December 28, 2007

Volatility And Day Trading

Volatility Is The Key To Day Trading
Successful Day Trading requires the ability to spot trends and patterns quickly, and act on them. It0s tough to know which Stocks to watch, but once you have learned the skill, you will be ahead of the game.
You should maintain a 0watch list0. These are a cross section of Stocks that you keep an eye on. Many Stocks have recognizable patterns, and with a little experience at watching the same group of Stocks, many traders can make educated guesses about whether the stock is about to move up or down. Most day traders, at least the successful ones, make trades from their watch list.
There are several criteria for choosing Stocks for your watch list!
Probably the most important is liquidity. I always look for Stocks that trade at least 250K shares daily. If the stock isn0t trading well, you may have trouble selling when you need to get out. If you can0t sell the stock, you0re obviously not going to make any money. I would rather trade Stocks that are moving over 1M shares a day, but certainly never less that 250K. If the stock is too thinly traded, the market makers can manipulate the […]