Day trading and swing trading penny stocks and forex simplified.
What is Day Trading? Swing trading? Penny stocks?
It is perfect for the short term intra-day trader, who would like to hold on to the position for a few minutes to a few hour with a view of square their position before the end of the day.
Swing trading involves taking a position in the markets with a view of squaring that position before the end of that day.
- A day trader typically trades several times a day looking for fractions of a point to a few points per trade , but who close out all their positions by day’s end.
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The goal of swing trading is to capitalize on the price movement within one trading day. penny stocks are a useful vehicle to accomplish this.
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Unlike investors, a day trader may hold positions for only a few seconds or minutes, and never overnight.
What swing Trading really means ?
The term “ swing trading “ is a widely misused and misunderstood term. Real day trading means not holding on to your stock positions beyond the current trading day; in other words, not holding any position overnight, this is really the safest way to day trade, because you are not exposed to the potential losses that could occur, when the stock market is closed due to news that could affect the prices of your stocks. Unfortunately , many people who claim to be “ day trading “ hold stocks overnight because of fear or greed, thus setting themselves up for the catastrophic of their capital. With the fluctuation of trading currencies, the term “ day trading “ changes slightly . Since currencies could be traded 24-hours-a-day, there is no such thing as “ overnight “ trading. Thus you could have open positions for longer than a day with active stop losses that could be activated at any time. Day trading could be subdivided into a number of styles, including:
Scalpers: This style of day trading
involves the rapid and repeated buying and selling of a large volume
of stocks within seconds or minutes. The objectives is to earn a
small profit share on each transaction while minimizing the risk .
Momentum Traders: This style of day trading involves identifying and trading stocks that are in a moving pattern during the day, in an attempt to buy such stocks at bottoms and sell at the tops.
Advantages of swing Trading
Zero Overnight Risk: Since positions are closed prior to the end of the trading day, new and events that effect next trading day’s opening prices do not effect your portfolio.
Increased Leverage: Swing traders have a greater leverage on their trading capital because of the low margin requirements as their traders that are closed in the same market day. This increased leverage could increase your profits if used wisely.
Profit in any Market Direction: Swing trading often will utilize short – selling trading to take advantage of declining stock prices. The ability to lock in profits even as market falls throughout the trading day is extremely useful during bear market conditions. (continued Below)
"James Connelly A.K.A “The Penny Stock Prophet” Was a Broke MIT Student before Discovering a Secret Strategy That Made Him A Millionaire By Investing In Small and Micro-Cap Stocks… Over A Period of 13 Months He Earned An Average Of 126% Gains On Every Trade, Turning His Initial Investment of $1000…Into $1.4 Million!
Swing Trading Tips
Buy near Open Price: If possible try to buy shares below open price, or at the open price. Do not buy them if the price surges than open market price , wait for the price to come down near open price and then buy that stock .
Check Buying volumes: Before buying check out the buying and the selling quantity. The stock may go up if buying volume increases.
Check Derivative status: Check out the derivative of the stock that you wish to buy , if possible. If it if up with increasing buying volumes, you could immediately grab that share. Most of the time, it has been found that stock or share surges proportional to the derivative surge.
Wait for the target price to buy: For example, if buy is given at 150.5, do not buy below this price, but at 150.5 price or slightly higher price. Share price may or may not go up above 150.5 for the given price, but not below the target price
Strictly maintain Stop loss : Maintain the given stop losses. This will help you to prevent from the huge loss. Suppose, for the moment , the stock what you bought falls drastically down, you may end up with the huge loss. So always maintain given stop loss.
Down wait for huge profit in single Stock: If you get some profit and notice its buoyancy then you have to sell your stock and come out of that trade. In this manner , you could earn small profit instead of loss then you could switch over to another trade and earn small profit . Likewise, if you keep earning couple of small profits in a single day , then your small profits will add up to huge profit amount in a single day . In day trading , you could forecast the move of the market using statistical tools. If you take a proper training on stock day trading , you could minimize the risk based on he mathematical analysis unlike the instincts working in any of the gambling games. Do not consider day trading as a tool to ‘get rich quick ‘ or ‘earn million overnight ‘.
How to beat the Market Consistently?
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If you are new, always buy when market is up and sell when the market is down. You could do opposite but that is complicated. This had been the trading in the right decision.
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You should consider it as business and ready to accept the loss. this means you should decide your selling price beforehand. If you achieve your desired profit, get out of the deal or if you make loss book the loss and prepare for the next step. Put control on your fear and greed.
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Follow the age-old practice not to pull all the eggs in the same basket. Invest money in blue chip as well as mid cap with high momentum, this will reduce the heavy losses against high return.
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Make an initial investment and always save some part of your profit as investment.
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Loss is the part of any investment. Have a modest initial target to beat the market by 10 percent per annum. Try to be an average investor first.
