Learn and master day trading strategies & techniques to earn profit in up, down and sideways markets
A well-defined trading strategy is essential in day trading. Successful day traders use these simple tips to find stocks best suited to their trading strategies. The following day trading strategies explain how to reduce your risks and increase your chances of making money with day trading.
For more trading strategies please refer to part 1 of this article.
Day traders often find chart patterns to be a proven tool for finding entry and exit points for investments. Reliability is improved if the chart patterns are used in combination with technical indicators such as the commodity-channel index (CCI), the rate of change (ROC), the relative-strength index (RSI) and the moving average.
Experienced day traders may also use a variety of other technical indicators. This is a famous trading strategy.
As mentioned, technical indicators are vital tools for day traders. These indicators show interesting trends that can be used by a smart trader to realize a solid profit from following complex changes in the stock market.
Carefully watching momentum indicators such as the moving average, RSI, ROC, CCI and others over brief periods of furious activity holds the promise of improved profits for virtually any short-term investor.
Naturally, knowing exactly when to enter and when to exit from an investment opportunity is the biggest factor in day-trading profitability.
A competent day trader will study longer-term market trends to gain an understanding of what shorter-term changes may mean. Investment instruments typically exhibit demand and resistance zones.
Examining a strong demand zone for a particular investment usually will reveal a good entry point for taking a long position.
Likewise, examining a strong resistance zone usually will show a good entry point for taking a short position. Paying close attention to such details can significantly reduce the risks and increase the potential upsides for your investments.
Best time Entry
One of the most important trading strategies is the right time entry. The most efficient day trading entry tactic is sturdy support and getaway of strong resistance. The lowest risk entry point with the highest return opportunity is when the stock price hits strong support demand zone.
Your bank account can grow much larger if you use the right methods for your day trading. Keep in mind that your profits do not actually exist until you sell an investment to take the profits.
Unrealized profits from holding on to an investment can disappear at any moment. Strong-resistance, Fibonacci-number, 50MA or 200MA exit strategies all have been successfully used to sell investments in a timely fashion.
A Simple Conclusion
No matter what day trading strategies you adopt, consistency is the key.
Make a plan, and stick with it.
Even penny-stock trading falls under the same rules. Traders who keep their hearts still and their eyes open will always do better than wild traders who don’t think first. Stay calm and focused, and you will find your way to wealth.