Day trading strategies: the complete guide with all the advanced tactics for stock and options trading strategies. Find here the tools you will need to invest in the forex market
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BOOKS.YOSSR.COM-DAY-TRADING
Know your filters
Day trading is about more than finding stocks that are high in volume, it is also about finding those that are currently experiencing a higher than average degree of movement as well. The following filters will help ensure that the stocks you find have plenty of both. Steady volatility: In order to trade stocks that are extremely volatile with as little research as possible, the following criterion is a good place to start. While additional research is always going to be preferable in the long run, you can find success if you run this scan once a week and pay close attention to the results. This list should ideally return stocks that have moved at least 5 percent every day for the past 50 days. It is important to use a minimum of 50 days, though 75 or 100 will produce even more reliable results overall. Results of this magnitude will show that the stock in question has moved a significant amount over the past few months which means it is likely to continue to do so for the near future. The second criterion will determine the amount you should be willing to pay per share and can be altered based on your personal preferences. The third criterion will determine the level of volume that you find acceptable for the given timeframe. The example will look for volume that is greater than four million shares within the past month. From there, it will eliminate leverage ETFs from the results which can be eliminated if you are interested in trading ETFs. Finally, the add column will show the list of stocks with the largest amount of volume and the greatest overall amount of movement. Selecting these columns will then rank the results from least to greatest based on the criteria provided. Monitor regularly: Alternately, you may want to do a daily search to determine the stocks that will experience the greatest range of movement in the coming hours. To do so, you will want to create a new list of stocks every evening to ensure that you will be ready to go when the market opens. This list can then be made up of stocks that have shown a higher volatility in the previous day either in terms of gains or in terms of losses. Adding in volume to these criteria will then help to make sure the results will likely continue to generate the kind of volume that day trading successfully requires. Useful filters for this search include an average volume that is greater than one million and the more you increase the minimum volume the fewer results you’ll see. When using this strategy, it is especially important to pick out any stocks that are likely to see major news releases before the next day as these are almost guaranteed to make the price move in a number of random directions before ultimately settling down. As such, it is often best to wait until after the details of the release are known and you can more accurately determine what the response is, though not so long that you miss out on the combination of high volume and high volatility. If you don’t already have an earnings calendar bookmarked, the one available for free from Yahoo Finance! Is well respected. Monitor intraday volatility: Another option that is worth considering is doing your researching during the day as a means of determining which stocks are experiencing the greatest overall amount of movement at the moment. |
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