Day Trading


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	------------------------------------------------------- Strategies ------------------------------------------------------- Day Trading As with all classifications of trading money can be made with day trading. It is up to you to determine the risk, breakeven and reward for each trade made before placing the order with your broker. The definition of day trading is as follows: Day Trader – by strict definition, the day trader buys stocks each day and sells all shares of those stocks before the close of each day. The day trader does not own any positions at the close of any day. When you buy and sell the same security on the same day brokerage firms place additional requirements on you. Brokerage firms monitor your trades and your trading pattern. Once you are flagged as a day trader, the brokerage firm will require you to maintain a minimum balance (i.e. $25,000) in your account. If you withdraw money or lose on some trades that cause your balance to go below the minimum, the brokerage firm will place a call on your account. If you are trading on margin there are even more rules that will be placed on you! Being labeled a day trader is not necessarily a bad thing. It does, however have its consequences. Not keeping your balance to the required minimum or not sending additional money in to your brokerage account could trigger the brokerage firm to sell securities. You do not want this to happen! In order to determine what your trading firm considers a day trader simply call them! Ask what constitutes a day trader and what requirements they place on customers once they are flagged as a day trader. There many strategies that are available to the investor that desires to profit from day trading. The strategies that we present are specific to the research we conduct to find range bound stocks only. Remember, range bound stocks are stocks that are neither trending up nor trending down. They are moving sideways in a pattern that shows a definite low (support) and high (resistance) for a specific period of time. Once these stocks are identified we look for daily price patterns or cycles. The two price cycles we look for are as follows: Daily Gap Cycle (DGC) – is the difference between the stocks opening price and its low price for the day and the difference between the opening price and its high price for the day. Overnight Gap Cycle (OGC) – is the difference between the previous day closing price and today’s opening price. This strategy requires strict adherence to the principle of short term trading which is to exit all trades before the end of each trading day. As with all of the strategies presented in whentobuy.com conditional orders are used to protect capital invested by reducing risk and to identity profit targets. If your broker does not allow conditional orders you should change brokers immediately! Technical analysis shows us that price is not random, price anticipates fundamental change and that the relationship between price and time is linear. While there are over two hundred items to review in technical analysis only two are used to identify daily and overnight gap cycles. Price and volume for liquidity are the most reliable items to analyze in this strategy. The three-month chart pattern for ISIL illustrates a stock making new highs then pulling back. This three month chart clearly shows that ISIL is not trending up nor trending down its simply range bound – moving sideways. The candlestick price bars for ISIL shows a wide price range that has occurred during each day of its three-month chart. We research these daily price gaps and give to you a bonus weekly selection. The average daily price rolling gaps are analyzed and only those stocks that have been identified as range bound with a probability of gapping are identified. ISIL had for some time a 90% probability of making money on a day trading play. For example, purchasing 300 shares at the opening price and selling for a $.50 profit produced a yield of $150, less commission. In nine out of ten days this stock produced a $1,350 gain using this trading strategy. Want to learn what trades to place for bull or bear trades using this day trading strategy? Join now! Back Whentobuy.com and this newsletter are provided for educational purposes only. No statement in the documents should be construed as a recommendation to buy or sell a security or to provide investment advice. It is possible at this or some subsequent time, the editors or staff of whentobuy.com may own, buy or sell securities discussed. All investors should consult a qualified professional before trading in any security. Before trading stocks or options you should understand the risks. In addition, anytime a stock or option is purchased or sold, transaction costs including brokerage fees are at risk. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy and completeness. \| Swing Trading \| Day Trading \| Significance of Volume \| Daily Gap Cycle \| Overnight Average \| Stop Loss \| \| Range Bound \| Continuation \| Strategies \| Practice Trades \| Performance \| Cancel \| Options \| Useful Links \| \| Order Now \| Return Home \| Home Business \| Digital Economy \| Sign In \| Disclaimer \| Training Center \| FAQ \| What's New \| Contact Us \|