Day Trading Strategies to Improve your Performance and Profitability

Posted by Deb | Guest Post | Thursday 5 July 2012 11:04 pm

Day traders are seeking to make a profit by leveraging large amounts of capital in order to take advantage of small price movements in highly liquid stocks or indexes. In this article we look at some strategies that can be used to improve your performance and in doing so, increase your profitability.

Certain stocks are better than others as candidates for day trading. A day trader should look for two key elements in a stock, liquidity and volatility. Liquidity allows you to enter and exit a stock at a good price with a tight spread (increasing your profit with lower commission charges) and low slippage. Volatility can be your friend as the greater the volatility in a stock price the more potential there is for profit but also a loss.

Once you identified the type of stocks that you wish to trade in you then need to identify the most advantageous entry points and there are tools that can help you in this regard.

Intraday Candlestick Charts – These charts provide a basic analysis of price movements

Level 2 – This a service that provides real time access live price movements

Real Time News Service – If there is one thing that can cause a price movement it is news and if you are to profit from day trading, a live news feed is essential in order to capitalise on good and bad news as it is being delivered.

Understanding and interpreting the patterns created by candlestick charts allows you to identify a profitable entry and exit point based on the data. If you can identify the volume spike it is an indication of whether traders are supporting the price at a particular level and backed up by looking at prior support, you can begin to see the range where you can get in and out of a stock with a profit. Using these charts in conjunction with Level 2 Market Data, which shows you all the open orders and their relative size, should when used correctly, give you the tools needed for a successful day trading strategy.

Identifying a price target will largely depend on your risk profile and trading style. There are a number of tried and tested strategies if you are looking for an “off the shelf” solution that will then help you to hone your skills to a particular style that suits you.

Scalping is one of the most popular ideas. This involves basically selling as soon as a trade has moved into a profit situation. As the saying goes, a profit is a profit, but you will have to have a reasonable turnover to show a decent profit overall if you are exiting as soon as a trade becomes profitable.

Fading is based on shorting stocks after rapid upward movements. The strategy works on the assumption that the stock has initially been overbought and also assumes that early buyers will be looking for a quick profit. Fading is risk but also rewarding and you simply set the price target at a point when buyers begin to buy in numbers.

Daily Pivots is a trading method working on the basis that you are seeking a profit from a stocks daily volatility, rather like fading, you attempt to but at the lowest price point in the day and sell at the highest point, using the trading patterns to identify the timing of these trades.

Momentum Trading is essentially trading around news releases or trends supported by high volumes. You can either be a bear or a bull using this strategy, depending on your style of trading and point of view.

The fundamental difference between a day trader and a regular trader is that when you are trading on margin, you are far more vulnerable to sharp price movements than someone taking a longer term view. This is why you need to determine a stop-loss, crucial to any day trader.

A stop-less that reflects your risk tolerance would be when a price level is hit where you have reached the maximum amount you are prepared to lose. A lot of day traders also tend to have a second stop-less strategy which mainly involves setting a financial limit per day of what you can afford to lose and making sure they stick to it. You are not going to come out on top every day so it is essential for your wealth and your health that you avoid the classic mistake of chasing losses and accept defeat gracefully. There is always the next day and by using basis strategies but enhancing them with your own techniques and opinions you should be able to improve your performance and profitability.

Written by Liz Goldman, financial writer and part-time day trader, who writes for MahiFX


Insider Stock Tips and Their Role on General Trade

Posted by Deb | Guest Post | Friday 15 June 2012 12:35 am

Insider trading is a term that includes both illegal and legal stock trading conduct. Legal stock trading happens when corporate personnel like directors, officers, and employees sell and buy stock in the companies that they work. All trades done by corporate insiders, in their own companies, must be reported to the SEC (Securities and Exchange Commission). On the other hand, illegal insider trading deals with the selling or buying of securities that breaches the relationship of confidence and trust while in possession of non public and specific information about own companies stocks. Violations for insider trading include tips used by employees themselves or by anyone else that misappropriates this information for trades. Since illegal insider stock tips affect general trades by diminishing the overall investors’ trust in the integrity and fairness of the U.S. security market, the U.S SEC prioritizes the prosecution and detection of illegal insider trades.

Civil Enforcement of Trades

The U.S. SEC’s civil enforcement against illegal inside trading is a very powerful tool. The U.S SEC has ample authority to research violations of security regulations, including insider trades. Informal investigations, done under Commission authorization, usually request information on trades to be provided voluntarily. However, formal investigations have subpoena power for witnesses to give records, books, and related evidence or even testify.

Illegal Insider Trades

The SEC has brought cases against the following types of insider trades:

  1. Corporate employees, directors, and officers who traded corporate stocks after confidential and significant information was known.
  2. Any person who received tips by such corporate employees that traded stocks with the confidential information given.
  3. Employees of brokerage, banking, and law institutions who obtained confidential information by providing corporate services in order to personally trade stocks based on such information.
  4. Government workers that trade stocks based on confidential information learned through their government position.
  5. Any other person that takes misappropriates and advantages of confidential information from an employer to perform security trades.

Legal Insider Trades

Legal insider trades are done on a daily basis by corporate insiders like employees, directors, and officers by selling and buying stocks from their own businesses within the limits of company regulations and policies that rule this type of trading. Insider stock tips that result in trades must follow SEC’s regulations. SEC imposes limits on how insider trades can be performed based on pre-existing contracts and the specific information material of these insider tips.


One of the main reasons for capital to be available in high quantities in the U.S. security market is achieved from the investors’ confidence of the market’s fairness. Fairness is a critical factor on stock market trading which rules all insider trading. For example, there is a common belief in Europe that only some investors can constantly profit from having access to confidential material. This belief has caused Europeans to hold less stock on average in their respective markets in comparison to the more active U.S market. This is one of the reasons for the U.S. SEC to actively enforce insider trading to boost investors confidence in a security market as equal as possible.

Insider trading policies take into consideration the importance of attracting both national and international investment capital in the U.S market by increasing investors’ confidence. Many laws have been created to limit how insider trades are done since investors should have equal opportunities to profit from the market. These laws are meant to provide a security market where individuals can invest without the need to possess confidential corporate information.

This article is provided courtesy of Auto Loan Experts, a consumer finance website providing information and tools on auto loans for bad credit and other personal credit services.


When Will I be Back to Trading?

Posted by Deb | Day Trading Journey | Friday 8 June 2012 2:52 pm

I got a few inquires from readers of this blog wanting to know if I am back to trading yet. Well, first, thanks for asking. And no, I am not yet back to futures trading. I do intend to get back to this, probably in a few months.

After I lost most of my capital, I decided to wait till I will feel less anxious about trading. Last time, I felt I was somehow causing this failing myself. I got to a stage where I had a wonderful month, making more and more profit, and then – boom! I failed and lost everything. I feel there was something psychological about it, not being ready for this.

I hope to be back to trading and blogging again about my trading experience in a few months. When I feel ready.

Meantime, I am trying some other “making money online” schemes. I will write about this soon.


One More Fascinating Talk by Melanie Phillips

Posted by Deb | Life in General,Politics | Tuesday 29 May 2012 12:08 pm


Melanie Phillips Interviewd for Israeli TV

Posted by Deb | Politics | Tuesday 29 May 2012 11:33 am


The Five Golden Rules of Day Trading

Posted by Deb | Guest Post | Monday 28 May 2012 12:37 pm

Before you start day trading, you have to make sure you’ve got your account set up properly, and that you have taken several steps to simplify the trading process. Day trading should be thought of as a job, not a hobby. If you approach it with a very lackadaisical attitude, you’re going to get very mediocre results. The worst-case scenario is that you’ll just lose a bunch of money. To avoid wasting your time and resources, always obey these five simple rules:

1) Trade Only With Current Intra-Day Trends

The trend is your friend. Trading on it will reduce the risk inherent in day trading. Trading with the trend allows for low-risk entries and a high profit potential. While intra-day trends don’t continue indefinitely, you should be able to get a couple of good trades per day in before the trend reverses.

2) Trade Strong Stocks in an Uptrend, Weak Stocks in a Downtrend

A lot of traders find it useful and beneficial to trade stocks or ETFs that have a moderate or high correlation with the S&P500. Some like the Dow and the NASDAQ. Some like all three. If you stick to trading stocks or ETFs with a high correlation to the major indices, you can isolate strong and weak stocks.

When market futures are moving higher, you should buy stocks that are moving up more aggressively than futures. When futures pull back, a strong stock won’t pull back as hard. It might not pull back at all. The stronger stocks are the ones you want to trade. The smaller pullbacks mean lower risk for you.

When indexes and futures are dropping, you sell short stocks that drop more than the market. The same rules apply here as with strong stocks. It’s almost like a mirror image. You’re selling short the weakest of the bunch. Weak stocks don’t recover before the stronger ones, Again, when you’re selling short, this means more profit and less risk.

3) Wait for the Pullback

Trendlines in your trading software will show you how the market moves. Usually, it moves in “waves.” Trendlines are an approximate visual guide to where the prices will go. When you enter a long position (i.e. when you’re buying stocks or ETFs), buy after the price moves down toward the trendline. It’s not going to give you a perfect vision of the future, but it will hopefully keep you from losing too much money. As long as you’re following the trend, you’ll be reducing your risk.

4) Take Profits

A lot of traders forget to take profits. They want to “ride the trend” permanently. Don’t be one of those traders. Since the market moves in waves, exit your position before a correction occurs. You have a limited window of time to capture any profit you’ve made.

There are two ways you can go about capturing profits. First, in an uptrend, take profits at or slightly above the former price high in the current trend. When you’re going short on a stock or ETF, take profits at or slightly low the former price low.

5) Get Out When The Market Reverses

Markets don’t always follow a trend. If there is no trend, it’s time to step aside and sit on the sidelines. There’s money to be made outside of following the trend, but it’s largely a gamble. Intra-day trends can also reverse so often that no concrete direction is established. This makes it almost impossible to trade on a trend since you can’t be sure of where the market is moving. Patience is key, and it’s also the only way you’re going to make money over the long-term while day trading.

Post contributed by Liz Goldman, a freelance forex trading writer, on behalf of sunbird currency trading . All views and opinions expressed belong to the writer and do not necessarily represent Sunbird FX.


The pros and cons of debt trading that you should know

Posted by Deb | Guest Post | Sunday 20 May 2012 5:48 pm

The bonds that are issued by the US government, state government and the local corporations are known as the tradable debt securities. This form of trading is becoming increasingly common nowadays as a large number of people are changing the form of investment in order to make money. Debt security trading usually comes with huge amount of profit, if done in the proper way. You can earn a lot of amount from the changes in the interest rates and by taking a position in the distressed companies and in their distressed stocks. Debt trading proves to be a worthy alternative to commodity trading or stock market trading and if you’re not aware of the pros and cons, here are some of them.

Low margin requirements is an advantage of debt trading

Bills, notes and bonds, that are known as the treasury securities are traded in order to take advantage of the fluctuating interest rates. When the interest rates drop down, the Treasury prices rise and when the rates increase, the prices fall. Even with a low margin deposit, the traders can take a secured position in Treasury securities. The margin brokerage accounts need margin deposits of 5-10% and this will entirely depend on the maturity of the length of the bonds.

The active futures market is another advantage of debt security trading

The extremely active futures trading market will offer you trading in contracts of a wide range of debt securities. The contracts trade against the major Treasury securities, the interest rate indexes and the Federal funds rate. Futures trading will also allow the trader to take positions for moves that are in either direction of the prices of the debt securities and the associated interest rates. Futures trading of the debt securities will involve a larger amount of risk and all those traders that pick the wrong direction for their trades can lose a larger amount than what was actually invested.

You risk a large amount for a small gain and this is a disadvantage

Traders in the corporate debt securities trade high yield or junk bonds in order to make the higher interest rates on the bonds. The trader may also be able to achieve capital gains when the issuing corporation gets an upgrade in the credit rating. Another downside of the high yield bonds is a bankruptcy and the loss of the total invested principal. When the big companies like Lehman Brothers go bankrupt, their debt securities are worth pennies on the dollar.

Therefore, when you’re wondering about boosting your monthly income by investing in some asset, you should take into account the debt security trading so that you don’t have to worry about your soaring debt obligations.

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