| The term 'day trading' is used to define the act of | | | | Daily Pivots is a strategy that allows profits from the |
| buying and then selling a stock in the same day. A | | | | volatility of the stock. This is accomplished by buying |
| day trader tries to make a profit by taking | | | | stocks during the low time of the day and when the |
| advantage of small price changes in the market | | | | high time of the day comes, the stocks are then |
| through leveraging a large amount of capital. There | | | | sold. When traders short stocks after they have had |
| are a few common day trading strategies, and these | | | | a rapid upward move, the process is called Fading. |
| have been listed below: | | | | This strategy uses the assumption that the stocks |
| There are certain stocks that are great for day | | | | have been over bought, and earlier buyers are |
| trading systems, and a trader may choose them | | | | already making profits from and selling they're stocks. |
| depending on their price and availability. A trader will | | | | In addition, they also try to scare out any existing or |
| look for two qualities when daily trading a stock and | | | | potential share buyers. This strategy is very risk, but |
| those are its volatility and its liquidity. The volatility of | | | | if all goes well it can generate a huge profit. |
| a stock is its estimated price range for that day; this | | | | The Momentum strategy utilizes strong trend moves |
| is the price range in which the trader will then | | | | or trading on news releases. The day trader will buy |
| operate. The more volatility a stock has the great | | | | when there has been news releases and then |
| the profit may be, and the greater the loss may be. | | | | continue on with they're trend until there are signs of |
| The Liquidity is what allows you to exit and enter the | | | | reversal. |
| stock at a quality price. | | | | Generally, daily trading requires the same tools that |
| One example day trader strategy favorite is Sun | | | | are used when trading normally. Buying shares is quite |
| Microsystems. The reason why many day traders | | | | the same as normal trading, but the exits are very |
| buy this stock is because it is very cheap to | | | | different. Most of the time, you will want to exit |
| purchase and very liquid and volatile. Other stocks like | | | | when interest of the stock has decreased. With day |
| this are very convenient for day traders. | | | | trading, investors are more vulnerable to quick price |
| One of the most popular trading strategies is called | | | | raises and drops, much more so than normal trading. |
| Scalping. This practice sells the stock immediate after | | | | Trading can be a very difficult thing to master, and |
| profit can be made from selling it. This type of | | | | there are many who try it and fail. But if you create |
| trading tends to move very fast, with the traders | | | | one or more good day trading strategies, with |
| watching the moment the stock becomes profitable | | | | practice and persistence you can stand to make a |
| so they can sell it. | | | | great amount of profit. |