Trading tools and tactics


This part is nice and straightforward. Prices set to close and above resistance levels require a bearish position. Prices set to close and below a support level need a bullish position. Using chart patterns will make this process even more accurate.

You can calculate the average recent price swings to create a target. If the average price swing has been 3 points over the last several price swings, this would be a sensible target.

One of the most popular strategies is scalping. The driving force is quantity. You will look to sell as soon as the trade becomes profitable. This is a fast-paced and exciting way to trade, but it can be risky.

You need a high trading probability to even out the low risk vs reward ratio. Be on the lookout for volatile instruments, attractive liquidity and be hot on timing. Popular amongst trading strategies for beginners, this strategy revolves around acting on news sources and identifying substantial trending moves with the support of high volume. You simply hold onto your position until you see signs of reversal and then get out.

Alternatively, you can fade the price drop. This way round your price target is as soon as volume starts to diminish. This strategy is simple and effective if used correctly. Just a few seconds on each trade will make all the difference to your end of day profits. Although hotly debated and potentially dangerous when used by beginners, reverse trading is used all over the world. This strategy defies basic logic as you aim to trade against the trend. You need to be able to accurately identify possible pullbacks, plus predict their strength.

To do this effectively you need in-depth market knowledge and experience. It is particularly useful in the forex market. A pivot point is defined as a point of rotation.

Note that if you calculate a pivot point using price information from a relatively short time frame, accuracy is often reduced. You can then calculate support and resistance levels using the pivot point.

To do that you will need to use the following formulas:. When applied to the FX market, for example, you will find the trading range for the session often takes place between the pivot point and the first support and resistance levels. This is because a high number of traders play this range. Requirements for which are usually high for day traders.

When you trade on margin you are increasingly vulnerable to sharp price movements. Yes, this means the potential for greater profit, but it also means the possibility of significant losses. Fortunately, you can employ stop-losses. The stop-loss controls your risk for you. In a short position, you can place a stop-loss above a recent high, for long positions you can place it below a recent low. You can also make it dependant on volatility. One popular strategy is to set up two stop-losses.

Firstly, you place a physical stop-loss order at a specific price level. This will be the most capital you can afford to lose. Secondly, you create a mental stop-loss. Place this at the point your entry criteria are breached. Forex strategies are risky by nature as you need to accumulate your profits in a short space of time. The exciting and unpredictable cryptocurrency market offers plenty of opportunities for the switched on day trader.

Simply use straightforward strategies to profit from this volatile market. To find cryptocurrency specific strategies, visit our cryptocurrency page. Day trading strategies for stocks rely on many of the same principles outlined throughout this page, and you can use many of the strategies outlined above. Below though is a specific strategy you can apply to the stock market.

This is one of the moving averages strategies that generates a buy signal when the fast moving average crosses up and over the slow moving average.

A sell signal is generated simply when the fast moving average crosses below the slow moving average. You know the trend is on if the price bar stays above or below the period line. Spread betting allows you to speculate on a huge number of global markets without ever actually owning the asset. Plus, strategies are relatively straightforward. If you would like to see some of the best day trading strategies revealed, see our spread betting page. Developing an effective day trading strategy can be complicated.

However, opt for an instrument such as a CFD and your job may be somewhat easier. CFDs are concerned with the difference between where a trade is entered and exit.

Recent years have seen their popularity surge. This is because you can profit when the underlying asset moves in relation to the position taken, without ever having to own the underlying asset. Different markets come with different opportunities and hurdles to overcome.

Day trading strategies for the Indian market may not be as effective when you apply them in Australia. It was one of the first firms to allow investors to directly buy stocks through their computers, thereby by-passing the traditional broker. The firm's founder Greg Capra is a pioneer in the field of day trading and co-authored the seminal book "Tools and Tactics for the Master Day Trader". On January 6, , Mastertrader.

Greg Capra is now licensed at Lightspeed Trading where long-term clients have followed. Lightspeed Trading is now the preferred broker of Greg Capra and Pristine.

The firm was one of two divisions of a parent company called Pristine Capital Holdings. The second division, Pristine. The main business of Mastertrader was to provide trading platforms and support services to active traders and investors.

The main trading platform it offered was the RealTick platform created by Townsend Analytics. It also offered the eSignal trading platform owned by Interactive Data Corporation , as well as two others.