Day Trading Strategies For Finding Profit Targets
Article by Lisa Simonelli Rennie
Day trading involves entering and exiting a trade within the same trading day, without holding stocks overnight. These trades can last anywhere from a few seconds to a few hours. Many people seem to have joined the day trading bandwagon lately, making online stock brokers quite happy with the new additions. Here are a few day trading strategies for finding price targets.
Day Trading Strategy #1 – Fading
Fading is a strategy in which the day trader shorts a stock after a fast upward move in a stock. These traders take profits when buyers come back into the stock, which can makes the prices start to lower. Technical indicators will start to show that the stock is overbought, and prices are ready for a trend reversal.
Certain buyers who bought shares of the stock early on when the price was lower may start to take profits at this point. Some buyers who purchased shares too late may start to get scared off at the possibility that the price might start to go down.
Day Trading Strategy #2 – Momentum
Momentum day traders follow news releases, or strong moves in a stock supported by high volume. The profit targets with this strategy are when volume starts to weaken, and unstable bars or candlesticks show signs of reversal.
Day Trading Strategy #3 – Scalping
Scalping is one of the most popular day trading strategies. This strategy involves selling almost immediately after you have made a profit from that trade. This is where the profit target lies for scalping. This type of strategy usually involves taking very small profits among many trades. Some scalpers may trade up to 100 trades per day.
Day Trading Strategy #4 – Daily Pivots
Day traders who use the daily pivots strategy focus on stocks with high volatility. They look for massive price movements to take advantage of. Their profit target will be at the first sign of price reversal. These traders will do their best to buy at the low of the day, and sell at the high of the day, at which point they take their profits.
If you’re new at day trading, start with a small number of shares, which costs no more than 1% of your total trading capital. Try these strategies to see which one fits your personality, and which you think you would enjoy operating on a daily basis.
About the Author
Lisa has been writing articles for many years. Come visit her latest website which reviews the best convection toaster ovens , and other types of toaster ovens , and other related info.
