AVOID POSITION IN STOCKS WHEN NIFTY WEEKLY TREND IS NEGATIVE TO SEE TREND:CLICK HERE
VOLUME BREAKOUT TRADING {HOW TO USE THIS PAGE: CLICK HERE}
AVOID POSITION IN STOCKS WHEN NIFTY WEEKLY TREND IS NEGATIVE TO SEE TREND:CLICK HERE
Scalp trading is one of the most challenging styles of trading to master. It requires unbelievable discipline and focus. Scalp trading has been around for many years, but has lost some of its allure in recent times. Traders are attracted to scalp trading for the following reasons:
Decimal System
Back in the days when stocks were quoted in fractions, there was a
standard spread of 1/16 of a dollar or a "teenie". This spread allowed
scalp traders to buy a stock at the bid and immediately sell at the
ask. Hence the teenie presented clear entry and exit levels for scalp
traders. The scalp trading game took a turn for the worst when the
market converted to the decimal system. The decimal system closed the
"teenie" often times to within 1 penny for high volume stocks. This
overnight shifted the strategy for scalp traders. A scalp trader now
had to rely more on their instincts, level II, and time and sales
window.
Scalp Strategies
A scalp trader can look to make money in a variety of ways. One method
is to have a set profit target amount per trade. This profit target
should be relative to the price of the security and can range between
.%1 - .25%. Another method is to track stocks breaking out to new
intra-day highs or lows and utilizing Level II to capture as much
profit as possible. This method requires an enormous amount of
concentration and flawless order execution. Lastly, some scalp traders
will follow the news, and trade upcoming or current events that can
cause increase volatility in a stock.
Winning is Critical
Unlike a number of day trading strategies where you can have a win/loss
ration of less than 50% and still make money, scalp traders must have a
high win/loss ratio. This is due to the fact that losing and winning
trades are generally equal in size. The necessity of being right, is
the primary factor scalp trading is such a challenging method of making
money in the market.
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Professional day traders always have a strategy, this means that they have a method that is designed to have a positive effect on a certain trade that could last as little as a couple of hours. The day trading strategy is the most popular strategy out there and it is for this reason that many forex experts provide strategies that are used for day trading in the stock market.
The great thing about the forex currency market is that it is particularly liquid, this is the reason that a great number of people can use the same strategies and day trading indicators without having a significant effect on the markets pip prices. The art of being a successful day trader is to have plenty of discipline, there are many times when you may have a loosing day but you will need to be able to look at these loosing days and not worry. This is the mindset of a successful day trader.
If you do not have a set plan of action then you will find it impossible to become a successful day trader, there are far too many other people trading on the stock market. People who trade on the stock market are attracted by the huge leverage and the many other benefits that are available to the day trader. The problem with this is due to an influx of new traders the currency prices can be pushed up and down without the use of any set strategy or system.
It is of utmost importance to know the personality of the market you have decided to trade in, I say this because each market has it's very own characteristics and day trading indicators that must be known by the trader if they are to be successful. Day trading in the stock market is no different, you need to be able to look out for the various day trading indicators and know exactly what these are.
As I have said before the secret to success day trading stocks is to have a good system or strategy and be disciplined enough to stick to it, this way you will be sure to turn a profit.