STOCKS ✓ OPTIONS ✓ FOREX ✓ CFD's ✓ BINARIES ✓
Trading the financial markets is all about buying and selling stocks, options, currencies and other financial products. Typical markets are the NASDAQ (National Association of Securities Dealers Automated Quotations) and the NYSE (New York Stock Exchange). However, day trading only refers to differences being related to time. When positions are held for a short period of time, this is called day trading individual trade ideas. The holding period may last for a few seconds up to a few hours during the same trading day.
With the growth of electronic trading, day trading got some bad reputation. Too many people lost their money trading without any concept and without any clear trading strategy. But times have changed. By now online trading is one of the most common activities for traders. Everywhere Trade Ideas are available. Trading strategies may be found in the internet by using Google search and YouTube.
A good preparation is the key to success. Here are 3 important secrets for successful day trading.
It sounds simple because that’s how it is wherever something is associated with money. Supply and demand have a direct impact on the price. What is the secret here? Well, most of the traders don't realize this fact early enough. The price will go down when not enough buyers are available and the price will rise when everyone wants to buy. Have a look at historical examples.
By applying the price line and the volume to the chart, the traders can see that the strongest moves are surrounded by high volumes. Educators, like e.g. NOFT-Traders and Warrior Trading, teach their students how to interpret market profiles. The best entry points are to be found where supply and demand are deeply imbalanced.
When you buy stocks, the stop has to be below the entry price and the target price has to be above the entry price. Online stock brokers, like e.g. E-Trade, SureTrader and Scottrade, provide trading platforms with order management tools and apps for mobile trading. Once the orders are active, the trade will be closed in one way or in another. Investors who handle their money management correctly may even make money when the success rate is only 50%. The traders have to understand that the risk-reward ratio is really important. To have a RRR of 3:1 means that the distance from the entry is 3 times higher than the distance between the entry and the stop price.
Trading indicators are helpful for beginners to calculate the right position sizes faster. Ninjcators is the leading trading indicator provider for NinjaTrader. Last but not least, the traders should only day trade with money they can afford to lose and they should never risk too much money for one single trade. Otherwise the trading career will be over in a very short time. Money management is highly important, probably even the most important thing of all when it comes to day trading the markets.
Time does the work for investors. The shorter the time frame they work with is, the worse the ratio between income and fees will be. Everything needs time. It is recommended only to use trading tools you are familiar with, e.g. NinjaTrader, VectorVest or eSignal.
Looking out for the trade setups with the highest potential is also important. Sometimes there is only one trade within one day. Sometimes there are 10 different opportunities to enter the market. Every day is different. Traders have to be patient and to wait until it is time for the trade setup.
It is important to be disciplined and to trade only when the trading strategy criteria are met. The most money is lost in side-way markets. For a breakout trader it is important to wait until the breakout happens - up or down - and not to trade within the side-way trading range. “Plan the trade and trade the plan” is an old saying and this is absolutely true.
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