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What are the stratagies used in Day Trading?

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Despite the seemingly flippant and knee-jerk reaction methodology of Day Trading, there are three strategies that Day Traders us to Day Trade in the hopes of achieving a noticeable profit.

First, there is trend following, which is commonly utilized in all areas of trading methodologies and strategies. Trend Following commonly presupposes that a stock that has been on the rise will continue to rise. Also, if a trend has been falling it will continue to fall. Therefore, the purchase of a stock that has been rising is expected to steadily rise and keep rising which can then be sold for a higher price, though this does not always occur.

Second, there is News Trading, which is typically utilized only by a Day Trader. The basic concept is to purchase a stock which has just experienced great news, such as a sharp increase, and to quickly sell on any and all bad news reported on a stock. It is these good and bad news reports and the subsequent, volatile status of the stock that can account and therefore provide the best opportunity for a Day Trader to achieve the fastest, steepest profits or the fastest, worst losses.

Third, there is Technical Analysis, which is the evaluation of stocks and stock related items (options, bonds, currencies, etc.) through the detailed use of analyzing the reports and statistics that the markets oscillations create, via summaries of the stock�s history of pricing and amount.

Technical analysts are primarily focused on the future activity a stock can have instead of what activity and worth the stock currently maintains. Thus, Technical Analysis is the belief that the past movements of a stock within the market and the movements of the market itself forecast the stock�s future performance.

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