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
2. Day traders can keep track of
stock fundamentals just like
long term investors do.
By
www.ProfitableTradingTips.co
3. 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.co
4. Timing the market as a day
trader requires that the trader
do fundamental analysis of the
stocks that he commonly trades.
By
www.ProfitableTradingTips.co
5. In this case he is not looking for the
short term profits that technical
analysis offers.
By
www.ProfitableTradingTips.co
6. 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.co
7. 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.co
9. Day traders are typically in the
best position to make the most
profit from big moves in the
market.
By
www.ProfitableTradingTips.co
10. 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.co
11. For timing the market as a day
trader to work the trader must
do a bit of homework first.
By
www.ProfitableTradingTips.co
12. 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.co
13. He educates himself about the
market sector of the stock in
question and the state of the
economy.
By
www.ProfitableTradingTips.co
14. He searches for stocks that are
unfairly priced, either too high or
too low.
By
www.ProfitableTradingTips.co
15. 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.co
16. 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.co
17. When a trader has done his
homework he is more likely to
profit from the news in day
trading.
By
www.ProfitableTradingTips.co
19. 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.co
20. Knowing how to profit from
timing the market as a day
trader is essential.
By
www.ProfitableTradingTips.co
21. Many traders use options in this
regard.
They purchase puts or calls on
a stock.
By
www.ProfitableTradingTips.co
22. Puts give them the right to sell
the stock at the contract price
no matter how far the stock
falls.
By
www.ProfitableTradingTips.co
23. Calls give them the right to buy
the stock at the contract price
no matter how high the stock
goes up.
By
www.ProfitableTradingTips.co
24. Traders also use technical
analysis tools such as Japanese
candlestick signals in order to
identify evolutions in market
sentiment.
By
www.ProfitableTradingTips.co
25. Often times timing the market
as a day trader requires a
contrarian approach to day
trading.
By
www.ProfitableTradingTips.co
26. 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.co
27. 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.co
28. For more insights and useful
information regarding
stock, options, commodities, an
d futures trading visit
www.ProfitableTradingTips.com
