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http://www.profitableinvestingtips.com/tag/timing-the-market-as-a-day-trader Timing the Market as a Day Trader Day traders can keep track of stock fundamentals just like long term investors do. Although his business is typically the short term fluctuations of a given stock timing the market as a day trader can lead to tidy profits. Timing the market as a day trader requires that the trader do fundamental analysis of the stocks that he commonly trades. In this case he is not looking for the short term profits that technical analysis offers. He is looking for the very solid gains that one gains when there is a big fundamental shift if the market for a given stock. Timing the market as a day trader can also work in trading commodities and when searching for profits among the changes in foreign currency rates. Profiting from Fundamental Shifts as a Day Trader Day traders are typically in the best position to make the most profit from big moves in the market. They are present at their trade station when the changes happen and when market inefficiency takes prices too high and too low before a price consensus evolves. For timing the market as a day trader to work the trader must do a bit of homework first. Here is where the day trader acts like a long term investor. He looks at the intrinsic value of a stock and its margin of safety. He educates himself about the market sector of the stock in question and the state of the economy. He searches for stocks that are unfairly priced, either too high or too low. Then the trader looks for cues that the market it catching on the hidden value or lack of value of the stock in question. This may come as an item in the news, a press release by the company, or the quarterly financial report of the company in question. When a trader has done his homework he is more likely to profit from the news in day trading. Market Inefficiency Is Your Friend Traders make their money when prices change. Knowing that a stock is likely to rise or fall in price in the near future is useful. Knowing how to profit from timing the market as a day trader is essential. Many traders use options in this regard. They purchase puts or calls on a stock. Puts give them the right to sell the stock at the contract price no matter how far the stock falls. Calls give them the right to buy the stock at the contract price no matter how high the stock goes up. Traders also use technical analysis tools such as Japanese candlestick signals in order to identify evolutions in market sentiment. Often times timing the market as a day trader requires a contrarian approach to day trading. The trader thinks clearly about the market and correctly identifies coming price changes no matter what the herd mentality is telling other traders. Then, when price changes are eminent he buys options, places his trades, sets his stops, and profits from timing the market as a day trader
Citation preview
TIMING THE MARKET AS A DAY TRADER
By www.ProfitableTradingTips.com
TIMING THE MARKET AS A DAY TRADER
Day traders can keep track of stock fundamentals just like long term investors do.
By www.ProfitableTradingTips.com
Although his business is typically the short term fluctuations of a given stock timing the market as a day trader can lead to tidy profits.
By www.ProfitableTradingTips.com
Timing the market as a day trader requires that the trader do fundamental analysis of the stocks that he commonly trades.
By www.ProfitableTradingTips.com
In this case he is not looking for the short term profits that technical analysis offers.
By www.ProfitableTradingTips.com
He is looking for the very solid gains that one gains when there is a big fundamental shift if the market for a given stock.
By www.ProfitableTradingTips.com
Timing the market as a day trader can also work in trading commodities and when searching for profits among the changes in foreign currency rates.
By www.ProfitableTradingTips.com
Profiting from Fundamental Shifts as a Day Trader
By www.ProfitableTradingTips.com
Day traders are typically in the best position to make the most profit from big moves in the market.
By www.ProfitableTradingTips.com
They are present at their trade station when the changes happen and when market inefficiency takes prices too high and too low before a price consensus evolves.
By www.ProfitableTradingTips.com
For timing the market as a day trader to work the trader must do a bit of homework first.
By www.ProfitableTradingTips.com
Here is where the day trader acts like a long term investor.
He looks at the intrinsic value of a stock and its margin of safety.
By www.ProfitableTradingTips.com
He educates himself about the market sector of the stock in question and the state of the economy.
By www.ProfitableTradingTips.com
He searches for stocks that are unfairly priced, either too high or too low.
By www.ProfitableTradingTips.com
Then the trader looks for cues that the market it catching on the hidden value or lack of value of the stock in question.
By www.ProfitableTradingTips.com
This may come as an item in the news, a press release by the company, or the quarterly financial report of the company in question.
By www.ProfitableTradingTips.com
When a trader has done his homework he is more likely to profit from the news in day trading.
By www.ProfitableTradingTips.com
Market Inefficiency Is Your Friend
By www.ProfitableTradingTips.com
Traders make their money when prices change.
Knowing that a stock is likely to rise or fall in price in the near future is useful.
By www.ProfitableTradingTips.com
Knowing how to profit from timing the market as a day trader is essential.
By www.ProfitableTradingTips.com
Many traders use options in this regard. They purchase puts or calls on a stock.
By www.ProfitableTradingTips.com
Puts give them the right to sell the stock at the contract price no matter how far the stock falls.
By www.ProfitableTradingTips.com
Calls give them the right to buy the stock at the contract price no matter how high the stock goes up.
By www.ProfitableTradingTips.com
Traders also use technical analysis tools such as Japanese candlestick signals in order to identify evolutions in market sentiment.
By www.ProfitableTradingTips.com
Often times timing the market as a day trader requires a contrarian approach to day trading.
By www.ProfitableTradingTips.com
The trader thinks clearly about the market and correctly identifies coming price changes no matter what the herd mentality is telling other traders.
By www.ProfitableTradingTips.com
Then, when price changes are eminent he buys options, places his trades, sets his stops, and profits from timing the market as a day trader.
By www.ProfitableTradingTips.com
For more insights and useful information regarding stock, options, commodities, and futures trading visit
www.ProfitableTradingTips.com