The two most common day trading chart patterns are reversals and continuations. Whilst the former indicates a trend will reverse once completed, the latter suggests the trend will continue to rise. Understanding these trading patterns, as well as ‘triangles’, ‘head and shoulders’, ‘cup and handle’, ‘wedges’ and plenty more, will all make you better informed when it comes to employing your trading strategies.

Commissions for direct-access brokers are calculated based on volume. The more shares traded, the cheaper the commission. The average commission per trade is roughly $5 per round trip (getting in and out of a position). While a retail broker might charge $7 or more per trade regardless of the trade size, a typical direct-access broker may charge anywhere from $0.01 to $0.0002 per share traded (from $10 down to $.20 per 1000 shares), or $0.25 per futures contract. A scalper can cover such costs with even a minimal gain.
Some of these approaches require short selling stocks; the trader borrows stock from his broker and sells the borrowed stock, hoping that the price will fall and he will be able to purchase the shares at a lower price, thus keeping the difference as their profit. There are several technical problems with short sales - the broker may not have shares to lend in a specific issue, the broker can call for the return of its shares at any time, and some restrictions are imposed in America by the U.S. Securities and Exchange Commission on short-selling (see uptick rule for details). Some of these restrictions (in particular the uptick rule) don't apply to trades of stocks that are actually shares of an exchange-traded fund (ETF).
If the strategy is within your risk limit, then testing begins. Manually go through historical charts to find your entries, noting whether your stop loss or target would have been hit. Paper trade in this way for at least 50 to 100 trades, noting whether the strategy was profitable and if it meets your expectations. If it does, proceed to trading the strategy in a demo account in real time. If it's profitable over the course of two months or more in a simulated environment, proceed with day trading the strategy with real capital. If the strategy isn't profitable, start over.
However we have a word of caution for them as intraday trading is not as simple as it sounds.Making profit in intraday trading on a daily basis is not that easy and requires lot of hard work and discipline.What are your views on this – “Whether a newbie in stock market should resort to intraday trading or not”.Drop in a comment to share your views.
Scalpers use technical analysis but within this style, can be either discretionary or system traders. Discretionary scalpers will make each trading decision in real time (albeit very quickly), whereas system scalpers follow a scalping system without making any individual trading decisions. Scalpers primarily use the market's prices to make their trading decisions, but some scalpers also use one or more technical indicators, such as moving averages, channel bands, and other chart patterns.
There is a lot of hype around day trading. Some websites promote it as a way to get rich quick (it isn't), and others say it is impossible (also not true). There are lots of day traders around the world who find success and make a living off the markets, so the truth lies somewhere in between those two extremes. If you've thought about day trading, it's worth your time to read through and understand the concepts discussed below, so you'll be better prepared for what to expect if you decide to proceed.
The most significant benefit of intraday trading is that positions are not affected by the possibility of negative overnight news that has the potential to impact the price of securities materially. Such news includes vital economic and earnings reports, as well as broker upgrades and downgrades that occur either before the market opens or after the market closes.
Day trading is traditionally defined as buying and selling stock, options, or commodities during the same trading day and be have your positions closed by the end of the trading session. In the past, day trading had been reserved for financial companies and professional investors. A large percentage of day traders work for investment firms or are specialists in fund management. With the advance of technology, day trading has continue to grow among the casual trader working from home.

Take breakouts from consolidations. Prior uptrends are a must. Sideways action that resists giving up much ground is preferred. High Relative Strength Ratings are a key statistic for limiting your universe to the best prospects. And volume gives you confirmation that institutions are accumulating shares. The twist added by swing trading is the timeframe.

Much research on historical data has proven that, in a market conducive to swing trading, liquid stocks tend to trade above and below a baseline value, which is portrayed on a chart with an EM). In his book, "Come Into My Trading Room: A Complete Guide to Trading" (2002), Dr. Alexander Elder uses his understanding of a stock's behavior above and below the baseline to describe the swing trader's strategy of "buying normalcy and selling mania" or "shorting normalcy and covering depression." Once the swing trader has used the EMA to identify the typical baseline on the stock chart, he or she goes long at the baseline when the stock is heading up and short at the baseline when the stock is on its way down.


This combination of factors has made day trading in stocks and stock derivatives (such as ETFs) possible. The low commission rates allow an individual or small firm to make a large number of trades during a single day. The liquidity and small spreads provided by ECNs allow an individual to make near-instantaneous trades and to get favorable pricing.
By the same token, volume characteristics of a breakout also can have a shortened time frame. Rather than the 50-day moving average of volume as your threshold for heavy turnover, look to the volume of the shorter consolidation area for clues. If the breakout volume can surpass the recent activity, that can be a sufficient confirmation of strength.
Price action trading relies on technical analysis but does not rely on conventional indicators. These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to gauge whether or not they should take a trade. This is seen as a "simplistic" and "minimalist" approach to trading but is not by any means easier than any other trading methodology. It requires a solid background in understanding how markets work and the core principles within a market, but the good thing about this type of methodology is it will work in virtually any market that exists (stocks, foreign exchange, futures, gold, oil, etc.).
Trading: Spotting the trend and momentum comes in handy for a scalper who can even enter and exit briefly to repeat a pattern. A novice needs to understand the market pulse, and once the scalper has identified that, trend trading and momentum trading can help achieve more profitable trades. Another strategy used by scalpers is countertrend. But beginners should avoid using this strategy and stick to trading with the trend.
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Swing traders can use a wide array of technical indicators. What makes swing trading unique is that it blends several components of day trading, with the speed of position trading. Swing trading indicators are primarily used to find trends that play out between 3 and 15 trading periods. After we analyze these periods, we will be able to determine whether instances of resistance or support have occurred.

Tactics used to take advantage of the uptrend can also be applied to trade the downtrend. Again, since it’s very difficult to predict exactly how long a bear rally, or “counter trend” may last, you should enter a bearish swing trade only after it seems that the stock has continued downwards. To do this, examine the bear rally very closely. If the stock heads lower than the counter trend’s previous day’s low, the swing trader could enter a bearish position.
Price volatility and average day range are critical to a day trader. A security must have sufficient price movement for a day trader to achieve a profit. Volume and liquidity are also crucial because entering and exiting trades quickly is vital to capturing small profits per trade. Securities with a small daily range or light daily volume would not be of interest to a day trader.

Risk management - Rather than looking for one big trade, the way a trend trader might, the scalper looks for hundreds of small profits throughout the day. In this process the scalper might also take hundreds of small losses during the same time period. For this reason a scalper must have very strict risk management never allowing a loss to accumulate.
A scalp trader can look to make money in a variety of ways. One method is to have a set profit target amount per trade. This profit target should be relative to the price of the security and can range between .%1 - .25%. Another method is to track stocks breaking out to new intra-day highs or lows and utilizing Level II to capture as much profit as possible. This method requires an enormous amount of concentration and flawless order execution. Lastly, some scalp traders will follow the news and trade upcoming or current events that can cause increased volatility in a stock.
Trading stocks intraday offers different opportunities than a traditional ‘buy and hold’ strategy. Speculating on stock prices via CFDs or spread betting for example, mean traders can profit from falling prices too. Margin or leverage also reduce the capital required to open a position. So you can take a position on the latest news release, product announcement or financial report – as well as technical indicators.
Tactics used to take advantage of the uptrend can also be applied to trade the downtrend. Again, since it’s very difficult to predict exactly how long a bear rally, or “counter trend” may last, you should enter a bearish swing trade only after it seems that the stock has continued downwards. To do this, examine the bear rally very closely. If the stock heads lower than the counter trend’s previous day’s low, the swing trader could enter a bearish position.

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Thanks for stopping in! We've had many requests for the best scalping trading strategy over the years. We decided to get on board and give you an easy scalping technique. We think this is the best scalping system you can find. The strategy is called The Triples S or (Simple Scalping Strategy). The Triple S is easy to learn. With practice, it will become a great addition to your scalping strategy. It could even be the best scalping method you have. This strategy is included in our best trading strategy series. We created this series to help traders become successful.
You need to understand basic day trading terminology & concepts to build your foundation. You can follow me on Youtube to get free education! Join the community of thousands of followers on YouTube and begin studying the free content we post on a daily basis. This is the beginning of your education. You need to study the markets, analyze charts, and learn the strategies professional traders are using every day.
Once again, you should only enter a swing trade after you have evaluated the potential risk and reward.As with bullish swing trades, the entry point would be compared to the stop out and profit target points to analyze the potential rewards and risks of the trade. On a bearish swing trade, the stop out point is the highest price of the recent counter trend. So if the stock rose higher than this price, you would exit the trade to minimize losses. The profit target is the lowest price of the recent downtrend. So if the stock reached this price or lower, you should consider exiting at least some of the position to lock in some gains.
Once you have a specific set of entry rules, scan through more charts to see if those conditions are generated each day (assuming you want to day trade every day) and more often than not produce a price move in the anticipated direction. If so, you have a potential entry point for a strategy. You'll then need to assess how to exit, or sell, those trades.
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