper trade is a great way to feel more confident. Analyze your paper trades and make notes on where you feel your were profitable and where your expectations were either met or not quite met.

The next step will be using a demo trade account that using real market information. Give yourself some time to work with movement in these demo accounts before moving on.

Make sure while practicing, that you are doing your homework. Look at historical charts, making note on where your stop loss would be hit or where your target would be hit. If after research and trial runs you feel your account has been profitable, then it is time to move forward.

If you find you have lost capitol, then change your strategy and try again. Do not start a new strategy on a real account. Be patient and do it right. This will minimize your losses.

Day Trading Futures: Pros and Cons

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The Pros

Day Trading is great because all trades are completed when the market closes for the day.

Futures usually open at a price that is very different from where they end. Volatility means you can fall asleep at night in a winning position, and wake up at a loss. Day Trading provides rest from this risk. Literal rest. A good nights sleep.

There is no overnight risk with Day Trading, which is one of it’s biggest Pros.

There is a lot to learn when entering the trading world.

Day Trading is like an accelerated learning course in trading. You’ll make more trades in a day than position traders. This will help you learn quickly what is necessary for success. You’ll

The Cons

It takes great discipline to day trade. It can be vey difficult to stay the course and not over reach. Many who try out day trading find themselves overreaching and over trading.

Commissions can also be an issue when Day Trading. It is very possible to break even, but have a big commission bill at the end of the year. To make money day trading you have to make many winning trades.

A Word On Volatility

Short term trading can outweigh long term investing in certain situations. Volatility of the market will determine which approach is most favorable.

In a highly volatile market, prices are moving up and down frantically. This is what you want to look for. The high volatility allows you to buy and sell for profit within a days time. A stagnant market is a no go for day traders.

Day Trading takes a lot of preparation, education and discipline. It can me really difficult to make money Day Trading. It is crucial that you treat it seriously and dedicate proper time.

However, if you do your research and map out a game plan, Day Trading can be a very rewarding.

10 Tips for Day Trading Success: Part 2

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Welcome to DayTradeFeed.com’s 10 Tips for Day Trading Success: Part 2. Make sure you don’t miss out on the tips we discussed In 10 Tips for Day Trading Success: Part 1

Tip #6 Timing is Everything

The majority of orders are made in the market’s first thing in the morning.  This helps contribute to the market’s volatility which Day Traders thrive off of. With practice you may be able to see the market patters and pick the best times to make trades, but for beginners its better to wait a 20 minutes or so before making your first move.
During the middle of the day, the market is more stable, but towards the end of the day there is another volatile period before markets close. The volatility of early morning and late afternoon markets are tempting as they provide more opportunity, but we caution beginners to avoid them until more knowledgeable.

7. Use Limit Orders

Figure out your enter and exit strategies. You may use Market Orders which are fast and reliable, or Limit Orders that will give you more control over the execution price. I
If you choose to use a market order there will be no price guarantee as it is executed at the best price available at the time. Going the route of limit orders, however, will give a guarantee on the price but not necessarily the execution meaning the trade may not go through at all.

8. Patience is a Virtue

Whatever strategies you use, make sure you are patient and consistent. Your strategies may not work every single time but the average will lead to day trading success. It is not uncommon for professional Day Traders to win only 50% or 60% of their trades. Be sure that you are limiting your risk, and your methods very well outlined.

9. Keep your Cool

There will absolutely be times when the stock markets get at your nerves. To see success when day trading you have to trade without emotions. Don’t let things like hope, fear and greed influence your decisions. You will be most profitable in you make moves based on logic.

10. Keep on Keepin on

It is important to move fast if you want to be a Successful day trader. Moving fast, however, does not have to be stressful. You’ve now read the first 9 tips, and you understand what its going to take to be profitable. Get your strategy locked in. Practice patience and discipline. If you do these things, there will be no need for stress and anxiety.
Don’t forget he Day Trader’s mantra: “Plan your trade and trade your plan.”