Chapter 7

Strategies for Day Traders

First published: 02 January 2012

Summary

As a day trader, one's biggest pet peeve is holding trading positions overnight. One is more concerned with finishing the day without an open position than the actual result of the trade itself. Most day trading strategies involve a combination of both technical and fundamental analysis. For technical analysis, chart patterns, candlestick patterns, and indicators are important considerations. For fundamental analysis, trading important news, such as non-farm payrolls (NFP) and interest rates, is the focus. This chapter discusses four strategies. The first two—fade the break and trade the break—are centered on technical analysis. The next two—gawk the talk and balk the talk—are centered on fundamental analysis, or news trading. All strategies are developed using the 15-minute (M15) time frame and the 30-minute (M30) time frame. The biggest reason why these time frames are most suited for day traders is because the positions are most likely to exit in a day.

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