How To Trade Intraday For Profit

Buying at the right price and then selling at the right time is the way to make money day trading in the stock market.  Strange as it may sound money can be made intraday on a stock that loses money day to day, and the reverse is also true. Money can be lost intraday on a stock that makes money day to day.

Intraday Profitable Case Study - Fortress Biotech, Inc. (FBIO)

Proof for the statement above is seen in the 10-20-2020 trading chart for Fortress Biotech, Inc. (FBIO). A long stock position taken by buying FBIO at 9:34 a.m. at $2.58 could make a profit if sold intraday at 10:06 a.m. at $2.65. That trade would yield a gain of 2.7% in the span of only 32 minutes. There was over 69,000 shares of FBIO traded in the 32 minute timeframe mentioned above. Those 32 minutes was not the only intraday profitable timeframe for a position taken at 9:34 am, at 1:17 pm the price hit $2.65 again so there was a second chance intraday.

Further Money Making Intraday Opportunities

If profit was taken on the FBIO 9:34 am position even more money was available to be made by buying again at 10:44 am at $2.51. Another 4% gain could be made selling FBIO at 11:09 am at $2.63 which is a time span of only 25 minutes.

So by identifying and trading one stock intraday a greater profit can be made in minutes than a bank will pay on a savings deposited for a year.  So the answer to the question "Can I really make money day trading" is a definite YES!

Note: The FBIO 9:34 am entry entry point was identified on the MostExcellentInvestor.com 9:30 am - 10 am watchlist in the subscriber area.

Does high dollar volume always mean rising price momentum? Of course not. Case in point is Amazon that actually has a price that has been trending down.  Check out the Friday 10-16-2020 1 day chart below:

Subtly this stock is trending down if you look at its 5 day average.  Other high dollar volume stocks that are trending up instead of down are Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA). The trend up or down for these high dollar volume stocks can be long  and slow to build. Patience is needed, and they are worth investing in (holding for a long time) and are not good for trading (selling quickly).

On the other hand stocks that are good for trading are usually small cap stocks like JAKKS Pacific, Inc. (JAKK), and Ocean Power Technologies, Inc. (OPTT). Small caps like these two stocks can be traded for a good gain intraday. If the right entry point is entered then even if ultimately the stock drops in price by end of day a profitable exit point can be found.

Note: The entry entry point for JAKK and OPTT was identified on the MostExcellentInvestor.com 9:30 am - 10 am watchlist in the subscriber area.

 

Stock Price Momentum

Momentum is good while it's moving in the direction of the trend that you want to capitalize on. If you are long on stocks (meaning you want to buy them first then sell them when the price is higher) then you are looking at rising price momentum and want to capitalize on stocks with prices that will move higher after you buy them. But we all know, or learn soon, that momentum doesn't continue in the same direction forever ("trees don't grow to the sky"). At some point momentum will change.

What causes Momentum To Slow Or Even Reverse?

The answer is friction. A car rolling without engine power may have enough momentum to keep it rolling for a while after the engine stops. But it will come to a stop because of friction. The surface of the ground rubbing against the tread of the tires will slow and eventually stop the wheels from turning which will bring the car to a stop. If there is an incline such as the car was going up a hill when the engine stopped then when forward momentum stops then the car will start falling back down the hill when all of the momentum is exhausted.

Stock prices are like the car in the example above. Just like a car under engine power can overcome an uphill incline, so a stock's price can move higher even if the market is falling. The opposite is true too. When the market is risinig even a stock with a price that had forward momentum (rising prices) can run into friction and the price can begin to drop even while the market is rising.

What Kind Of Friction Slows Stock Price Forward Momentum?

The biggest source of friction for stock prices is bad news. News about the market in general can be bad, or it can even be bad news specific to one stock (hopefully not your stock). Bad news can put the breaks on forward stock price momentum and send it into reverse. Backward momentum can be shockingly worse than previous forward momentum. "Stock prices take the stairs up, but the elevator down" is a saying that is familiar to most trades because it is great picture for an absolute reality.

Bad earnings surprises, a competitor's better product offering, and key negative changes in leadership within the company are all things that cause friction for a stock's price and may cause it to slow or reverse downward. Some of these things can not be known ahead of time by the general public. That's why advanced analytics on key indicators are essential to have. There are analytics that can tell you how a stock compares with its peers, the direction and strength of its price momentum, where the ceiling (resistanct) and floor (support) is likely to be. Compiling and examining the analytics that reveals the foregoing information for a stock can be time consuming but is worth it.

Want a shortcut for your stock trading research?

That is what membership to this website is all about. Giving traders the best stocks to watch and approximate times to trade them.

 

Asking this question is something that many new stock traders do too often. After all, no one gets into trading stocks to lose money. But it happens. Until a you find a winning strategy.

What winning strategies you ask?

One of the most popular strategies is called momentum trading where a trader looks for stocks with a rising price on rising volume. Doesn't that mean this is a good stock because more and more investors are interested in it? Maybe but not always.

More and more investors may get interested in a stock because the company behind the stock has a good story. A stock may have a good story that hits the news and draws the attention of investors based only on the sensationalism of the story. If it's a short story then the price of the stock can come crashing down. Usually this is because the stock price was based only on the story no viable product (viable meaning product that makes money).

Rather than trying to ride a stock that is already rising due to a great story it's better to find a stock with a price that will begin rising soon, and get in before the rise. How do you find those stocks. Believe it or not there are foot prints to follow. How to do that will be in the next post.

Note: Most Excellent Investor subscribers get access to watchlists that contain multiple stocks per hour.

Greed Versus Fear

When the market is going up investors and traders that actively participate in it are said to be motivated by greed. When those same investors refuse to participate when the market is going down, by either cashing out or not adding to current positions, those same traders and investors are said to be motivated by fear. Contrarians are told to buy when everyone else is fearful and sell when everyone else is greedy.

Is all of this investing behavior correct, incorrect, or a mixture of both? If it's a mixture then which part is correct and which is incorrect? Everyone must admit that greed has paid off, but so has fear, and contrarianism. So buy and hold is the strategy that is recommended to take advantage of all of the ups and all of the downs in the market.

Buy And Hold

Since the stock market averages up over time the wisdom is stay in it for the long-haul and don't worry about its price fluctuations.

Experts say "if an investor were to have held an S&P 500 index fund between Jan. 1, 1995 and Dec. 31, 2014, they'd have netted a cumulative return of 555%, or 9.9% a year. This includes holding through both the dot-com bubble and the Great Recession. But, had they missed just the 10-best trading days over this 20-year period because they'd scurried to the sidelines out of fear, their aggregate return would have been more than halved to 191%."

But isn't the reverse also true? What if an active trading investor hadn't been in the market for just the 10-worst trading days over a 20-year period where would their portfolio have been? Wouldn't the aggregate return be far-higher than the average return over that period?

Timing The Market

All experts agree that this can't be done. While it is true that it can't be done with 100% accuracy is it possible for an informed trader to be right more often then he or she is wrong? Thus maximizing participation in the market on it's best days and minimizing the damage done on it's worst days? Sure, sure that's a better way but only professional trading gurus and large analytical staffs could ever hope to succeed at this strategy, right?

Research To The Rescue?

The internet has opened up information to retail investors that used to only be available to experts. Gurus used to process this financial information and come up with indicators that could give them an advantage in knowing when to limit or maximize trading in particular stocks. But now with the internet, and the research available at various trading services, even retail investors (non-experts) can improve their ability to trade in and out of stocks manifesting trading signals for price increases and decreases. Technical indicators combined with the financial news now available for stocks that trade on the US stock exchanges can warn retail traders as to which stocks to avoid and give a heads up regarding stocks to buy because they are poised to move up in price.

Now it comes down to choosing which stock research site to use. There are a prolific amount of research sites to choose from and success at the use of any will be dependent on the skill of the individual trader to execute on the information given. With care and attention to detail the right stock research site combined with timely news about stocks on a watch list can result in an above average success rate on choosing and timing the buying and selling of winning stocks.

Resources for financial news on stocks:
Yahoo Finance
CNBC
Bloomberg
MSN Money
Zacks

Resources for easy trading research and signals:
Most Excellent Investor - our site

Non-Professional Stock Traders Beware

Non-professional stock traders are told to leave the intraday stock trading to the professionals. This warning is a protection for the unprepared stock trader but a well prepared (and disciplined) amateur can still win trading stocks by holding very short-term (less than a day) positions in the stock market.

Why Intraday Stock Trading Is Risky

It's a given that high reward brings high risk.  There is very high reward from high returns that Intraday trading brings. When the market, or even an individual stock, has a down day often times there are times during the trading day that a profit can be made as stock price(s) dip and recover. Get it right and a trader can win during the day even when the market is down.  But get it wrong and an trader could lose intra day even when the market is up. But the trader who is prepared ahead of time for the day's trading can jump on an opportunity when it appears.

Prepared How?

Besides real-time stock trading information something else must be added to the arsenal of the intra day stock trader. We like to refer to it as ahead-of-time analytics. Specific stock trading opportunities based on trading indicators gathered on watch lists ahead of time can be used in conjunction with real-time analytics as the trading day progresses toward the pivot time(s) indicated by the ahead-of-time watch list.

Where Can You Find The Stock Analytics Necessary For Intra day Success?

The internet is a wonder. Expert information on a variety of subjects are found at your finger tips. But to be successful at trading stocks intra day requires actionable information. There are high cost stock trading services that can provide actionable trading information. This website is one stock trading resource that provides specific watch lists based on trading indicators that ensure the stocks listed are volatile enough, have the proper market interest and technical signals for the time(s) indicated.

A daily snippet of a sample from one of our watch lists is provided for free. Use of the stocks with the research that has gone into the ones chosen for our watch lists can help even non-professionals trade stocks intra day with consistent success.

Short term or day trading is a highly speculative endeavor. Speculation in the stock market is not the ability to know the future since no one can know the future. So how do you speculate with any success?

Develop strategies with winning advantages, when the odds are on your side you have the chance to win more often than you lose. Work the odds correctly and you will lose less often (but be warned that you can still lose).

Take heart, short-term trading is how most traders and would be traders play the markets. For individual stock traders short-term trading offers the greatest financial rewards. But on the flip side short-term also presents the greatest challenge, requiring constant attention and vigilance and a strict plan.

This website offers hourly stock watch lists containing stocks that have the odds stacked in their favor for a rise in price. The analytics used are based on the proprietary use of technical indicators such as price and volume, price convergence/divergence, supply and demand, and trending. All watch lists presented on this site are used best for determining short-term stock positions.

The 7 Day FREE Trial period is so that all new members have the opportunity to back test and paper trade while looking at the performance of the stocks in our watch lists without risking any money (not even the price of our subscription since if cancelled within the 7 Days you won't be billed).

The secret to successful short-term trading is choosing stocks that follow the trend of your trading style, and strictly following the trading plan you developed before hand - when to get in, how long to stay, when to get out - that limits loss of principal (amount invested), and maximizes profits.

This is not a set-it-and-forget-it endeavor. It's more of a set-it-and-watch-it so as to be ready to get out of a trade endeavor. The analytics behind the hourly watch lists presented on this site provide a head start in picking day trade winning stocks. After back testing and paper trading you can determine the best time of day to make and duration to stay in your trades.

Here's to your fruitful day trading!

Owning very good stock trading software can be very handy for making faster and easier transactions in the stock exchange. It is a great way to analyze the market with the use of an computerized solution that is capable of examining important indexes as well as giving you a preview of which shares you should consider trading.

Stock trading software is basically a computer program (sometimes its an internet service) that sits on your computer integrated with a brokerage account allowing you a certain degree of access to the stocks of any exchange in the world. The program may have the ability to analyze movements within international markets too.

Traders often use this kind of software to perform both buying and selling in the stock exchange. It  offers investors various benefits that can help them in successfully engaging in the stock market. Here are some of the ways that the software helps you:

Time Saving

One of the major benefits in using stock trading software is that it saves you a lot of time. After all, time is a very essential factor in stock trading for you to be able to make the best deals in the most timely manner.

Through the use of trading software, you can forego having to spend a long time trying to interpret data for your stocks through printed reports or online stock pages. Through a single click of the mouse, the software can download the necessary information and will process all the data for you so you can make your decisions faster.

Objective Guidance

Another great benefit for using trading software is that it can give you great trading guidance, especially if you are a beginner. Because the program is not based on emotions when presenting its selections to you, a more objective and truthful judgment on which stocks will be best to invest in can be delivered. And so, there is a better chance that you will be guided to making a better and unbiased decision.

More Control

Using stock trading software also gives you more access and control over your own accounts. Instead of relying only on brokers to negotiate deals for you, you are now empowered to handle a lot of the work yourself, and you can even check on how your investments are doing in the market at anytime. This way, you can monitor your stocks more effectively.

Broadening Of Your Portfolio

Finally, the use of trading software can also allow you to make international trades easier and this may broaden your portfolio. Because the program is based on information technology and a vast online network, it would be easier for you to make global transactions without having to leave your own home. This can pave way to broaden your stock portfolio and even make it more secure.

Indeed, the use of trading software is a great way to maximize what modern technology has to offer and incorporate it into your profit making. By saving you a lot of time, giving you more objective advice, empowering you to have more control and broadening your portfolio, these programs have proven very useful for anyone interested in trading stocks.

And so, if you are interested in making your stock transactions faster and easier, or if you are merely new to the market and want very good assistance in your decision making, then you can invest in a good stock trading software package.