Here is a brief overview of some common day trading strategies:
Scalping
Scalping is one of the most popular strategies, which involves selling almost immediately after a trade becomes profitable. Here the price target is obviously just after profitability is attained.
Fading
Fading
involves shorting stocks after rapid moves upwards. This is based on
the assumption that (1) they are overbought, (2) early buyers are ready
to begin taking profits and (3) existing buyers may be scared out.
Although risky, this strategy can be extremely rewarding. Here the price target is when buyers begin stepping in again.
Daily Pivots
This strategy involves profiting from a stock\'s daily volatility.
This is done by attempting to buy at the low of the day (LOD) and sell
at the high of the day (HOD). Here the price target is simply at the next sign of a reversal, using the same patterns as above.
Momentum
This strategy usually involves trading on news releases or finding
strong trending moves supported by high volume. One type of momentum
trader will buy on news releases and ride a trend until it exhibits
signs of reversal. The other type will fade the price surge. Here the price target is when volume begins to decrease and bearish candles start appearing.
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