Chapter 9
Following Market Indicators and Tried-and-True Day Trading Strategies
IN THIS CHAPTER
Studying the psychology and moods of the market
Following the flow of funds
Knowing what to look for during the trading day
Avoiding dangerous situations
Looking at strategies that many day traders use
Day traders put their research to work through a range of different strategies. All strategies have two things in common: They’re designed to make money, and they’re designed to work in a single day. And the best ones help traders cut through the psychology of the market.
In this day and age, most trading takes place via computers. Of course, human beings often direct the trading, but the machines are doing the work. Short-term profit potentials can be very small. As much as they want to be dispassionate, human traders get sucked into hope, fear, and greed — the three emotions that ruin people every day. To complicate matters, many markets, such as options and futures, are zero-sum markets, ...
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