Easy Process To Discover Stock Day Trading Ideas

Many individuals who are learning to short term trade all find themselves with the same challenge

. What is the best way to discover day trading patterns in real time. The dilemma is not just identifying some good ideas, it is locating sufficient of them to produce a difference. Trading and investing mostly an odds game. To come out victorious you want plenty of ideas in order for the probabilities work for you since a specified percent will wind up as a loss regardless of what level of proficiency you possess. The primary target is to try to end each day with a gain in your account. This indicates we likely have to identify at least five stock trading patterns every day. Not all trade patterns will be executed. Skipping trades happens everyday also, even more so if you are using limit orders to place your trades in a lower risk spot and the trade never gets filled.

One of the easiest methods to identify trade ideas is to make it simple. Put together a five min price chart of a stock, preferably one that has decent volume and volatility. Set up both bollinger bands and a 13 period simple moving average on the price chart. We are looking utilize the two of these to identify a trend and jump in the trend at a low risk spot. The key to this approach is to not speculate when a price trend will start - that means do not guess at price action. When looking to buy, we are planning to sit tight until the uppermost band is sloped up and the bottom band is sloped up for a minimum of 5 bars. We would like the price to have touched or pushed above the top band recently. We now check out the 13 period moving average. Anything in this region once the price has established a trend is fair game for placing an order. In some strong trends there may be almost no opportunities - meaning no retrace to the moving average or a little bit lower.

For a short setup we are will carry out just the opposite with a slight tweak. Short trends commonly tend to be quicker and have a lower ability to carry on the price trend. Right after price trades above the 13 period moving average the downtrend is completed the majority of the time. We need the top and lower price band to be sloped down for a minimum of the last 5 price bars. We want price to be at or beneath the bottom price band for a few bars currently. The entry in the downtrend is going to be about 50-75 % in between the 13 period average and the lower bollinger band. When attempting to place a short trade using this technique is likely to lead to smaller sized gains than the long entries.

One more detail to keep in mind when making use of this approach is to use it on lots of stocks simultaneously. Check that that you have many different industries included so you have a mixture of trade options to pick from. Most of the nice gains making use of this technique will take place in the first 3 or 4 hours of trading. As a result of some use, you should find that this method can get around a 65 % win ratio with no major losses. If you find yourself a long or a short and the bollinger bands start going sideways and you have'nt exited at a profit, you should look to exit the trade at the best price possible, even if that is a small loss. The average time in a trade from entry with this procedure is around 30 minutes or so. Anything greater than this time without nailing down a profit increases the chances of a losing trade.

by: Guy Pyette

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