Top 4 Day Trading Strategies
There will often be different ideas about when to trade, how often and how long to hold your positions for. All these questions form the foundation of the four most famous trading styles that most traders follow - position trading, swing trading, day trading & scalping.
Looking closely in Day Trading, since it has grown in popularity among the trading community, we will be looking into the top 4 strategies that Day Traders often follow:
1. Following the trend
Traders that follow the trend tend to buy when prices are rising and sell when they drop. They simply assume that prices that have been rising or dropping steadily over a period of time, will continue to follow the same pattern.
2. Contrarian investing
When following this strategy, traders assume that the rise in prices will reverse and finally drop. Contrarians buy when prices are falling and short-sell when prices are rising, with the expectation that this trend will change.
This strategy involves entering and exiting a position super-quickly, usually within minutes or even seconds. Traders chase the small price gaps that are being created by the bid/ask spread.
4. News trading
Traders following this strategy will open a buy position when good news is announced, and will sell when there's bad news involving a market. The news fluctuations lead to higher volatility, which can lead to higher profits or losses.
Day trading is not that easy to master. It takes time and requires a lot of time, skills and discipline on the traders' behalf. With enough practice and by constantly evaluating your strategies, you have some good chances of beating the odds!
Info Source: https://bit.ly/2v4gpgs
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