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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Day Trading in a Bull Market

Day Trading in a Bull Market

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1Day Trading in a Bull Market Empty Day Trading in a Bull Market Thu Jan 12, 2012 11:02 pm

dindon1

dindon1
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Day Trading in a Bull Market
Swing trading is a term we use to describe a position trade which may last any where from several days to several weeks or even as long as a three months or more. In Day Trading we normally close out all positions on an intraday basis. This type of trading will often reduces the risk of holding a stock over night. However in a bull market is it really wise to close out your positions for no other reason other than the trading day is coming to an end

Sometimes day trading can reduce your overall profits in the stock market when the markets are running up in Bull market mode. This begs the question In a Bull market why day trade at all If stocks are running they will likely gap up each morning and if you close your positions each day you cannot profit from these gaps. Instead you will have to pay up each day to join the party. Often times day traders find themselves baby sitting cash while looking for favorable trades to place all the while they are missing the markets morning move up. While day trading is not a bad idea it can sometimes reduce your overall profits during a full fledge bull market run. Day trading has its place in a flat or range bound market but I tend to do a lot less day trading in Bull markets and more swing trading because I do not mind holding stocks overnight when the markets are in great technical shape.

If you keep an open mind about the market certainly it can be seen that there are times when holding a position for longer than a single day can be beneficial to your bottom line. Many times for example we take up a position and hold a stock for several days if not longer. Often times longer duration trades can turn out far more profitable than trying to day trade that same stock each day if the swing trade is executed and managed correctly.

Swing and Sing
With this said it should be noted that we are not prescribing a buy hold and hope mentality. If anything you need to be on your toes just as much with swing trading as with day trading. Profit taking and risk management needs to happen with just as much speed in positions held for multiple days as with trades made on an intraday basis. The only significant difference is that while managing the trade you also work to keep an open mind regarding the upside potential of the trade over an extended period of time. When swing trading try not to be so quick to take profits and move on to the next trade. Having patience while protecting profits with a trailing stop loss can result in spectacular swing trading gains in a bull market.

The basic idea of swing trading is that you want to attempt a trade in a stock which you feel may have additional upside if held longer than a day. Typically these would be slightly lower risk stocks which have basically more reliable or predictable longer term charts behind them. This is in contrast to day trading where we do not care about the risk of holding a stock over night because we are only interested in the stocks momentum for that particular day.

Regardless of how you actually go about managing positions which are held longer than a single day or whether you even combine swing trading with your day trading at all the basic idea here is to at least consider holding at least some stocks as swing trades when the potential upside and benefits of being long a Bull market may outweigh the risks of having open positions overnight.
Source : http://www.stocktradershq.com/articles/c126.htm



Last edited by dindon1 on Fri Jan 13, 2012 8:26 am; edited 2 times in total (Reason for editing : source mentioned)

2Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Fri Jan 13, 2012 12:34 am

Roboticfx

Roboticfx
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I would like to add more information in simple language for the use of our members. I really appreciate your post dindon and it's very useful even for experts in stock trading and specially in day trading.

1.In day trading investor should have a targeted profit before purchase a share and he should have ability to satisfy with this profit that he going to get.

2.Choose a highly trading share which doesn't have a very large share quantity for a one price level shown in order book. Selecting one which is lower than 150 rupees is much better.

3.MACD and RSI are the most suitable chart types for any investor in any stage because they are easy to understand. Learn about them by referring to the websites about technical charts or asking from a person who are still using them. You can ask from your investment adviser also.

4.First get a list highly trading shares using your trading web site or the software like directFN. Then open the MACD and RSI charts of the suitable shares which you decided.

5.You can wish your adviser's help because you can get know about good shares which are not in the list.

6.Keep your eye on that share and try to understand its trading pattern. Then enter it at the correct time by putting a day order.

7.Keep watching it along until it meets the targeted price which you have decided to exit. Keep one eye on the MACD chart also.

8.When the targeted price came, dump you all shares immediately without thinking twice. The price can reach higher but don't wait any more. Greediness can destroy your all expectations in few minutes.

9.Now you have finished it. Don't try to enter it again. You can relax yourself and happy about your effort and the profit that you gained today even it's very small.

10.Write down the share details in a book including the entered time, exited time, profit, MACD and RSI values, profit, percentage etc. It will very helpful for you in the future!

That's all!

Thank You!

Very Happy Very Happy Very Happy

3Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Fri Jan 13, 2012 6:55 am

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Make sure u mention the original source.. dont try to impress ppl Wink

Thanks for sharing..

4Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Fri Jan 13, 2012 6:59 am

market bull

market bull
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Thank you for sharing

5Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Fri Jan 13, 2012 8:16 am

dindon1

dindon1
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@smallville wrote:Make sure u mention the original source.. dont try to impress ppl Wink

Thanks for sharing..
sorry!!
never wanted to impress people who I have never seen.,,



Last edited by dindon1 on Fri Jan 13, 2012 8:24 am; edited 1 time in total

6Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Fri Jan 13, 2012 8:16 am

Rajaraam


Vice President - Equity Analytics
Vice President - Equity Analytics
This thread would also be useful.

http://forum.srilankaequity.com/t14910-simple-tool-for-simple-traders-to-earn-simply-profits#96864

7Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Sat Jan 14, 2012 10:43 am

Light of Hope


Vice President - Equity Analytics
Vice President - Equity Analytics
thanks Roboticfx, a practical system suited for CSE

8Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Sat Jan 14, 2012 11:59 am

mra

mra
Manager - Equity Analytics
Manager - Equity Analytics
lts always better if you could monitor Parabolic SAR in conjunction with MACD and RSI

9Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Sun Jan 15, 2012 1:40 pm

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Thanks Dindon1 and Robiticfx for sharing valuable info.
Keep it up.

10Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Sun Jan 15, 2012 11:29 pm

Roboticfx

Roboticfx
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@mra wrote:lts always better if you could monitor Parabolic SAR in conjunction with MACD and RSI

Yea! Very Happy

11Day Trading in a Bull Market Empty Re: Day Trading in a Bull Market Mon Jan 16, 2012 8:24 pm

chanvi


Equity Analytic
Equity Analytic
Thanks dindon and robo it is useful

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