Stock Trading Tip Bombshell

Posted by Sean Hernandez on November 25, 2009 under Finance | Be the First to Comment

If you enter a stock early in the day and the market keeps going in your favor, should you keep that trade overnight? What about over the weekend? By nature, these questions should only apply to money making trades. Taking a loss overnight is strictly for losers.

The new trader must shut down his day trades near the end of the day, but a toughened professional has the choice of keeping 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.

Now zilch is guaranteed, because the market could end close to its high, get blasted with dreadful news overnight, and open up precipitously lower. This is why just veteran day traders have the choice of keeping their trades overnight.

Research, knowledge, and discipline put your trades in a more cool headed, more cerebral base. You must research the past, estimate the likelihood, and attain educated conclusions for the future. When you day trade, there are oodles of minutes when the market goes nowhere, letting you calculate the numbers.

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?

When you arrive at the solutions, ascertain what occurred when the market closed within 10 ticks of the high, and so forth.

Pros are given to deal in the same market month after month, even when there is a high turnover of amateur traders. Pros have become accustomed to trading a certain method, and to trade with them you must identify those patterns and identify them on a stock chart.

You want to establish your trades on facts and probabilities, not on bowel feeling and hope. You need to do your own analysis. You can’t buy the solutions, because only finding them yourself will grant you the self-confidence to trade.

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