Stock Trading Fat Cat Revelations
Whenever you get into a trade early on in the day and the market keeps on going in your favor, should you keep that trade overnight? What about over the weekend? Keep in mind, those questions only apply to money making trades. Accepting a loss overnight is purely for losers.
A newbie must shut down his day trades near the end of the day, but a schooled stock trader has the choice of staying in them overnight. When a market closes within a few ticks of its high, it normally goes past it the next morning. A market that closes on its lows normally baits with lower lows the following day.
Today nothing is assured, as the market could end near its high, get smashed with awful news overnight, and open sharply lower. This is how come only experienced day traders have the option of holding their trades overnight.
Research, knowledge, and discipline cast your trades on a more composed, more intellectual foundation. You must research the past times, calculate the odds, and arrive at schooled conclusions for the future. When you day trade, there are dozens of minutes when the market goes nowhere, allowing you to estimate the totals.
Some traders use two monitors where one monitor is the stock trading platform and the other monitor is used for research.
Get one year’s history for the market you are day-trading. Make it into a spreadsheet and start postulating questions. Every time the market closed inside 5 ticks from its daily high, how many times did it make a new high the next day? How far did it break away the following day? What about the days when that market closed within 5 ticks of the lows? How low did it go the next day?
Once you get the answers, figure out what happened when the market closed with ten ticks of the high and ten ticks of the low.
Professionals are inclined to trade in the same market month after month, even when there is a lot of turnover of amateur traders. Professional traders have become habituated to trading in a certain technique, and to trade like them you must discover those patterns and express them in numbers.
Strive to make the foundation of your trades on objective chart analysis and not subjective gut feeling. You must learn the money making chart patterns and then find them yourself on various charts. You need to do this because only then will you gain the confidence to make better trades.
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