Day trading techniques include scalping, fading, daily pivots, and momentum trading. Scalping aims to take quick profits by entering and exiting positions as soon as they become profitable. Fading shorts a stock when it moves up quickly, expecting a sell-off. Daily pivots look to benefit from volatility by buying low and selling high, exiting on signs of reversal. Momentum trades ride trends fueled by news or volume until signs of reversal like decreasing volume or bearish candles. Day traders use candlestick charts, level 2 quotes, and newsfeeds to identify entry points supported by patterns, volume spikes, and order book depth.

1. 5 Day Trading Techniques

2. When stock market traders talk about
day trading, they are referring to buying
and selling stock the same day. They
typically look for small price
movements, then use large amounts of
leverage capital to profit.
Day trading techniques include scalping,
fading, daily pivots, and momentum
trading. But which is the best technique
for you?

3. Day Trading Entry Strategies - Day
traders typically use THREE tools
to identify entry points. 1 -
Intraday Candlestick
Charts. 2 - Level II
Quotes. 3 - Real-Time
Newsfeeds.

4. What Does That Mean? Traders look for specific
candlestick patterns to identify a
possible entry point. They then look for a
spike in volume indicating that
there is support. Finally, they examine
the level II quotes to confirm the current
order book supports a reversal. If all of
these factors align, then they enter the
market.

5. Scalping - The goal of
scalping is to take profits as
quickly as possible.
This is one of the most frequently used
strategies and leads to very fast
trading. Scalpers enter and then exit as
soon as their position becomes
profitable.
They don’t worry about exiting too
early – as long as they have a profit,
they are happy and move on to the
next deal.

6. Fading - Fading is when day
traders short a stock when it
starts to move upward
quickly.
The idea behind this is that the
stock will become overbought
quickly and then sell off as buyers
start to take profits. This is a high
risk strategy, but it can deliver
large profits.
Faders exit their short position as
soon as buyers start to step back
into the market again after the
selloff.

7. Daily Pivots - Here,
traders look to benefit
from the stock’s
volatility. They are
looking to buy at a low,
and then sell at a high.
They exit the market as
soon as there is a sign
of a price reversal.

8. Momentum - To trade on momentum, day
traders look for news releases that are
likely to move the stock price, or for strong
trends on high volume. They will typically
buy when they see one of these conditions
and then ride the trend until there are
signs that it is about to reverse. This
reversal is often signaled by decreasing
volume and the appearance of bearish
candles.

10. Want to learn more about day trading techniques?
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