Online Share Trading

Are you one of those people who are just buying and selling stocks with no real plan? When I first started I was totally clueless and traded with no real plan, no real tactic and no real goal in mind. Needless to say I lost fortune but the good thing that came out of it is that it brought me to my senses, Without good day trading strategies you are probably better off leaving your money in a high interest bank account because you will lose it.

Strategies are important. Whether its in sport, in business or in the world of day trading. We a need a strategy because it gives us a method and structure that guides our decisions and our actions towards a specific goal. You can think of a strategy as a set of rules and these rules will help you make decisions.

What makes day trading strategies all the more important is the fact that we need to make decisions very quickly and if you allow your mind to run its usual decision making process then you will probably always react out of fear – and make the wrong decisions.

Trading strategies are not complicated – although they can be. For day trading I suggest you keep is stupid simple. The more complex is gets the more likely you are to get caught up in the process and not the outcome – which is what really matters. Many highly successful day traders use basic chart patterns.

Chart patterns are a great way to trade because it gives you a visual guide. Whether you are looking at channeling patterns or head and shoulder patterns, they are relatively easy to identify. It’s a classic way to do day trading because it allows you to “ride the wave” and capitalize on the 50 to 70% movement of stocks in either an upward or downward direction.

Another thing I love about simple chart patterns is the fact that you can often profit multiple times from the same stock. You can buy and sell when its in an uptrend and then short sell it when its a in a down trend. More stable stocks tend to have very predictable patterns and allows you to trade them all day long and shaving of small and consistent profits all day long.

More complex day trading strategies include trading with Candlestick chart which has its own unique set of rules and indicators that can be very effective for day trading. It allows you to see very specific buy and sell signals that you cannot see with normal line charts.

If line charts are more your thing and you want to get a bit more sophisticated then you can look into trading strategies like Moving Average Cross-overs. This is a very popular strategy and basically overlays 2 moving averages. The way these two moving averages interact will then give you buy or sell signals and it can be very effective but its definitely a more advanced strategy.
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