By www.ProfitableTradingTips.com
Profitable Day Trading Strategies
There are a number of profitable day trading strategies. The day trader typically chooses on the basis of opportunity as well as his own experience and skill set. No matter which one of the profitable day trading strategies a trader follows, technical analysis of equities is the backbone on trading success. With this caveat in mind let us look at a number of profitable day trading strategies.
Trend Following in Day Trading
Trends occur during the trading day just as they do over day, weeks, and months. Traders follow the price of a given equity with a sense of what the fundamentals dictate and where market sentiment is taking a stock. The smart trader jumps in to buy and sell when his analysis indicates that the equity price is about to turn. This can be one of the most profitable day trading strategies in competent hands. An interesting sidelight is the relationship between trading volume and Google trends. It turns out that many investors tip their hand so to speak by researching their stocks on the search engine. Traders can often successfully anticipate which stocks to follow by checking Google trends.
Responding to the News in Day Trading
One means of how to profit from online stock trading is to simply be present at the trade station during the trading day. The business of trading the news is one of the most profitable day trading strategies and probably the most profitable when professionally combined with other strategies in a trader’s skillset. Investors typically believe that the values of equities are set by the fundamentals. However, in reality, equity value is set by the perception of the future value of fundamentals. When a new item hits it may drastically change the market’s view of the fundamentals of a stock, commodity future, or Forex pair. There is often a whipsaw effect in which the equity price overreacts to the news and then over corrects before settling into a market consensus for the day. Being at your trade station when the news arrives can be one of the most profitable day trading strategies.
Rebate Trading in Day Trading
Rebate trading is sort of like being at the California gold rush and selling picks and shovels instead of climbing up and down the Sierras looking for a vein of gold. Customers of the electronic communications networks, ECN’s, used for much of day trading charge commissions to traders who expect to have their orders filled at the most advantageous price. This is how ECN’s make their money. Rebate trading takes advantage of the fact that many ECN’s pay market makers who place limit orders. Traders who engage in limit trading commonly stick to stocks that trade in high volume. They set their limits in small increments. And, they engage in astute technical analysis in order to correctly anticipate the direction of the equity they are trading.
