Day Trading Strategies That Will Make a Difference

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by: Dustin Hudson
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Word Count: 526
Date: Wed, 18 May 2011 Time: 5:10 AM

Day trading, also known as intraday trading refers to when an investor buys and sells stock on the same day. The trader basically monitors the stock market and tries to predict whether the prices will go down in the next few seconds, minutes or hours of the day. If they feel the prices will go up, they buy the stocks and later sell them at a higher price thus making a profit. Here are some of the strategies used in day trading.

One of the reasons day trading has gained so much popularity is due to the fact that you can get different brokers offering you the option to trade on margin. The same brokers will also offer very low fees. This simply means you can make a lot of profit without too many requirements. This type of trading has very high profit possibility and the results are seen within the shortest period.

Most of day trading strategies involve buying and selling of stocks within a short period for very low profits. However, holding the stocks for a longer period of time can yield better results. You are however advised to first understand the market better before you decide to go for this strategy as a wrong move can lead to huge losses.

Event trading is a day trading strategy very common to stock investors. This one involves making decisions based on current events in the stock market. For example if oil company X discovers a massive gas field, the share price is bound to rise. Event traders will then try and predict how high the prices are set to rise and then act accordingly. This day trading strategy can yield very good results and more people are taking advantage of it.

Another day trading strategy that seems to be working for many is the trend following strategy. An investor will buy rising stocks and sell those that are falling by assuming the current price trend will continue. If carried in the right way, this strategy can work wonders and yield very satisfactory results.

Swing trading is another popular day trading strategy currently being used by many investors. This one involves Newton’s law “what goes up must come down and what goes down must come up.” The day trading investor will simply time the market and spot the point where stocks will rise and buy them or sell them at the point where they start falling.

Trading a range can be quite tricky but if pulled off the right way, the results can be quite satisfying. Day trading investors using this strategy simply set a limit at which they assume the stocks are set to rise or fall. They will then buy the stocks at their lowest point and then sell them at a higher point making good profit.

These strategies are currently being used by professional stock trading investors but can also be used by beginners. One does, however, need to ensure they are well versed in all that is involved so as to ensure there are minimal losses.

About the Author

Shay Kachlo is the author of this article on Online Trading. Find more information about Options Trading here.

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