In day trading
What is day trading? These are near-term deals on the stock market. The strategy uses deals created within one day without transferring deals to the next day. It is most sensitive to all changes. The emergence of any significant data, statistics or other information can be used immediately. It allows you to save time and make a profit as soon as possible The timing of transactions and cash equivalent assets can be called the main feature.
Schemes orhow to day trade
The main thing of intraday bidding is to close all positions by the end of the day. There are 2 main intraday bidding strategies.
1. Scalping is the easiest, but effective method. It consists in setting a certain threshold for closing a position.
When scalping, it is essential to select the correct moment to enter the market. This is usually done with steady progress of the trend. In this case, the position quickly reaches the required level of profit and closes, or the trader puts a Stop Loss and monitors the further progress of the trend, moving Stop Loss if necessary. As soon as the trend changes direction, the position is closed.
Every day-trader should choose the most volatile assets or assets with bright trends.
2. Bidding on the news: a trader must closely monitor all monetary and economic news that may cause the promotion of the trend, especially positive. A calendar of significant events in the stock market and a table of the impact of these events on exchange rates are good helpers here.
There are other schemes, but they are less efficient and only suitable for experienced traders.
Rules in day bidding
It is advisable to adhere to the following rules:
* Bid a maximum of 2 hours per day.
* Intraday bidding must be at the same time.
* Limit yourself in the number of trades per day.
* Set achievable goals.
* Complete the trade in any unclear situation.
* Finish bidding after several failed deals in a row.
* Set a loss limit for a specific time period.
Pros and cons of day bidding
The disadvantages are as follows:
- The more transactions you need to make per day, the more powers goes to work. And you can get a decent profit only with a large number of transactions.
- Day bidding requires constant concentration, the trader must “keep abreast of the market”, respond to the slightest changes, and there is not much time to analyze the situation.
- A large number of deals often results in high commission expenses.
For people, who are able to work in a dynamic and intense mode, tactics offer a number of advantages:
- Risk control
- Lack of “gaps” (a significant gap in the schedule between prices)
- The undoubted pros of short-term transactions can be called the fact that the profit in them appears much more often.
- Intraday bidding allows you to quickly see the results of your actions.
- Short-term trades are usually associated with smaller sums, consequently, in case of failure,your losses will not be so great.
Success here depends entirely on the trader`s features.