Day Trading Strategies
Day traders utilise a variety of day trading strategies to stay one step ahead of the competition. We cover these strategies in our day trading courses, and you can find a brief introduction to each one below. These strategies are important to master. While they won’t guarantee your success 100% of the time, they will greatly improve the odds in your favour. Remember that all you need to greatly increase your chances of success is adequate market knowledge and a solid trading plan.
The following strategies are:
- Range Trading
- News-Based Trading
- High-Frequency Trading (HFT)
- Limit Orders
The first strategy taught by our Foundation and Pro courses is known as Scalping. You’ve likely heard this word before, particularly if you’ve ever purchased tickets. In the world of trading, Scalping refers to profiting from small price changes and reselling quickly. Traders must have a solid exit strategy in mind. Even a sizeable loss could wipe out the many small gains made by the trader, so there’s a lot of risk involved.
The next strategy taught by G7FX is Range Trading. Range Trading is a process in which an established range materialises when a security trades between consistent low and high prices for a set amount of time. Price resistance is usually provided by the top of a security’s trading range. Conversely, price support is offered by the bottom of the trading range. The full details of this strategy are covered in our courses.
Also known as trading the news is a technique used to trade currencies, equities, and other instruments on the financial markets. Such reports often spur strong short-term market shifts, creating opportunities for traders. A company’s market share can move wildly, affected by factors such as changes in management, merger rumours, and announcements of corporate profits. News-Based Trading can often serve as a vital tool for savvy financial investors.
High-Frequency Trading (HFT)
High-Frequency Trading (HFT) is a process that leverages the use of powerful, sophisticated computer programmes to transact a sizeable number of orders. This can be done in fractions of a second, making it very useful for large-scale day trading. Multiple markets can be analysed quickly, and orders executed based on the conditions of these markets. More information on High-Frequency Trading can be obtained through our courses.
Limit Orders are orders made to purchase and sell a stock at a specific price or higher. To implement a buy limit order, it must be equal to or lower than the limit price. To implement a sell limit order, it must be equal to or higher than the limit price. Limit Orders are not guaranteed to be executed and can only be filled if a stock’s market price hits the limit price. One upside of Limit Orders is that they guarantee that an investor doesn’t pay more than a pre-determined price for a stock.