Day Trading Techniques

I chuckle as I write the title for this commentary for the very simple reason that it is a line heard so often on the sales and trading desks on Wall Street. We can get a sample of “what the smart money is thinking and doing” from a very recent Bloomberg Poll. Be mindful that those polled represent a global random sampling of 1,263 Bloomberg subscribers. Would you like to know what they think of the following? 1. Which national markets will offer investors the BEST and WORST opportunities over the next year? 2. What asset class will offer the BEST and WORST RETURNS over the next year?  3. What do those polled think of their regional economy, the U.S. economy, and the global economy? 4. Where will the U.S. dollar stand relative to the Euro three months from now? 5. How do these global investors intend on shifting their exposures across asset classes over the next six months? (I find this question to be particular...

Spread betting is a risky game of trading in which you can lose more than you have in your account. That's because of leverage. Every time you buy or sell a market, you just need a small fraction of your total trade – a margin, which can be as low as 1-2%. If the market goes against you quickly, then you could be in trouble. That's what most people think – but are they correct? Spread betting has in fact some risks, and losing more than what you have in your account is a real possibility, but depending on your provider and on the type of trades you carry, it can be a really low one. Before going broke, there is a margin call trigger, in which most providers will automatically start closing positions you have in your account until the margin is again satisfied.

Fear is an ingredient of life. It has been said that people must “face the thing you fear, and you do away with that fear.” Different individuals have different types of fear. The day trading industry has its own fear; they label it “barriers.” Barriers are real, but groundless. People create them for no apparent reason. There is no reason for new investors to become overwhelmed by barriers, especially if their money is at stake. With this, traders need to think of ways to overcome their barriers. The most common way is to use the techniques and tools to build a solid strategy, then follow it diligently. This is the only way to ensure years of successful day trading. Educate Yourself There is no better way to prepare to beat the barriers than education. Once familiar with the ins and outs of day trading, confidence will drive the strategy. New traders need to understand the dangers of the day trading market. Most...

When compared to trading in other financial instruments such as equities, trading in Forex has some distinct advantages. They include: • The Forex market is the largest financial market and thus no single person or entity has the ability to corner or dominate the market. • The Forex market has an average of $3.2 trillion dollars per day. With such a large volume, no one can hope to control the market for an extended period of time. • Taking charge of your own finances. You will be able to harvest better returns than those of mutual funds or hedge funds. • The initial capital outlay is low when compared to equity trading. • The Forex markets moves in patterns. Thus with technical analysis, one can actually predict the trends in the Forex market. • There is a high level of leverage to utilize when it comes to Forex trading unlike the equity market. • With 24 hours trading and its high trading volume, the Forex market is...