Wondering how much to invest in stocks? When you read a number of articles on the web, you will notice the answers you find are somewhat convoluted What are trade alerts? Trade alerts provide the active trader or investor an alert when a specific event occurs. Trading alerts are a basic componen Day trading or swing trading that is the question. If you are an active trader, day trading and swing trading will feel like second cousins.
How many of you have heard of a live day trading room? Have you ever been in one before? I have subscribed to approximately 3 trading rooms over my It took close to 19 months for me to realize that I made the majority of my gains between 9: I spent countless hours trying all t Trading with margin is the basic idea that you are trading with more cash than you have on hand.
The key with margin is learning to manage your risk e In this article, I will cover two basic trading strategies you can utilize during the market open. In this article, we will cover one of the most popular oscillators — the relative strength index RSI. You have probably read a number of general Day Trading Game Day Trading is by far the hardest form of trading. This is due to the speed at which a trader must make decisions. In day trading, t It will be important to understand a few key elements before we dive into the specific strategies; such as volume, volatility, and risk tolerance.
A picture is worth a thousand words and nothing will wake you up quite like a morning gap! The gap has the amazing ability of taking the breath rig Taking Profits - Definition When you start out in the trading game, you often will hear a number of pearls of wisdom.
Keep your losses small, let your Think of your account as if it were a boat. Now think of liquidity as being a stream. When day trading, you need to make sure that your boat can alway There are a number of day trading styles that make money in the market. This article provides an overview of multiple day trading strategies that pr In this article, we will explore the topic of trading multiple time frames and how not to overwhelm yourself in this multi-dimensional view.
Ask a traders if they can send you a copy of their trading plan and I guarantee you it will be the highest rejection level event of your life. A day trading journal is the only part of your trading arsenal required to succeed at active trading. Your journal contains each trading transaction Momentum Trading Momentum traders are truly a unique group of individuals.
Unlike other traders or analysts who dissect a company's financial stateme We have discussed numerous trading strategies on the Tradingsim blog. From the very basic, to the ultra-complicated. Today we are going to cover on Understanding Specific Time Zones during the Trading Day Having a successful trading career not only depends on the trading system or style that you u The 5 minute bar illustrates the summary of a stock's activity for every 5 minute period within the trading session.
The stock market is open for 6. Day traders are commonly trading 5 minute charts to identify short term trends which allows them to stay on top of their.
The close on the 5-minute bar gives insight into the immediate market direction of trend for a stock. When a stock closes at the low or high of the 5-minute bar, there is often a short-term breather where the stock will go in the opposite direction. The psychology behind this is that the stock has been pushed to an extreme as other active traders chase the price trend.
This breather can mark a major reversal, but in the majority of cases, it creates the environment for a. I have not performed any exhaustive scientific study as I am a trader, but I would dare to say the 5-minute chart is the most popular timeframe for day traders. It's that fine wine where call it the universe, or just human psychology, most traders feel comfortable within this time unit of measure.
In this article, I will cover a number of general topics and strategies that you can use to help you when trading on a 5-minute timeframe. By the shear definition of a 5-minute timeframe, the strategies and topics covered in this article will focus on the art of day trading. In the morning stocks will trend hard for the first minutes into the 10am reversal time zone. Day traders that are looking to go opposite to the trend can wait for a close at the high or low of the 5 minute bar to go opposite to the morning move.
The below chart is from a morning reversal for the stock AUY, where the stock closed at the high of its bar and then had a sharp reversal. This caused a reversal back down to the morning lows. Yet, oscillators give many fake signals. Since they are leading indicators, they point out that a trend might emerge.
Thus, oscillators are one of the most attractive tools for day traders as timing is of the essence. Nevertheless, if not used properly, they often lead to failure. Therefore, I recommend combining two oscillators when trading on a 5-minute timeframe in order to validate trade signals. Personally, I like oscillators only for trade entry and not trade management.
Therefore, I recommend you include a fast line on your chart in order to attain exit points on 5-minute stock charts. In this section we will cover 3 simple strategies you can use with 5-minute charts.
This simple strategy uses a three-pronged approach across two oscillators and an on-chart moving average indicator. Trade entry signals are generated when the stochastic oscillator and relative strength index provide confirming signals. You should exit the trade once the price closes beyond the TEMA in the opposite direction of the primary trend.
There are many cases when candles are move partially beyond the TEMA line. We disregard such exit points and we exit the market when the price fully breaks the TEMA. Have a look at the example below:. This is the 5-minute chart of General Motors for Sep 9 — 10, The TEMA is the green curved line on the chart.
The green pairs of circles are the moments, when we get both entry signals. First, we spot overbought signals from the RSI and the stochastic and we enter the trade when the stochastic lines have a bearish crossover. We go short and we follow the bearish activity for 15 full periods, which is relatively a long period of time for a day trader.
We exit the trade once the price closes above the TEMA. Thus, we stay out of the market until the next RSI signal. Our second trade comes when the RSI enters the oversold area just for a moment. This long signal is confirmed by the stochastic, so we go long. The bullish move that ensued is minor, but still in our favor! We hold this trade for 9 periods before closing the position. We exit the market when a bigger bearish candle closes below the TEMA with its full body. We hold the long position open for 14 periods before one of the bearish candles on the way up close below the TEMA.
Notice that in this stock trading setup we have no on-chart trading indicator for identifying exit points. The reason for this is that the MACD does a pretty good job of this itself. We will simply exit the market whenever the MACD has a crossover in the opposite direction! Notice that when using the MACD for exit points, you stay in the market for a longer period of time.
This is the 5-minute chart of McDonalds for Sep 30, The green circles indicate the entry signals we receive from the two indicators. The red circles indicate the moment when the MACD tells us to get out of the market. Notice that in this example, the exit point of a position is the entry point of the next one. Thus, the red and the green circles match in three cases. This is what we are waiting for and we short McDonalds. Although there is strong hesitation in the price movement, no exit signal is provided from the MACD and we hold our position.
Later on, the price moves in our favor and we close the trade when the MACD has a bullish crossover. As we said, in this strategy example, we often open a contrary position right after closing the trade. We stay in the market for 36 periods until the MACD gives us a bearish crossover. McDonalds starts to move in our favor, but the direction changes rapidly. Yet, the two lines of the MACD interact, but they do not create a crossover.
Thus, we hold our short position for 39 periods.More...