day trading

Discretionary Day Trading

T his approach is good if the trader has good decision-making skills.  With timely, well-informed decisions and well-considered actions, a trader can enhance the day trading setups leading to brilliant and well-deserved profitable trades.  If not, the trader risks failure leading to losses and a brutally short trading career.

The following brief descriptions may help you determine which style is best for you.

Trading Style

Position TradeInitiated to be an intermediate to long-term trading position based on a weekly or monthly timeframe; has a potential time horizon as short as a few weeks to as long as several monthly or more.
Swing TradeInitiated to be a short to intermediate-term trade, typically based on a daily timeframe that has the objective of capturing market swings lasting between 2 to 5+ days.
Day TradeInitiated with the intent of closing the position entirely by day's end (e.g., not held overnight).
Scalp TradeInitiated to capture small to modest-sized profits, based on smaller intra-day timeframe such as a 1, 2-minute or 5-minute timeframe or on Level 2 direct access activity.

Automated Systems Trading

The key to this day trading approach is that the trader must have the discipline to trade EXACTLY as the system was built.  Most automated trading platforms have at least four (4) major components:

SignalsEvents that trigger market entry and exits.
SystemsSignals combined into a suite to form a strategy for trade entry, trade management, and trade exit.
Test TradingLevel of capability to back test the rules and criteria and formulate historical results.
Live TradingAbility to run in real-time with live market data and execute real-time trades.

 

 

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