The Best Day Trading Strategies For Beginners

Day trading, as you probably know already, refers to the act of buying and selling a security within the same day. Day traders generate (or at least attempt to generate) profits through leveraging large amounts of capital, taking advantage of fluctuations in highly volatile stocks or indexes. While trading securities on a day to day basis can be very profitable, it can also wind up being one big waste of money for those who are inexperienced, or enter without much in the way of a strategy. To help you get the best start, here are some of the best day trading strategies for beginners…

Scalping

Scalping is one of the more popular strategies, and involves selling a stock or index pretty much immediately after it becomes profitable. After looking through some historical data and asking yourself ‘what are best penny stocks I should buy today?’ as usual, you can purchase a given security, and then set yourself a price target that’s just after the point where it becomes profitable.

Fading

The tactic of fading involves shorting stocks (betting on their decline) after they’ve shown a rapid leap upwards. The act of fading is generally based on the assumption that the stock is overbought, the early buyers are going to be looking to take profits soon, and that there’s a chance any existing buyers will be scared off the stock soon. Fading can be very risky, especially for inexperienced traders, so it’s not recommended that you try to make money from fading until you’re a little more familiar with your choice of trading platform. Having said that, this strategy can turn out to be extremely profitable. When fading, the price target should always be around the point where buyers start to re-enter.

Pivots

A daily pivot involves drawing profits from a stock’s daily fluctuations. This is performed through attempting to buy stocks at the low end of the day, and selling on the high end. When it comes to pivoting, the price target should simply be the next sign of a reversal, which can be determined using the same patterns as in fading and scalping. Because of the sweeping ups and downs that you have to look for with pivots, this can be one of the more accessible day trading strategies for complete novices.

Momentum

Finally, we have momentum. This day trading strategy is all about trading based on releases from market news sources, or pinning down strong trends supported by high volumes of shifts. The most common kind of momentum trader will buy based on a news release, and then ride that trend until it shows signs that it may turn back on itself. Other momentum traders will fade the upward surge in price, instead. In momentum trading, the price target should be the point where volume starts to decrease, and bearish candles start to appear more and more.

There you have some of the most accessible and recommended day trading strategies for beginners. Read a little more into one that suits you, and then jump right in!