When you enter into a trade early on in the day and the market keeps on moving in your favor, should you hold that trade overnight? What about over Saturday and Sunday? Naturally, these questions should only apply to money making trades. Accepting a loss overnight is the playground for losers.
A beginner should close his day-trades by the close of the day, but a wise professional has got the choice of keeping them overnight. When a market closes within a few ticks of the day’s high, it typically goes past it the next morning. A market that finishes on its lows commonly taunts with lower lows the next day.
Today nothing is assured, as the market could end near its high, get smashed with awful news overnight, and open sharply lower. This is why just veteran day traders have the choice of keeping their trades overnight.
Research, knowledge, and discipline place your trades on a more nerveless, more intellectual basis. You must explore the past, calculate the odds, and arrive at informed decisions for the future. When you day trade, there are dozens of minutes when the market goes nowhere, allowing you to estimate the totals.
Some traders use two monitors where one monitor is the stock trading platform and the other monitor is used for research.
Acquire one year’s history for the market you are day-trading. Throw it into a spreadsheet and begin asking questions. When the market closes just five ticks from its daily high, how many times did it reach a new high the next day? How far did it run the next day? What about the days when that market closed within 5 ticks of the lows? How much did it fall the next trading day?
Once you get the answers, figure out what happened when the market closed with ten ticks of the high and ten ticks of the low.
Professionals are inclined to trade in the same market month after month, even when there is a lot of turnover of amateur traders. Pros have become accustomed to trading a certain method, and to trade with them you must identify those patterns and identify them on a stock chart.
You want to establish your trades on facts and probabilities, not on bowel feeling and hope. You need to do your own analysis. You can’t purchase the solutions, because only determining them yourself will give you the confidence to trade.
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