Topic. 7: International stock exchange associations

2. Using Day-trading in stock markets.

Day trading – the act of buying and selling a financial instrument within the same day.

During the day, the player closely tracks the rise and fall in elected securities purchases and sells them, trying to cash in on exchange rate fluctuations. At the end of the trading session, a player sells all the securities the next day to start again.

The term of one trading session due to the fact that while the trader is to exchange it, following the situation, the devaluation of existing securities it will always be able to immediately get rid of them.

In this way it will reduce their losses to a minimum. If the securities remain in the Trader after the close of trading, there is the risk of a significant reduction in their rate of discovery to the next exchange.

Thus, the trader losses grow, and he will not be able to stop them getting rid of unprofitable securities.

The signal to close the position may be a situation where the difference between the minimum or maximum and current price during the session is the average amplitude of the instrument.

Usually this is typical for day extremum and prices likely will dramatically change.

Day Trading Tips You Need to Know:

1) Knowledge is Power

Not just knowledge of basic trading procedures, but of the latest stock market news and events that affect stocks – the Fed's plans for interest rates, the economic outlook, etc. Do your homework; make a wish list of stocks you'd like to trade, keep yourself informed about the selected companies and general markets, scan a business newspaper and visit reliable financial websites on a regular basis.

2) Set an Amount Aside

Assess how much capital you're willing to risk on each trade (most successful day traders risk less than 1-2% of their account per trade). Set aside a surplus amount of funds that you can trade with and are prepared to lose (which may not happen) while keeping money for your basic living, expenses, etc.

3) Set Aside Time, Too

Day trading requires your time – most of your day, in fact. Don’t consider it as an option if you have limited hours to spare. The process requires a trader to track the markets and spot opportunities, which can arise any time during the trading hours. Moving fast is key.

4) Start Small

As a beginner, it is advisable to focus on a maximum of one to two stocks during a day trading session. With just a few stocks, tracking and finding opportunities is easier.

5) Avoid Penny Stocks

Of course, you're looking for deals and low prices. But keep away from penny stocks. These stocks are highly illiquid and chances of hitting a jackpot are often bleak.

6) Time Those Trades

Many orders placed by investors and traders begin to execute as soon as the markets open in the morning, contributing to price volatility. A seasoned player may be able to recognize patterns and pick appropriately to make profits. But as a newbie, it is better to just read the market without making any moves for the first 15-20 minutes. The middle hours are usually less volatile while the movement begins to pick up towards the closing bell. Though the rush hours offer opportunities, it’s safer for beginners to avoid them at first.

7) Cut Losses with Limit Orders

Decide what type of orders you will use to enter and exit trades. Will you use market orders or limit orders? When you place a market order, it is executed at the best price available at the time; thus, no “price guarantee.” A limit order, meanwhile, does guarantee the price, but not the execution. Limit orders help you trade with more precision wherein you set your price (not unrealistic but executable) for buying as well as selling.

8) Be Realistic About Profits

A strategy doesn't need to win all the time to be profitable. Many traders only win 50% to 60% of their trades. The point is, they make more on their winners than they lose on their losers. Make sure that the risk on each trade is limited to a specific percentage of the account, and that entry and exit methods are clearly defined and written down.

9) Stay Cool…

There are times when the stock markets test your nerves. As a day trader you need to learn to keep greed, hope and fear at bay. Decisions should be governed by logic and not emotion.

10) …And Stick to The Plan

Successful traders have to move fast – but they don't have to think fast.

Previously, we mentioned three tools for determining entry points – that is, deciding the opportune moment you're going to buy a stock (or whatever asset you're trading). The most technical are intraday candlestick charts. We'll focus on these factors: