There is a natural desire, especially by beginning traders, to want to trade excessively. This is not difficult to understand. A day trader cannot make money unless he or she is in a trade; this is the general outlook of most novice day traders. But this line of thinking has some serious faults, and it is important to learn to select your trades in a systematic and emotion free state of mind.

Of course, selecting high-quality trades is easier said than done. At various times, very unproductive trades form set up patterns that can be very enticing. Low probability trades are like the lure of Medusa, they look great at first glance, but can cause serious losses if systematic analysis of the trade is not undertaken.

How do you know the difference between a high probability trade and a low probability trade?

First and foremost, every day trader must make an assessment of whether the trade is with the trend or against the trend. While many popular courses on trading tout the wisdom of trading retracements and identifying peaks and troughs in trading patterns, these are all unsound trading methodologies and I know of few successful day traders who employ them. Great traders are masters at taking what the market offers, and not trying to create trading opportunities themselves. A novice trader’s ability to effectively identify trending patterns is an essential skill because the very best traders trade primarily with the trend. In my view, less than 10% of your trades should be countertrend trades.

Secondly, many novice day traders and a plethora of trading systems rely heavily upon oscillators and indicators to choose potential trades. On the other hand, most seasoned day traders pay close attention to actual price action when trading. Important principles like support and resistance are prime movers in determining whether a trade has real potential. For example, taking a short trade into a known support is the recipe for a losing trade. Obviously, a successful day trader must have the ability and experience to identify known areas of support and resistance to avoid taking trades into these hazardous trading zones. Most experienced traders can spot support and resistance by glancing at a chart; this skill is learned through observing thousands of charts throughout trader’s career. Of course, there are add-on programs to most charting platforms that can spot support and resistance for a day trader who has not acquired the ability to identify support and resistance on his or her own. For some, these add-on programs can be very effective and helpful. In any event, any trade that will lead a trader prematurely into known support or resistance is often a trade that is doomed to failure and it’s important to realize these trades are very low probability in nature. In short, price action is where the real trade selection takes place, and indicators and oscillators supply filtering information to reinforce the strength or weakness of the trade under consideration.

This is among the most difficult concepts to learn in trading, as many day traders are looking for a magic oscillator or indicator that will revolutionize their trading results. I am sorry to report that, to date, no such magical oscillator or indicator exists. Look to identify solid trades in the price action of any chart, and then calculate the potential to profit by identifying where support and resistance will affect the performance of your trade. Many traders use pivots and other predictive indicators to calculate support and resistance. For many years, I was in this camp. As I have grown older, I prefer to identify support and resistance as it develops on the chart, not through some artificial predictive means. This attitude is subjective in nature, and his a choice each individual trader has to make.

In summary, we have looked at trading against the trend and concluded that countertrend trading results in low probability trades, on the other hand trading with the trend results in higher probability trades. We have also noted that known support and resistance are prime movers in determining the feasibility and potential profitability of any trade. Price action is the name of the game, and learning to read and interpret what price action is telling a day trader is the real secret to trading success. If you can master reading price action, it is highly likely you can become a successful day trader.

- About the Author: Learn to trade from a full time trader. All active members may attend FREE daily trading room and receive nightly market recap video (a $495 value). Click here and get your free videos and FREE live trading room. Article Source

I wrote about trading volume and how to use it in trading before. Here, we will extend to the application of volume as an indicator in trading. Let’s see how we apply volume as a technical indicator.

Volume plays an important role as an indicator traders use to indicate price direction. Interpretation of volume signals will be one of the handiest tools in your trading toolbox.

Volume is like a form of energy, securities respond to energy. Traders’ energies translate into volume which is the number of shares traded in a specific period of time.

Typically, you can spot representation of trading volume and spikes that run along the bottom of charts we are observing. If you are looking at a daily candlestick chart, a spike below represents the total number of shares trading during that day.

As I mentioned in the beginning, volume is an important indicator, the following are general approaches to read trading signals from the volume.

First, look for high volume on price breakout. When price break its resistance and go up (or break its support and go down). As the price continues their direction, you expect for strong volume. When the price tops off and pullback, you have to make sure that the pullback volume is relatively low. If the pullback volume is strong, it is better to take profit.

Second, scan charts to find the securities that are building their bases by locating the security that increasing in volume while its price continues to trade in the same tight and price range as before. This pattern indicates a high possibility to that institutional investors are quietly accumulating. You have options to wait for the price breaks out or enter a trade while securities are still in the base. If you choose the second, you have to set your stop loss extremely tight to minimize risk.

The third is to use volume and chart pattern together. For example, after 2-3 days up, if today’s price makes a new recent high but the candlesticks form as a doji, star, or other reversal patterns. It’s good time to take profits.

Finally, if climatic volume designated by a huge volume spikes near the end of extended trend, it often indicates that the trend might soon slow or end. Conversely, just because a climatic volume signals a trend reversal, do not take this as a signal to start bottom fishing. The patterns sometimes take a few days or occasionally, misfire.

- About the Author: Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management. If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System. You would also find the recommended trading books, DVDs, software and tools at MetaStock Trading Store. Article Source

The Dow pushed up through the 618% at 10,165/72 therefore that took out the Elliott wave structure downwards for the time being, but it has not taken out the terminal high of 10,408, indeed technically the Elliott count down is still in play, this is major to realize ahead jumping the gun and exiting or going long, the news that pushed the market overnight will be disregarded tomorrow.

Firstly, we need to see if resistance becomes support at 10,300, there are markets on their supports in Australia mainly, the Materials sector, as it is above the MediumLevel 11,500, in line with US BHP above 65 and local BHP above 38, the banks on the other hand are not supported they are facing resistance, the Dow is on 10,000 which is support, we have been anticipating a break there, the same with the XJO on 4300 support (Group1)

Gold is not on sustained, sure it has rallied and might shatter from 1200 or push to 1230 if the Dow pushes to 10600, however for now it is under 1200.

Forex, the AUD will push higher leading stock, whenever the DXY breaks done 82, it places it into a bigger bearish picture toward 80 and the Euro above 1.30 this would change the wave counts there, it hasn’t occurred as yet and we require seeing this played out

It would be tempting to chase the resource today, if so keep it tight and understand Copper is creating the first high above the level TL3 and will retest it, so expect a likely pull back and crude touching on 80 will meet with a reaction, I saying don’t get trapped, play a shorter time frame.

The ASX200 XJO is finding support at 4400 however it starts running into supply and resistance at 4500, the 618% retrenchment is around 4700 and the 50% retrenchment at 4600, so there is resistance all above 4500, so whatever happens at 4500 will set the scene for the next trend. There are a variety of things that can happen, firstly, it is likely to react to some degree, either failing at this level or gathering itself after the reaction and climbing above creating the first high above the level then retesting the level for support, but normally the first high above the level is the top of the last trend, so from here a larger pattern would unfold across 4500, eventually finding support if this is the case we would be trading long from here, the other point on the local markets is that stocks are current oversold and without the fear of the US to hold then down they will move up quickly, so we also need a trading plan for that.

In a nutshell the resistances for the Dow at 10,500 and the ASX200 at 4500 are the key points for the week ahead. Whenever these levels become support then we can await higher moves, these events when they come will take time to evolve we will be discussing the finer details of this possible ness if it unfolds.

- About the Author: TradingLounge™.com.au and the TradingLevels™ Analysis Service have been developed by Peter Mathers to meet a growing demand for accessible, sensible education and his TradingLevels™-based analysis. Delivering high quality analysis and trades recommendations for shares, CFDs, cfd technical chart analysis, indices, commodity, the TradingLounge™ has been in strong demand growing from strength to strength. Peter is author of “Trading CFDs in Today’s Markets“. If you want to know more about trading analysis, click here. Article Source

Reacceleration by Robert W. Colby

Summary: reacceleration. S&P 500 Composite (SPX) rose 1.54% to 1,095.34 on 7/13/10, for its sixth consecutive daily gain, its first such winning streak since April. SPX penetrated resistance at 1,085.27, the Fibonacci 61.8% of June-July 2010 range, and is challenging its 50-day SMA now at 1,0… Day Trader:  Click here to Read More »

Reacceleration by Robert W. Colby

Summary: reacceleration. S&P 500 Composite (SPX) rose 1.54% to 1,095.34 on 7/13/10, for its sixth consecutive daily gain, its first such winning streak since April. SPX penetrated resistance at 1,085.27, the Fibonacci 61.8% of June-July 2010 range, and is challenging its 50-day SMA now at 1,0… Day Trader:  Click here to Read More »

PMP Limited endured a doubling bottom. The technical share price target is calculated by using the following calculation. With the double bottom shaping you commence by adding the change among the first bottom (B1) and the reply high. Following the second bottom, the recent reaction high is the new breakout point. It is main to be mindful that for a double bottom to be confirmed the stock rate need break through the answer high and over and done.

Technical Signals

1. Prior Trend: similar more reversal patterns, there should be a tendency presents to reverse.

2. First Trough: The first trough has to symbolize the lowest point of the assign trend. The first trough is clearly in a down trend and normal in its development.

3. Peak: second the opening trough a bounce occurs and a reaction high is created. Usually it is between 10 and 20%. The Volume in the short rally is of no consequence. The high is often rounded in appearance as it lacks support to go on and rally higher, the price falls to the second bottom.

4. Second trough: the fall in stock cost of the answer high eventuates on extremely little volume and that’s when it equals the recent low or bottom (B1). Whilst this price appears to be supported, the double bottom has not played out yet and time will see it eventuate.

5. Progress from trough: the double bottom makes the volume levels further key than a double top. It requires clear evidence that the volume and the accumulation pressure is rising upon the stock price advancing from the second trough or bottom (B2). The price might gap up, this will show signs of positive sentiment and traders will return seeing that opportunity waits.

6. Resistance Break: while the price trades up to the resistance high, the double top and trend reversal is not fulfilled. The breakout from the resistance high (within the troughs) completes the double bottom design. The latest rally higher should have accelerated movements on with above intermediate volume.

8. Resistance Turned Support: Quite often the broken resistance level develops into a brand new support level; there is often a retest of this support level. This retest offers a second opportunity to close out a short position or enter a new trade to the upside.

9. Price Target: The technical share price target is calculated by using the following calculation, with the double bottom formation you start by adding the difference between the first bottom (B1) and the reaction high. Subsequent the second bottom the late retort high is the new breakout point. The bigger the formation the bigger the opportunity for a probable advance higher.

- About the Author: TradingLounge™.com.au and the TradingLevels™ Analysis Service have been developed by Peter Mathers to meet a growing demand for accessible, sensible education and his TradingLevels™-based analysis. Delivering high quality analysis and trades recommendations for shares, CFDs, forex  trading signals, indices, commodity, the TradingLounge™ has been in strong demand growing from strength to strength. Peter is author of “Trading CFDs in Today’s Markets“. If you want to know more about trading analysis, click here. Article Source

I have experienced that people after losing the money in trade used to enter the intraday or jobbing segment. Jobbing is the other name of the intraday trade. In earlier articles I have already explained what is intraday trade? And what are the types of intraday trade? Now the most important question I need to answer is when to do intraday trade?

We all will agree that all days are not trading days, why?  A day in which the trend is not clearly understood is considered as a bad day for the traders. 2nd case when the extreme volatility makes the market to oscillate between the negative and positive trading band. 3rd case when price oscillate between a small trading bands keeping very less opportunity for the speculators. In all these three cases it is difficult to trade and difficult to recognize that whether to do a trade or not.

 I have devised a truly mathematical method which will make you inform whether to do an intraday trade or not on particular day. Though the complete procedure involve in this mathematical modeling I will not revel to you because of my commercial compulsion but I will provide you few simple to use methods.

1. If the gap up or gap down opening happens at 0.618% or 1.272% Fibonacci retracement levels  of the previous days high low range then it is a trading day and the current trend will remain continue for the  day and confidently do the day trade.
2. If the flat opening followed with resistance or support at 0.382 % retracement of the previous days high or low then maximum possibility the trend will give a ‘U’ turn. In this case wait for 50% retracement level of the previous days to break to decide upon a trade.
3. If the current price is above or below the 90 degree resistance or support Gann line drawn from the low or high of the previous day then it is a good day to initiate day trade in the current direction of the trend.
4. If current price is above or below the 30 degree support or resistance Gann line drawn from the previous days high and low then wait for the break out above 90 degree to initiate intraday trade.
5. If the technical intraday chart give the view of a pennant, rectangle then do not day trade on this day.
6. If the last intraday five minuet candle length is less than  50 %  as compared with the last recorded 15 minuet  candle line length then don’t do the day trade till 5 minuet candle has not broken the last 15 minuet candles high or low.  

 These are the most important aspect one intraday trader must look into. Besides that to plan an intraday trade is also a very difficult task. The planning of a intraday trade involves many key aspects out of which the traders objective is most important. It is quite general all traders have the general objective to make profit but the quantum of profit expectation is vital according to my view. 

 In Intraday trade since the earning comes only throught speculation it is always advisable to deploy minimum % of your trading capital maximum up to 30% in a single trade. The 2nd point is being a swing trader. If you happen to be a swing trader and follow the above six steps as mentioned above I am sure you will be a winner in this stock market.  The last advice I can give to all the traders is invest in your education. I have seen and experiences in my 9 years of career in educating the traders. Those who have taken the lesson from their 1st mistake in trading and invested in their self education by attending various seminar programs, buying good literatures are the most successful traders of the contemporary time.

If you think rationally learning activity to educate yourself will not cost you more than 10% of your losses, which you may incur by jump in to the trade without proper knowledge. Do not think I am telling this to promote own products. My core consciousness says this is the truth you may accept it today or accept it in future. I always ask few things to build up the confidence level of the broken down traders. Why you are failure? Many say I was new to this market that’s why. Many say I made the mistake.  Many say I lured by the brokers and friends. Most people say I lack the knowledge.  My friends it is the high time we all must accept this truth and start up the slogan”1st Educate yourself then earn”.

my education : 1.graduate in Mathematics 2.Post Graduate in Computer Aplication(MCA) 3.NCFM,AMFI

My recent Pubilications 1.Gann’s Method 2.Fibonacci Technique 3.Master’s Key to Future and Options 4.Technical Analysis three voluemes

Article Source:http://www.articlesbase.com/day-trading-articles/when-to-do-intraday-trade-when-not-to-do-intraday-trade-1651544.html