Intraday Trading Strategies

A pattern day trader, under the definition of the United States Securities and Exchange Commission, is a trader who executes at least four day trades within five business days. But, most importantly, there are some other terms that are used by intraday traders that need to be understood before venturing into such trades. These are also derivatives in intraday trading. It is also considered as ceiling because these price levels prevent the stock from moving the price upward.

You will run a high risk of being whipsawed out of the range and making a loss even if you pick the direction correctly on your trade. The main advantage of day trading is that one's stock positions are not held beyond the current trading day. Intraday trading is riskier than investing in the regular stock market.

Liquidity is important to a day trader's stock market trading strategy because it provides assurances that the investor will be allowed to acquire and unload a stock at an excellent price. Conclusively, day trading can be made profitable by following these steps.

The same holds true for stock traders - feel the market sentiment by waiting for the first 1-hour candle of the stock you want to trade. Where a longer-term trader might well be perfectly happy with daily closing prices, an intraday trader will find it very difficult to live intraday trading trade without live prices.

Thus, the contrarian trader sells the stock which has been rising and buys the falling one, expecting that the trend will change. This means they do not carry the same amount of risk as other types of traders who are exposed when the market opens at a different level from the previous day's close.