Stock Day Trading – Top 5 Day Trading Techniques
In this article, I’ll share 5 of the top trading techniques you can choose from to start your stock day trading career.
Your first and most important step in day trading is selecting your trading technique. Choose a style that best suits your personality and stick to it until it works in the long term.
Here are the top 5 techniques:
Technique 1. Scalping. In this trading style you will focus to profit on narrow gaps created by the difference from bid and ask prices. Scalping trades often last seconds or minutes and is most suited for volatile markets. It requires a great deal of concentration from the scalper.
Technique 2. Trend Following. In this strategy the trader recognises a falling or rising price trend and speculates that this trend will continue. This is a more long term strategy which demands patience from the trader.
Technique 3. Swing Trading. This style targets gains in stocks normally within one to four days period. Using technical analysis the trader capitalizes on short term stock price changes. Swing traders normally follow a stock for a long time and identify patterns that can be exploited in the short term.
Technique 4. News Trading. The trader follows the news closely and identifies high volatility created by bad or good news. Fear and greed move market prices quickly and can provide great opportunity for day traders. Stock day trading on news can become very profitable.
Technique 5. Counter Trend Trading. The trader uses technical analysis to identify a trend that is about to reverse. For example the day trader can buy a stock that has been falling recently, expecting that the price will move up.
I believe this article will help you to choose from one of the most used trading techniques available. I recommend that you don’t change your technique at the first sign of trouble. Consistency is the key to successful stock day trading.