barbour uk outlet Different Techniques For Trading

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Submitted : 2011-06-25 19:51:51Word Count : 870Popularity: 3Tags: trading, day trading
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these are several basic strategies by which day traders attempt to make profits. Apart from these, some day traders also use contrarian (reverse) strategies (more commonly seen in computative trading) to trade specifically against foolish behavior from day traders using [url=http://www.vivid-host.com/barbour.htm]barbour uk outlet[/url] these methods.
Some of these approaches require shorting stocks as a substitute of buying them: the trader borrows shares from his broker and sell the borrowed stock, hoping that the value will fall and he will be able to purchase the shares at a lower price. There are several technical problems with short trading-the agent may not have shares to lend in a particular issue, some short sales can only be made if the stock value or bid has just risen (recognized as an "uptick"), and the dealer can call for the return of its shares at any time. Some of these restrictions don't apply to trades [url=http://www.eastscotinvest.co.uk/mulberry.html]mulberry sale[/url] of stocks that are actually shares of an exchange-traded fund (ETF).
The Securities and Exchange Commission removed this uptick rule for short sales on July 6, 2007.
Trend following
Trend following, an approach used in all trading time-frames, assumes that financial instruments which have been rising steadily will continue to rise, [url=http://www.sandvikfw.net/shopuk.php]hollister outlet sale[/url] and vice versa with falling. The trend follower purchase an instrument that has been rising, or short sells a falling one, in the assumption that the trend will continue.
Range trading, or range-bound trading, is a trading style where stocks are watched that have either been climbing off a support price or falling off a resistance price. That is, every time the stock hits a top, it falls back to the low, and vice versa. Those kind of stocks are said to be "trading in a range", which is the other side of trending. The range trader as a result buys the stock at or near the low price, and sells (and possibly short sells) at the high. A related approach to range trading is watching for moves outside of an established range, called a breakout (price moves up) or a breakdown (price [url=http://www.achbanker.com/home.php]hollister france[/url] moves down), and assume that once the range has been [url=http://www.par5club.com/louboutin.php]louboutin pas cher[/url] damaged prices will continue in that course for some time.
Scalping
Scalping was originally referred to as spread trading. Scalping is a trading method where small price gaps created by the spread are exploited. It normally involves establishing and liquidating a position in a flash, usually within minutes or even seconds.
Scalping highly liquid instruments for off-the-floor day traders involves taking quick profits while at the same time minimizing risk. It applies technical analysis concepts such as over/under-bought, support and resistance zones and also trendline, trading channel to get in the market at key points and take quick profits from small moves. The fundamental idea of scalping is to exploit [url=http://www.rtnagel.com/airjordan.php]nike air jordan pas cher[/url] the inefficiency of the market when volatility increases and the trading range gets wider.
Rebate trading
Rebate trading is an equity trading style that uses ECN rebates as a primary source of profit and revenue. Most ECNs charge commissions to customers who desire to have their orders filled immediately at the best possible prices available, but the ECNs pay commissions to buyers or sellers who "add liquidity" by placing limit orders that constitute "market-making" in a security. Rebate traders seek to make profit from these rebates and will as a rule maximize their returns by means of trading low priced, high volume stocks. This enables them to [url=http://www.bankonco.com/hollister.php]hollister france[/url] trade extra shares and contribute more liquidity with a set amount of cash, while limiting the risk that they will not be able to get out of a position in the stock.
News playing
News playing is primarily for the [url=http://www.materialistanyces.com]louboutin pas cher[/url] day trader. The basic strategy is to buy a stock that has just announced good news, or short sell on bad news. Such events creates enormous volatility in [url=http://www.davidhabchy.com]barbour outlet[/url] a stock and therefore the best chance for quick profits (or losses). Determining if news is "good" or "bad" must be determined by the price action of the stock, since the market reaction may not be in tune with the news itself. The most common cause for this is when rumors or estimates of the event (like those issued by market and industry analysts) were already circulated before the official release, and prices have already been affected in anticipation-the news is already priced in the stock.
Price action
Keeping things simple is also an effective approach in trading. There are groups [url=http://www.1855sacramento.com/woolrich.php]woolrich parka[/url] of traders familiar as "Price Action Traders" who are a form of technical traders that [url=http://www.getconversational.com]hollister pas cher[/url] rely on technical methods but do not rely on common indicators to point them in the direction of a trade or not. These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to measure whether or not they should take a trade. This is seen as a "simplistic" and "minimalist" approach to trading but is not to be understood as easier as compared with any other trading approach. It takes a sound background in understanding how markets work and the fundamental principles within a market, but the good thing about this type of methodology is it will work in [url=http://www.1855sacramento.com/peuterey.php]peuterey outlet[/url] virtually any market that exists
Different Techniques For Trading
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