Day Trading Technical Indicators

Technical indicators are the representation of mathematical formulae a day trader can use to decide when to do the trading. Forex day trading involves buying and selling of various currencies with the goal of making a profit from the difference between the buying price and the selling price within a day.

The day traders employ different strategies like short term scalping where positions are only held for a few seconds or minutes or longer term swing and position trading, when they hold the position for the whole trading day. For their trades they follow one or more day trading technical indicators or develop a strategy based on a combination of many such indicators.

A day trading technical indicator is a series of data points that can be derived by applying a formula to the price data. Price data includes any combination of the open, high, low, or close over a period of time.

Some technical indicators may use only the closing prices while others incorporate volume and open interest into their formulas. The price data is entered into the formula and a data point is produced, which in turn creates the indicator.

The list of day trading technical indicators is practically endless. There are Absolute Breadth Index, Bollinger Bands, Bull/Bear Ratio, Candlestick Charts, indicators based on Dow Theory or Elliot Wave Theory, Envelopes, Fibonacci Levels, MACD, Moving Averages, TRIX, Weighted Close, and many more. All these can be used as a day trading technical indicators with slight or no modifications.

For example, the absolute breadth index or ABI is a market momentum indicator which shows the activity, volatility, and change taking place in the market without paying attention to the direction of the prices. High readings implicate active markets. As a day trading technical indicator, it can predict future direction if combined with other indicators.

Bollinger Bands on the other hand are a kind of moving average envelope. It exist at standard deviation levels above and below the moving average and generally stay within the upper and lower bands. As a day trading technical indicators, it predicts the future market movements. Fibonacci numbers with 4 theories - arcs, fans, retracements, and time zones, which highlight reversals in trends.

Day trading technical indicators has three functions–to alert, to confirm and to predict. So a trader can never miss a trading opportunity or run into loss if he or she can use the indicators judiciously.

The best approach will be to develop a strategy based on more than one indicator. Learning how to use these indicators is more of an art than a science. Through careful study and analysis, a day trading technical indicator can be developed over time, but they can never be full proof.

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Defining Your Day Trading Edge

Many people in corporations have spent countless days and countless dollars working to define their Unique Selling Propositions (USP's) so that the public gets a clear, concise, benefit-driven message. The USP is also the "edge" which make these businesses stand out among their peers.

In day trading, you need to define YOUR edge to help you become clear on what it is that makes you money on a CONSISTENT basis, both now and well into the future. If you think about it long enough, chances are that you will have at least one good edge which you can use to define your trading edge; and most likely it will be a personality trait that separates you from the rest.

You may not know your edge at this time, however, so spend a few hours with and ponder these areas when determining what sets you apart from all of the other traders in the marketplace:

Start with your personality traits and what makes you a better trader than someone else:
- Are you faster on the keyboard than most other people?
- Do you have a background in one of the riskier professions (pilot, firefighter, etc.) so that you are comfortable with risk?
- Do you have more tenacity than other people you know?
- Are you able to blend humility along with decisiveness better than most people you know?
- Can you accept losses emotionally and still perform with precision?
- Are you extremely analytical?
- Are you faster at mathematical calculations?
- Do you think in probabilities?
- Are you more disciplined?
- Do you have a deep understanding of trading psychology?

For the more "functional" ways to determine your edge, ask yourself:
- Do you have new ways to use a specific technical indicator?
- Do you have better technology (faster, more robust, etc.)?
- Do you have specific trading education which most people do not have?
- Do you have any background with previous traders such as having been on the trading floor or trading pits?
- Do you have programming language experience to help you write programs to trade the markets?
- Do you trade around and/or associate with consistently profitable traders?
- Do you have better money management techniques?
- Do you have better risk management systems in place?

The are just some topics to get you started thinking about your edge. Once you have defined your it, develop day trading strategies around your edge(s) so that you play to your strengths. While the market offers no guarantees of success, a trading style based on your strengths will increase your confidence when trading in the markets.

If you ever decide to raise money in the form of an investment advisory firm or hedge fund, you will want to have your edge(s) well-defined. Doing so will help you with marketing efforts and attracting the necessary capital to conduct your business.

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Forex Trading, First Thing You Should Know

If you want to make money iin an alternative way which give high potential return , then you might want to try the Forex (the foreign currency exchange). The Forex is an alternative to traditional stock market investing. Rather than investing in shares of a company, you are investing in a foreign currency. In the past, only large companies and massive enterprises used Forex to trade, but now with tools like the internet, it is possible for anyone to get the proper forex trading training and begin making money online. This article focuses on forex training.

Forex trading training is now available from many sources, both on the internet and in the real world. These sources include seminars, websites, forums, and eBooks. Since Forex is an investment vehicle, it is important to realize that there are risks involved. Thus, it would be wise at first to only use "extra" money that you are not depending on to pay your bills. At least initially, until you've had a chance to practice your methods, you should only use money that your are willing to lose. Remember, never spend money that you cannot afford to lose

Secondly, when starting your forex trading training, you should understand that it can take some time to learn everything that you need to know to succeed in the forex. However, this training time should pay off. It is better to go in totally prepared and actually succeed, than to rush in and possibly lose your money.

Your forex trading training will cover various topics, from reading and analyzing charts and understanding trends in the market, to being able to manage your finances and keep your open positions protected. Given that trading on the Forex can initially have a bit of a learning curve, some people decide to use a forex broker. But if you have some time, with the proper forex trading training you can save money on broker fees as well as enjoying the thrill of predicting a market trend accurately and being able to take full advantage of it.

Your forex trading training is an ongoing process. There will always be new trends and changes in the foreign markets. Even after you've finished your formal forex training, you can continue to learn a lot from those who have been trading longer than you have. You can meet these experts on online forums or you can purchase their eBooks and learn their trading strategies. And remember, there is a support center at the forex itself that can help you if you have a question or get stuck.

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