Gap Openings

In the event of a gap up opening where the futures gap above fair value and stocks open higher than the prior day’s close, the rule to remember is that the 5- and 15-period moving averages need to catch up. Shorting gaps up is naturally countertrend. This sets up opportunities to place shorts off existing [...]

Intraday Traders should start out as a Scalper

Every trader needs to start off as a scalper. A scalper is a trader who expects a move from point A to point B in a relatively straight line. The scalper’s aim is to get in and out with the least amount of wiggles and noises. Scalpers will tend to actually be the most risk-averse [...]

Protecting your capital with Stop-Losses

Enter into trades only when you have established a sensible game plan, with a stop-loss exit strategy mapped out in case the trade is a loser. A stop-loss is your only insurance if the stock does not perform the way you hoped. If and when that initial stop-loss point is reached, it is crucial to [...]

Active Traders’ Mind Management

Traders need to maintain a clear focus, and that comes only with a clear head.
Learn to pace yourself. A word of caution: good times can still be dangerous. When almost every trade you put in works and your account is growing rapidly, slow down. You don’t have the Midas touch. The risk now is overtrading. [...]

Do Not Buy a Stock Because the Price is Low

Buying a stock just because the price is low is often a risky strategy. However, there are situations where a lower price can be one of the selection factors. The term “oversold” can refer to a technical condition with an individual stock, or it can refer to a situation which causes a stock to drop [...]

Never Fight The Fed

Interest rates go up, stock prices go down. Interest rates go down, stock prices go up. These are simple facts. Most stock prices tend to go to opposite direction of interest rates. Most corporations have to borrow some money; when they borrow money, they have to pay interest.The interest they must pay comes from the [...]

Taking a Loss

Taking a loss is not a pleasant task. No one likes to do it at all. If one is to be an active trader it will become necessary to take a loss from to time to time. It is inevitable that the necessity of taking a loss will face the individual trader.If the decision has [...]

Avoid Overtrading

Individuals addicted to trading are either losing money or about to begin losing money. Strategies that had been working for them will eventually work against them (part of the argument for flexibility in strategy). As the losses begin to mount, addicted individuals quit using strategy altogether and just keep on making trades, hoping for a [...]

Online Technology for Better Stock Trading

As a trader, you rely on the ability to get inbound information and send outbound messages. You must know the inside bid and ask at a very minimum. To execute an order to hit the bid or lift an offer, you must be able to send your order to your broker or place it directly [...]