Monday, May 16, 2011

dangers of day trading

1. first of all, it is unpredictable.
2. the 30 day MA is a best guide. And one cannot use 30 d MA in day trading.
3. Day trading graph can be used for buying and selling decision for the present day. But it cannot be used for holding stocks. One just gets into a wrong position with day trading if one wants to hold the stock.
4. Similar thing happened with AG which i bought at 17.7. It went up to 19, then came back to 17.6 when I sold it. If i followed the 30 d MA, I would have shorted at 19 instead and made a profit.
5. Day trading is just too unpredictable to make any guesses about the next day stock trend. Because the tread sets with a time span of 2-4 days. stocks consolidate even when coming down. So day trading is no use here.
6. Use 30 day MA to get into positions. Can use day trading graph for getting out. Use 30 MA for understanding the over all picture. When the over all picture is looking good then use the day trading graph and not the other way round. 


1 comment:

Trading said...

Hi,

Day trading may look like investing, but it's far from it. The dangers associated with day trading are numerous, the most prominent being the fact that you can lose copious amounts of money when day trading. Thanks...

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