Intraday Trading  |  AUG 2003

Strategies For Daytrading by Jacob Singer

Strategies For Daytrading by Jacob Singer These strategies could improve your daytrading. Trading strategies that fall under the definition of daytrading can be confusing, because there are really three types of daytrading: intraday trading, end-of-day trading, and daytrading. The three kinds are similar, but there are clear distinctions. 1. Intraday trading is when a trader makes a large number of trades in a single day, taking a one- or two-point profit and trading both short and long positions as the market changes direction during the day. The objective is to have all of these small trades add up to a good profit at the end of the day. Positions are always closed out before the market closes. This type of trading can only be done when commissions charged per trade are very small. 2. End-of-day trading occurs when a trader takes a position in the morning as the market opens, and once a fill is received, places a target level to close the position. The trader places a stop-loss in case the position moves against him or her, and closes all open positions at the end of the day. 3. Daytrading is similar to end-of-day trading, but positions can be held overnight. This is because the first 15 to 20 minutes of trading in the morning usually follow the trend of the last 15 to 20 minutes before the previous day’s close. The daytrader takes a position during the day, planning to close out either that day or the follow- ing one, whenever his trading target is met. He will watch the position over the one or two days, all the while adjusting his stop-loss and allowing his profits to ride.

by Jacob Singer