If you are hoping to make money from day trading then it would be a good idea to adopt various strategies that will work for you.? The following are a few day trading strategies that might help you to make a profit on the stock market.
Swing Trading.? Swing trading is based on the theory that what goes up must come down.? This is known as Newton?s Law and the opposite is also true in that what comes down must go back up.? So the basis of swing trading is timing.? With swing trading, you have to find the point where the stock starts to rise so you can purchase it and then you can sell it again once you have identified the point where it is starting to fall again.
Riding the Curve.? Another name for riding the curve is trend following and this is a basic strategy when it comes to day trading.? What you are doing is riding the curve so when a stock is rising, you are going to buy it because you are assuming that it is going to continue rising.? When stock is moving in a downward direction, you will want to cut your losses and sell because you are assuming that it is going to keep on dropping in value.? Some experienced investors consider this to be a bad idea.
Trading a Range.? When trading a range, you are assuming that there is a limit to how high or low a stock price will go.? The limits that are set are usually based on the recent change in price of the stock.? Once you have set these limits, you would buy the stock once it falls towards the bottom limit and then sell it once it reaches the top of the limit.
Event Trading.? Event trading is where someone will trade according to the news events.? An example of this is the large oil spill in the Gulf of Mexico in 2011 which led to the value of BP stock dropping.? Event traders try to predict the length of time that certain events will impact on the price of the stock and they would then trade accordingly.
Shorting a Stock.? You can use this strategy with almost any other strategy.? What this means is that traders can make money when the price of a stock declines by selling stock that they don?t even own.? This may sound very confusing but what it entails is the trader borrowing shares from a broker and then selling them.? This involves taking a gamble that the price of the shares will drop.? If the price does indeed fall, then the trader can buy back the stock at the lower price and then return it to the broker.? If this sounds risky to you, then that is because it is.? This type of strategy should only be used by those with a lot of experience of the stock market.
'); -->Source: http://stock-trading-investing.com/how-to-maximize-profits-with-day-trading-strategies/
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