Day Trading

In order to profit from the forex market, you will need strategies and also the will to change these strategies. Traders who lack a well thought out trading plan are prone to panic and confusion, when unexpected swings in the forex market occur. Many traders will tell you that trade driven by emotion is the fastest way to deplete your funds. Whether or not you are using a technical or fundamental style, it is still essential that you have a proper view of the market.

Developing your own trading style is a time consuming process and is often acquired through trail and error. It is unfortunate that there is no ‘golden’ rule’ to trade in the forex market and technical and fundamental styles of trade won’t be successful all the time. Successful traders often have a unique style of trading and take up various strategies during a trading session. Only continuous practice will help you gain a feel for the movements of the forex market.

Best of luck, just hope you have an iron stomach, because it is not a game for people with a weak stomach.

Now, keep in mind that the premarket trading doesn't open where it left off the day before, but rather, where the current bid/ask prices are. Thus, if a stock closed yesterday at 10 bucks, came up with stellar earnings this morning at 7:30, you'd expect the initial bid/ask to be above 10 bucks (as everyone, not just you, got this news). Now, it is possible that the last trade for the stock this morning was lower than the pre-market bid/ask. But it is the current bid/ask price that matters and tells what you can get for it now. Thus, you wouldn't be able to pick it at 10 bucks pretrading. Now, it is possible that if you premarket trade and you get the stock early in the day, you can appreciate the continued rise during the day of that stock (although you probably could have done the same by just buying it at market open). However, the premarket trading could have also over-reacted (in particular, if the stock is very lightly traded). If the latter is the case, then you would have been better off just buying the stock at market open.

Bottom-line is that you should probably buy/sell stocks pre/after-market just as you would normally, keeping in mind everyone else has the news too. Further, you should be careful of large spreads with the after-hours trading, as it reduces possible gains. Hopefully this helps?

First, you're using Vantage Point to day trade, but they will tell you that Vantage Point is for position trading. Yes, they're predicted high/low is very accurate (granted, major moves can be outside the range, but how often do you have a huge 1 day move?), but it only tells you the possible high/low, now what the trading pattern for the day will be.

One thing I could suggest is this: Use the Short Term/Medium Term Predictive averages (the pink and light blue lines, I have mine set on the bottom part of the chart) to get an idea of when prices could be changing direction. Also, when you switch from the 10 day or 5 day average to the predicted high/low, you'll notice that the short/medium predictive lines will be different that from the 10/5 day chart. What I do is when the short predictive (light blue) line crosses the medium (pink) line on both the 5/10 day and predicted high/low chart, is when I get an indication markets will turn (and it's very accurate).

When that happens, since you day trade, use your technicals on whatever time frame chart you're using to take trade only in the direction of the crossover. For example, say you're watching the S&P 500, the market is trending up and you notice that on the 5 or 10 day chart that the short term predictive has crossed below the medium term, and when you switch to the predicted high/low chart that the short has not crossed below the medium predictive, but is about to, wait till the short crosses below the medium predictive on the predicted high/low chart (that is short has crossed below medium on both 5/10 and predicted high/low chart). When that happens, use your technicals to time short entries, don't go long. In other words, say you're using a 5 minute chart. If the market is trending up, and you're technicals give you a signal for a short, then take the short trade.

When the signals show the 5 minute chart starting to turn back up again, close your short, but do not go long, only enter again when you get a sell signal.

Trade in the direction of the larger trend. You should get less whipsaws and will be trading in the direction of the larger trend. When the short crosses above the medium predictive on both the 5/10 and predicted high/low chart, the only take long trades.

Hope that helps.

The books recommended by others here are great. It's hard to advise you further not knowing how much you do/don't know about the market. The paper trading practice sites are an essential. Try those out in earnest and you'll save yourself from unnecessary mistakes later when errors cost real money.

I find that it's important to do a few things:

1. Chart the S&P for uptrends and downtrends – when you see an established trend the market will tend to move that way, and stay within the down slope and up slope "channel" in its daily activity for multiple days. This gives you added confidence as to when to "buy", when to "add to" your position, and when to cash out. When a stock busts out up or down that can be the opportunity to get in or out (depending on direction) of a given index, ETF, or stock. This will also help you stabilize your stock monitoring because you will focus on the stocks at present which are near "support (floor)" or ceiling (resistance)" positions. To help me do this, I've found it is incredibly valuable to have a second computer screen (I use two PCs because I'm mobile when I want to be) with several key screens of data/chart references.

One screen has no more than 6 stocks I'm watching that day, with charts on each screen.

One screen has all major sectors' charts on it – by sector fund (USO, OIH, etc.)

One screen has 52 week uptrending stocks I'm monitoring for pullbacks

Other screens are categoric (e.g., AG companies)

2. Using other resources such as the 52 week high stocks (WSJ, YahooFinance, Google Finance, etc.), and Top 100 (IBD.com) are also opportunities to check for trends, and determine whether to jump on this momentum during a given day, or to wait for a pullback and get in before a multi-day upswing for a multi-day "swing" trade. If you put in the time, you will identify pending breakouts.

3. Listen to Fast Money to pick up on hot trends and expert interviews that can indicate stocks to watch since they have such a wide audience.

4. Keep track of volume levels and beware of low volume days.

5. Track sector movement and rotations. Institutional buyers will dictate what will move, whether it "makes sense" to you or not.

6. Listen to Art Cashen (sp?) – every morning about 9:15 AM EST before the market opens. His insights are usually good indicators to align with or watch for. Good pulse on the market.

7. Know that a margin account can be traded every day with no interest if you don't carry it over night. Non-margin accounts will have a 3 day carry cycle until you can reinvest the funds.

Best wishes for success. Cramer can be a goof on some topics, but knowing what he's tracking can also give you one or two key stocks to watch for the next day if conditions align to support those stocks. His trading rules lists are very good.

Most highly trained professionals refuse to day trade. Many amateurs think they are smarter than the pro's and try their hand at day trading. Fools rush in where wise men fear to tread…

Read these links:

http://www.sec.gov/investor/pubs/daytips.htm

http://www.ftc.gov/opa/2000/05/daytrading.shtm

http://www.ftc.gov/bcp/conline/pubs/invest/daytrade.shtm

http://www.fool.com/investing/small-cap/2004/12/27/daytrading-dangers.aspx

Any person, website, company that is going to charge you for trading tips is most likely making more money on you than they ever will following their own advice.

The whole premise behind active trading is that the market is ineffeicient and thus, short-term opportunities arise to take advantage of such innefficiencies. The problem is that once an inefficiency is identified and gets mass publicity, it ceases to work as the trading/investing community starts to discount that information into the price.

What you need is education, not tips. Its the difference between being given a fish and learning to fish. Some strategies very well may work 80-90% of the time IN SOME SCENARIOS. But nothing will work 80-90% of the time in every kind of market.

There are really 2 main kinds of strategies out there.

1.) Those that work in a trending market
2.) Those that work in a range

The only thing these paid services are SOMETIMES good for is leads. Its up to you and your education & judgment to determine if these leads are good enough to implement with your hard earned cash.

But in order to decide this, you must have some method that you are consistently using to discriminate between what makes a good and what makes a bad trade. If you are not willing to take the time to learn this, then you should simply put your money in an ETF and/or mutual fund and be happy with getting your 8-10% on average.

If you are willing to educate yourself there are a number of resources available to you.

http://www.EliteTrader.com is a thriving community of traders where you can get brokerage reviews, vendor reviews, educational material reviews, etc…well worth looking into.

http://www.WilyTrader.com is a blog where you can see first hand what it is like to be an active trader and get a feel for the different kinds of strategies that are necessary for success.

http://www.traderfeed.blogspot.com is Brett Steenbarger's website where he talks about the psychological aspects of trading

http://www.Amazon.com : and look up the following books/authors:
The Master Profit Plan
Mastering the Trade
Brett Steenbarger (Get both of his books)
Trading For a Living

In short, just be very careful about any service offering you the sky. I guarantee you that such rewards to not come without great risks, and more often than not, those risks will come to fruition way before you see a dime of those rewards.

Hope this helps

Hope this helps!

Regards,