Traders Guide to Trading eMinis for Profit
With the technology boom that has changed the way business is done across the globe, one unintended result has been the rise of day trading. Day trading is a risky and stressful form of trading that involved buying stock and selling it within one days time. It’s thought that if this is done enough time, with the right foresight and financial advice, that a person can make quite a lot of money each day. Day trading wasn’t even an option before the 1990’s. Here’s why.
Back before the computer age allowed instant stock buying and selling, the financial settlement period use to take much, much longer. It was possible to buy a stock, and not have to pay for it for another 10 business days. It was common practice in those days to try to sell the stock for more than it was worth before you had to pay for it in an attempt to make a profit. Many traders who had no actual money of their own would make their livings this way, and it’s obvious how dangerous this was.
A day trader has many different strategic options that he or she can follow to try to make a profit. The first is trend following. This is a tool that is used by all investors and its simply the idea that stocks that have been going up will continue to go up and stocks that have been going down will continue to go down. Obviously, this isn’t always the case, which makes trend following a dangerous method to base all of your day trading investments on.
Range trading is another tool used by day traders. This is the practice of buying and selling stocks once they reach their respective highs and lows. The trader figures that a stock that is headed up will continue to go up, but only until it reaches a new high, and then it’s due to go back down. The same is thought for stocks headed the other way. Once they reach a brand new low, they tend to rebound and head back up.
Playing news is another common tool of the day trader. The technique is exactly what it sounds like, buying stock that has just released good news and selling stock that has just released bad news.
While none of these techniques are guaranteed, day trading is increasing in popularity every year, and while the potential for significant loss is very real, many continue to walk the tightrope that is day trading.
A Stock Market Micro Intra day Crash Shows Us Where Safe Havens Are
WOW…. Now that was an exciting day in the market!!
This day will be talked about for years to come and the individual who hit the wrong button (“B” for billion instead of “M” for million) to sell billions instead of millions will have a tough time finding another job… Maybe this person can do commercials for Microsoft Windows showing how one simple key stroke can crash a system… lol
On a more serious note, a member in the chat room had a good point… Who would create a program that can not only bankrupt the company in one key stroke but also crash the entire broad market in 10 minutes losing millions of investor’s hard earned money??
I will keep this short with my Cole Notes Version on a few opinions of mine.
Banks – Good for taking your money and crashing the markets
All we have heard about in the past year is bank this, and bank that… They take our money, bet on crazy investments, lose it, then get free money from the Feds to replace that lost money and they keep it for them selves…
Well today the market crashed because of a bank which should not be a surprise after everything else they have messed up. But to add more to the fire I had a lot of subscribers and followers today tell me they tried to trade with their brokers and they could not get orders to be executed. When I asked these individuals who they are using I got the same response. They were trading through a bank… This really makes my upset as I hate watching the bad guys (banks) keep winning/taking everyone’s money.
Stock Market Circuit Breakers Failed
I find it amazing how the financial system has circuit breakers to protect investors from a market crash yet today they did not get triggered…
Rule is (and dumb one in my opinion) is that a circuit breaker (halts trading on the stock market for a set period of time) can only be triggered before 2:30pm ET. Funny thing is that the crash happened 7 minutes after 2:30. Manipulation???
2-3 Week Market Correction, Corrected in One Day
A pullback in the broad market which normally would have taken a few weeks at the most happened in one afternoon which is amazing really. Don’t get me wrong, I thought what happen today was very interesting, profitable and a lot of fun. But a move this drastic does throw a wrench into everyone technical analysis and it will be a few days before we get enough price action to start piecing this market back together for what looks most likely to unfold in the coming days and weeks.
Gold & US Dollar Rally Together
The past 2 weeks we have seen gold and the dollar move up together. This is very strong for gold. Even if we see the dollar roll over and head south that would help boost the price of gold. The short term charts for gold are looking tired be sure to watch the video below.
End of Week May 7 Trading Conclusion:
This week was a crazy one with gold and the dollar moving higher together and the stock market crashing over 9% in one day…
It will take a few days for all this extreme price action to smooth out as we try and grasp if this is a bottom or the beginning of a major meltdown.
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