Thursday, October 15,
2020 / 02:20PM /Sponsored Post by Mark Adan /Header
Image Credit: Business News Daily
There are thousands of stocks available for you to trade across the stock market. However, day trading gives you the option of choosing the best paper. But, if you have such an opportunity, what would you do? Selection stock remains that first step to take while day trading. The other step should be trading the instruments you selected.
Therefore, how will you select intraday trading stocks? There are some essential day-traders.net rules to follow, and they include:
Liquidity stocks refer to those stocks having large trading volumes. If you choose these types of trading, they allow you to take significant positions without affecting the price.
However, the effectiveness of day trading will depend on the accuracy and speed of order execution. The reasons for large volume help facilitate entry and exit of transactions.
If you want to earn money with day trading, then the stocks should move. However, there are two options when selecting stocks. You should choose securities that will run well in absolute terms and percentage. That's because the two fillers give you different results. If you look at those stocks going for 3% or even more in a day, they will provide you with stable opportunities for day trading. The same is also said to the stocks going on an average of $1.5 and above per day.
Following the Trend
Some traders will try and play against what the others are doing. However, it still works with the stocks going with their index group. It, therefore, means that when the index goes up, the stocks will grow. It, therefore, stands as an essential thing when considering day trade and can allow you to trade the weakest and strongest stock during that day.
Nevertheless, other traders will prefer trading only one type of stock. If you're in such a situation, it's best you focus solely on the stock and not how it will behave depending on other tools.
Understanding Entry and Exit Strategies
If you're able to choose the best stocks in the market, the success of your trading depends on your trading strategies. You can consider the many available strategy options. However, if you want to increase your success likelihood, you have to build your success depending on specific principles and lay some reliable trading signals.
You can consider these guidelines:
Trading towards the Current Intraday Trend Direction
The stock market usually moves in waves. So, your main objective is catching the desired wave. In the uptrend period, always focus on long positions, and if the trend goes down, only trade in shorts.
However, the intraday trend doesn't continue indefinitely, but you have a chance to make some transactions while it unfolds.
Trade strong Stocks on an Uptrends and Weak Stocks at the Downtrend
It's essential to choose the best instruments to trade in a day. You can choose those stocks having the least medium or those with high cooperation with Nasdaq or S&P 500 and look at papers demonstrating their strength and weakness of their index. With such instruments, they provide you with more significant opportunities for day trading because strong stocks will grow.
Trend lines act as a visual reference in determining the start and end of the price waves. When you want to select stocks you can trade in a day, you can use and search the entry points during your next trend of movement.
If you open a long position, you should buy a stock when the price drops to your trend line. Such a line should connect the lowest points of waves, and they can be extrapolated and move to the right.
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