Day Trading Strategies

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Pitfalls of Technical Analysis when Day Trading

A lot of people make a lot of money selling services to day traders. They produce videos, organize seminars, and (ahem) write books to tell you how to be a success. But in the financial world, success [more…]

Research Techniques Used in Day Trading

Day traders need to make decisions fast, and they need to have a framework for doing so. That’s why they rely on research. But what kind? Most day traders rely heavily on [more…]

How to Use Fundamental Research in Day Trading

Day traders do very little fundamental research. Sure, they know that demand for ethanol affects corn prices, but they really want to know what the price will do right now relative to where the price was [more…]

Overview of Technical Analysis in Day Trading

A day trader who can recognize a trend on the charts can determine where prices are most likely to go until some unforeseen event comes along that creates a new trend. Technical analysis is the tool that [more…]

How to Interpret Trendlines when Day Trading

A technical analyst usually starts off by looking at a chart and drawing lines that show the overall direction of the price bars for the period in question. Rather than plot the graph on paper or print [more…]

How to Interpret Trendline Indicators Used in Day Trading

Day traders to more than draw trend lines, technical analysts use their calculators — or have their software make calculations — to come up with different [more…]

How to Spot Trend Changes when Day Trading

Although technical traders look to follow trends in the stock market, they also look for situations where the trend changes so that they can find new profit opportunities. In general, day traders are going [more…]

How to Recognize Pennants and Flags when Day Trading

Because stock markets tend to move in cycles, technical analysts and day traders look for patterns in the price charts that give them an indication of how long any particular trend may last. [more…]

How to Recognize Head and Shoulders Formation when Day Trading

Stock markets tend to move in cycles. So, day traders and technical analysts tend to look for patterns in the price charts that give them an indication of how long any particular trend may last. The [more…]

How to Recognize Cup and Handle Formation when Day Trading

Stock markets tend to move in cycles. So, day traders and technical analysts tend to look for patterns in the price charts that give them an indication of how long any particular trend may last. The [more…]

Understand the Stock Trend Cycles when Day Trading

Knowing the phases of a stock trend can help you better evaluate what’s happening and improve your chances of profiting from day trading. Stock price trends tend to move in cycles that can be seen on the [more…]

How to Recognize a Gap when Day Trading

Gaps are breaks in prices that show up all the time in stock trend line charts. They usually happen when some news event takes place between stock trading sessions that causes an adjustment in prices and [more…]

How to Use Fibonacci Numbers and the Elliott Wave when Day Trading

There are a number of schools of thought about how the stock market works. Each approaches the stock price trend charts differently and uses them to glean different information about how securities prices [more…]

How to Use the Gann System when Day Trading

The Gann system of stock trading was developed by William Gann who supposedly made $50 million in the stock and commodities markets in the first half of the 20th century by using a system that he may or [more…]

Leverage a Position while Day Trading in the Foreign Exchange Market

In the stock market, day traders can borrow up to three times the amount of cash and securities held in their accounts (although not all firms let you borrow the statutory maximum), and that amount is [more…]

The Human Psychology behind Day Trading

The stock and commodities markets are more efficient at matching supply and demand than almost any other market. Despite the efficiency underlying trading, the markets are also dominated by human emotion [more…]

How to Use Momentum to Day Trade

Momentum is the rate at which a stock or commodity price is increasing (or decreasing) on the stock market. If momentum is strong and positive, then the security shows both higher highs and higher lows [more…]

How to Use the Tick and Trin in Day Trading

In an efficient market, all information about a stock, bond, or commodity is included in its price. Supply and demand are equalized through the trading process. The change in a security’s price gives you [more…]

How to Use the Force Index in Day Trading

The volume of stock (or other securities) traded on the market combined with the force index can provide a day trader with a sense of how long a trend will last. [more…]

How to Use On-balance Volume in Day Trading

On-balance volume is a running total of the amount of market trading in a stock or commodity. To calculate the on-balance volume as a day trader, first look at today’s closing price relative to yesterday’s [more…]

How to Use Open Interest as an Indicator of Demand while Day Trading

Open interest has a different meaning in the stock market than in the options and futures markets, but in both cases, it gives traders useful information about demand: [more…]

How to Gauge Stock Volatility Using Average True Range

Most day traders prefer volatile securities, because that creates more opportunities to make a profit in a short time. The volatility of a stock, bond, or commodity is a measure of how much that security [more…]

How to Measure Volatility of a Security Using Beta

Not often used by day traders, beta comes from the Capital Assets Pricing Model, which is an equation used in academic circles to model the market performance of stocks, bonds, and commodities. [more…]

How to Use the VIX, VXN, and VXD to Gauge Market Volatility

Market volatility is the day trader's best friend, because it creates increased opportunities to profit from day trading. The volatility of a stock, bond, or commodity is a measure of how much that security [more…]

The Volatility Ratio Puts Market Volatility into Historical Perspective

The volatility ratio tells day traders what the implied volatility of a security is relative to the recent historical volatility. This ratio shows whether the security is expected to be more or less volatile [more…]

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