Showing posts with label Day trading. Show all posts
Showing posts with label Day trading. Show all posts

Tuesday, April 17, 2018

Active Trading Strategies to Follow in 2018

Active trading isn’t for everyone. Honestly, it is not even investing. Investing involves more than a few minutes or hours of holding a stock. 

But this does not mean that active trading doesn’t involve some form of analysis, it is just that the analyzing period is very short. That being said, active trading is an art of buying and selling securities based on short-term price fluctuations. 

For instance, if you are interested in buying shares from Compass Group, a British multinational company, you can check compass share price live and analyze its stock chart from 1 minute ago to 1 week ago and actively participate in its trading.

To accomplish an active trading strategy there are various strategies used, each with its own market environments and risks. Below are some of those strategies:

Day Trading

This is perhaps one of the most well-known trading styles. As its name implies, day trading is the method of buying and selling securities in the same day and positions aren’t held overnight. 

Although traditionally day trading is done by professional traders, electronic trading has opened up this practice to noob traders as well. Though day trading may seem like gambling, trading is an investment in trends. 

Day traders observe trends, monitor movements and know when they should buy or sell a position. Although this isn’t an unusual method, their reaction to a movement occurs in minutes or hours rather than in days or months.

Trend Trading 

This is sometimes considered as being a buy-and-hold strategy and not active trading. However, when done by an advanced trader, it can be a form of active trading. This strategy uses longer term charts, from daily to monthly, along with other methods to determine the trend of the current market direction. 

Trend traders look for successive higher highs and lower lows to determine the trend. By riding this wave, they aim to benefit from both up and downside of the market.


Probably one of the quickest methods in the list, it includes using various price gaps caused by bid-ask spreads and order flows. This strategy works by buying at the bid price and selling at the ask price to receive the difference between the two price points. 

Additionally, they do not try to exploit large moves or trade high volumes; rather they take advantage of the small moves that occur frequently.

Swing Trading 

At the end of a trend, there is usually some price volatility as the new trend tries to establish itself. Swing trading involves buying or selling securities as the price volatility transpires. 

Although they are usually held for more than a day, they do not cross the trend traders’ timeline. Swing traders create a set of trading rules based on technical analysis. These rules are designed specifically to identify when to buy and sell a security. 

Although this software does not have to predict the exact peak or a price move, it does need a market that moves in one direction or the other.

The bottom line is that an active trader can employ any or all of the mentioned strategies. Nonetheless, before engaging in such strategies, the risk and costs associated with each needs to be explored and understood.

Monday, October 9, 2017

How To Trade With Ameritrade

A trading platform is software that day traders and other investors use to trade stocks and securities. Traders can use it to open market positions in a particular security and manage that market position as the price goes up or down. 

There are tons of competing software platforms out there, with Ameritrade being one of the better ones out on the World Wide Web.

Ameritrade is very popular with institutional investors, but it is not quite as fast or customizable as the typical day trader might like. 

Lots of platforms out on the market include market analysis tools and research capabilities, but sometimes the quality of those tools are irrelevant to day traders if the trades are not executed fast enough.

Ameritrade’s Thinkorswim Platform

Ameritrade’s Thinkorswim platform does offer quality market analysis features that allow traders to try to anticipate what is happening and what a trade might do. 

Those features are useful for risk modeling and learning as much as you can about a potential trade. And the Thinkorswim platform has made strides recently in order to add more hotkeys and make trading quicker and easier for day traders. 

And Thinkorswim has made it simpler for traders to customize their platform and share that with other traders. Another Ameritrade feature is a day trading community that shares watch lists and tips for trading stocks.

Paper Trading Situations

No matter what platform you use when you are out in the real market, it makes sense for aspiring day traders to practice in paper trading situations. Paper trading is a way for learning traders to work in a simulated environment that allows them to trade virtual currency and not make a real mistake with real money. 

The benefits of getting screen time and understanding risk management when you are trading fake money are valuable.

Ameritrade’s Thinkorswim platform offers a similar feature that allows you to game out one trade at a time, with is very helpful for real-time risk analysis. 

But when day traders are fresh out of classes and just learning to implement strategies, the potential for mistakes is high. Which is why you want to test out your skills on paper trading software for at least a month at first.

Risk Management

Risk management is such an important part of being a day trader. You have to have a plan for each and every trade when you go into the day. 

There is no winging it. When you go into a trade without a plan or you abandon the plan the chances of the trade losing money are huge. And losing money is not the name of the game.

When you day trade, whether is on Ameritrade or on another platform, you are always searching for home runs, but ready and willing to eke out singles and doubles. 

Small wins, made consistently, are the way to get financially independent when you are day trading. Ameritrade can help you with the research and the risk analysis, but the trades are all up to you.

Sunday, April 23, 2017

How To Get The Most Out Of A Day Trading Chat Room

Day trading chat rooms are an underrated resource for traders in the early stage of their career. The chance to work with other traders, exchange ideas and listen to tips and war stories is invaluable to those starting out in the industry.

When you enter a day trading chat room, it may seem particularly overwhelming. The constant back-and-forth, the unfamiliar terms and the sheer number of people. 

Warrior Trading’s trading chat room has more than 4,000 members. That is a lot of hot stocks and candle reading to get used to right off the bat.

What you want to do is dip your toes in and get used to the sea of traders with caution at first, and when you get more comfortable, wade in more and more as you get the feel for the situation. 

Traders, especially those in Warrior’s trading chat room, are mainly solitary workers in home offices, so interaction with other is a fun part of their day. 

And the Warrior instructors know how to create an educational atmosphere that is fun and valuable for novice traders.

Interact With Other Traders

Ask questions. If you don’t understand how that bull flag trade went down, ask for more details. Then take what you have learned and research it until you know more. 

The more time you talk with other traders in the chat room, the quicker you will learn that everyone is looking for volatility. The big movers. And the right time to move on those hot stocks.

Learn the Lingo

The terms of day trading can be unfamiliar at first, but it helps to be able to learn these terms and jaw back and forth with your peers in the day trading chat room. 

For every unfamiliar term you see in the trading chat room, get online and research what it means. Ask questions of other traders. Everyone in the community is happy to help.

Be Respectful

Just like any other message board or day trading chat room, you need to be respectful of others. Don’t post hateful messages or go around boasting about your trading acumen. 

Humble is best. If you start talking about how much more money you are going to make than everyone else, you are going to get the cold shoulder. And shot down by the best traders. Always go in knowing that you have a lot to learn.

To learn more about Warrior Trading on Twitter, just search for their account on the social network.

Tuesday, April 21, 2015

5 Reasons to Become a Trader

English: A view from the Member's Gallery insi...
English: A view from the Member's Gallery inside the NYSE (Photo credit: Wikipedia)
Many scams and illegal schemes have created a negative perception of the stock trading business. 

The truth is that, in reality, this has very little to do with real stock trading and should not be taken into consideration when thinking about it as a career. 

This can be very lucrative and dynamic work for those who are well-informed and who have the knowledge and know-how to make use of this information. 

Therefore, if you are considering becoming a trader, here are five good reasons why it is worth considering and how to make the most out of a profession that can be truly life-changing.

Working Hours

One of the best perks about trading online is that you choose your own working hours. It’s easy to escape that 9 to 5 routine and do what you like whenever is most convenient. 

Moreover, if you know you will earn more money if you put in more time, you will gladly do so due to the direct incentive of satisfaction in terms of profit and good deals made. 

How To Become A Day Trader - Investopedia
During the heyday of the tech bubble in the late 1990s, day traders made easy money buying and selling Internet stocks.

Vacations and days off are all up to you. You earn as much as you put in, so a balance between these two can be easily made.

Only One Boss: You

For all those people who have problems with

others giving them orders, authority that is based only on the name tag and shots called for them, trading online is the right way to go. 

None of these things are something that you will have to deal with in the future. You will have one boss and one boss only and that is you. You will be the one that calls the shots and the one that makes it all possible. All the success and all the failures will be just yours, so prepare for the responsibility that comes with the freedom. 

This kind of accountability may not be for everyone and not everyone is cut out for it. But if you want to be someone who takes control and responsibility, this is the job for you.

Learning about the World

There much to learn about the world that people who are not engaged in this trade don’t know about. 

However, once you have become immersed in the world of stocks and trade, you’ll start to become familiar with an enormous amount of information about many countries worldwide and their economies. 

How to Become a Wall Street Trader | eHow 
Wall Street is often glamorized as a fast-paced, exciting place to be in the financial industry. Because of this, many people dream about becoming professional traders at the New York Stock Exchange (NYSE)....

You’ll get to learn about the climate and its influence on agriculture. You’ll learn about geopolitics and the local politics in some countries in order to predict the rise of fall of their economies or certain stocks that are related to them. 

In time, you’ll become aware of how much you’ve expanded your horizons without even realizing it.

The Amazing Variety

Another really interesting aspect about stock trading is the way it’s done. There is not just one way to trade and there is not just one type of stock. This is a business with many approaches and you are free to choose the one you like best. 

Moreover, you don’t have to stick to just one. You are free to combine all your knowledge and to combine stock trading approaches along the way. 

For example, while you may want to conduct extensive research and create a source of steady income through a fundamental approach, meaning you hold on to the stocks for prolonged periods of time, there may also be times when you want something more dynamic. 

One option for this is to take an amount of money you are not afraid to lose and invest it into the dynamic environment of penny stocks. The infographic on this site is great introduction to this exciting option.

Dynamic and Less Risky than People Believe

Parkett-Boerse in Ffm
Parkett-Boerse in Ffm (Photo credit: Wikipedia)
Some people say that there is less risk or at least the same amount of risk in starting a business as there is in trading stock. 

However, unlike in business, the upside of stock trading is that you can always change your mind, change your stocks, change the way you trade and do something completely different. 

This environment is anything but boring and is flexible enough that you can make what you want out of it. Risk is there, but the risk is manageable if you take proper precautions.
There are many more reasons for choosing the life of a trader. It takes courage, knowledge and education to become a stock broker, but in the end it is worth your while. 

All you are doing is investing in yourself and your own growth in every possible way: as a provider, as a person, and as a good businessman. It’s worth giving some serious thought to.

Tuesday, December 10, 2013

The Essential Guide to Trading on Margin

Fundamentally, trading on margin is investing in a given asset using a loan from your broker. There are a number of advantages and disadvantages to margin trading that make it potentially worth your time, and if you’re willing to take a risk with margin calls, this should be a method of investment that you should know about. 

Here’s an essential guide to trading on margin.

Fundamental Facts

You can’t trade on margin if you have a standard cash account with your broker. Instead, you’ll need a margin account where you will need a minimum investment amount of $2,000 – though some brokers will ask you for more. This amount acts as a deposit which then allows you to make trades.

Once you’ve made an investment and closed your position, you’ll need to pay back the deposit you loaned from your broker to make the investment in the first place, and then you’re free to take the rest of the money. Of course, if you fail to be profitable, you’ll still have to pay the deposit to your broker.

Advantages of Margin Trading

One of the greatest advantages of margin trading is that it allows you to make larger investments than you’d be able to use a cash account. 

This is because you’re making an investment using the loan which you’ve borrowed from the broker. This means you could potentially make investments 2, 3, or 4 times the amount of money you actually have as capital. 

If you’re trading currencies via the forex markets, you can use this to your advantage to make substantial profits, particularly if you use a margin calculator.

Disadvantages of Margin Trading

The best advantage of trading on margin is also its largest disadvantage because large margins can lead to great losses, as well as great profits. 

If you make a loss, a very small change in pips can lead to massive losses in your own money because the margin conversion is usually high – this is what allows you to turn a couple of thousand dollars into a couple of hundred thousand dollars. 

Therefore, when you’re considering trading on margin, you should be wary of all the disadvantages before you take the plunge – you could lose large as well as win big.

Ultimately, margin trading presents an exciting, though the risky strategy of investing, so look at all the options before you open a position.

Tuesday, October 22, 2013

Scalping: How The Smaller Profits Can Start To Add Up

Scalping is known as a type of trading that specializes in taking the profits on the smaller changes of price, typically right after a trade has been entered and is now profitable. This means that the CFD trader will need to have a strict strategy for exit since a single large loss will eliminate all of the smaller gains that were obtained through hard work. With the right resources and tools, like a live feed, the stamina and the right broker you will be successful in your strategy. 

Main Premises Of Scalping

There are three main premises of scalping that you need to keep in mind if you are planning on using this as your primary strategy of trading. These include: 

Less Exposure Will Limit Risk 

  • When you have a brief exposure into the market, you will diminish the chances of facing an adverse event. 
Smaller Moves Are Simpler To Get 
  • A larger amount of demand and supply is needed in order to get a larger change of price. It is much easier for the market to move 10 cents than it would be to move a whole $1. 
Smaller Moves Are More Frequent 
  • Even during the markets that are generally quiet, a smaller move is more likely to occur than a large move. Plus it's better for you to have smaller moves than larger moves in the first place. 

Primary Style Of Scalping 

A scalper will usually make a great amount of trades in a single day, anywhere from 5 to several hundred. They will usually use one minute charts; this is because the period of time is very small and they need to see the set ups as close to real time as they can. The instant and automatic execution of their orders is very important to scalpers, therefore a 24/7 broker is the best tool for them to use. 

Supplementary Style Of Scalping 

Those CFD traders that are within other frames of time have the option of using scalping as their supplementary approach in many different ways. The best way would be to use it when the market is locked in a range that is narrow or choppy. When there are no trends within the longer frames of time, moving to a frame of time that is shorter might show exploitable and visible trends, which might lead to scalping by the trader. 

The Bottom Line Of Scalping 

Scalping is a method that might product great profit for some CFD traders that choose to use it as their main strategy, or also for those that would like to use it as their supplementary strategy along with their other strategies. Making sure that you pay attention to the strict strategy of exiting is very important for making sure that your small profits are turning into large gains in the end. The frequent amount of small moves and making sure that you have brief exposure in the market are very important aspects that are the main reasons why this is such a popular strategy among many of the most successful CFD traders.

Author Bio
Alisa Martin is a master at scalp trading and has been working with stocks for 13 years. She prefers scalping with CFDs as her primary strategy for trading, due to how simple it is to use and how effective it can be if you use it right.

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