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Day Trading Styles

Day Trading Styles
By Adam Milton, About.com


Day trading is a very popular trading style with professional traders, and is used by individuals and commercial traders alike. Day traders always close their positions before the end of the trading day, which allows them to avoid potentially adverse conditions, such as opening gaps.


Trading Styles


There are several different styles of day trading, suited to different day trader personalities. The styles range from short term trading such as scalping where positions are only held for a few seconds or minutes, to longer term swing and position trading where a position may be held throughout the trading day. Most day trading systems have a lot of flexibility, and can have open positions for anywhere from a few minutes to a few hours, depending upon how the trade is doing (whether it is in profit). Some day traders will trade multiple styles, but most traders will choose a single style and only take that type of trade.


Day trading also has different types of trade, such as trend trades, counter-trend trades, and ranging trades. Trend trades are trades in the direction of the current price movement (i.e. buying if the price is moving up), and counter-trend trades are trades against the direction of the current price movement (i.e. selling if the price is moving up). Ranging trades are trades that go back and forth between two prices, and are used when the market is moving sideways. Most day traders will choose a single type of trade, but some traders will take different types, and choose which one to trade depending upon the current condition of the market.


In addition to the style and type of day trading, there are other variances between day traders. Some day traders like to make many trades throughout the trading day, while others prefer to wait for what they consider the best conditions for their trade, and perhaps only make one trade per day. However many trades are made, the trading process that is used, and the desired goal of making a profit, are the same.



-Scalping - Very short term trades that may only last a few seconds, with profit targets of only a few ticks. Scalping is usually performed using the time and sales (also known as tape) so that the trader can react as quickly as possible to the market conditions.


-Trend Trading - Short term trades that may last anywhere from a few minutes to a few hours, with profit targets of several or more ticks. Trend trading is performed using a graphical chart, with or without indicators, with trades following the current market direction (e.g. long trades on an upward moving day).


-Counter Trend Trading - Short term trades that usually last only a few minutes, with profit targets of several ticks. Counter Trend trading is performed using a graphical chart, with or without indicators, trading against the current market direction (e.g. long trades on a downward moving day).


-Range Trading - Short term trades that usually last only a few minutes, with profit targets of several ticks. Range trading is performed using a graphical chart, with or without indicators, trading in both directions (long and short) while the market moves sideways.






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Create Date : 19 กันยายน 2551    
Last Update : 19 กันยายน 2551 23:55:33 น.
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Day Trading Futures

Day Trading Futures
By Chuck Kowalski, About.com


What is Day Trading?


Day trading is the process of buying and selling futures contracts (with the goal of making a profit from the difference between the buying price and the selling price) within the same day. No open positions are held overnight. Day trades can last for a couple minutes or sometimes they are held for most of the trading session.


Theoretically, no positions are to be held overnight when day trading futures. This should allow the futures trader to sleep well at night knowing he has no open positions to worry about. Very often futures will open at a much different price than they closed the previous day. This means that you could have some very unexpected big losses while holding positions overnight if something crazy happens around the world.


I have to admit that you can learn a great deal about the futures markets in a short period of time from day trading. Day traders normally make a couple trades every day; compare that to position traders who might make one trade a week. In essence you are rapidly accelerating your trading experience and knowledge by day trading futures contracts.






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Create Date : 19 กันยายน 2551    
Last Update : 19 กันยายน 2551 23:50:27 น.
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