There are various trading rules that have evolved into a classic among trading books. It is not just about surviving the fluctuations of the market but to master the moves and make money. One of the best strategies to succeed is to buy rumors and sell facts as nothing new ever occurs in the markets. Another important thing you need to remember is that you must never watch or trade too many markets at once. All intelligent traders must apply these strategies along with the most important day deal strategy. Which is momentum day trading strategy?
With momentum, day trading strategies traders look to trade stocks on strong upward or downward trends. Momentum day trading strategy needs a stock that is moving. Stocks that are cutting around sideways are of no use. Therefore, the primary step for a trader is to find the stocks that are moving. Traders/experts use stock scanners to find these stocks. The second step in this strategy is to find out. What the catalyst is that will drive this stock to have a 30-40% intraday move. Not all the stocks are capable of putting in 30-40% moves.
Hence, traders filter the stocks that are moving by market cap and float. Stocks market cap, the float is inversely proportional to the speed of trading i.e. Stocks with a smaller market cap and float will trade faster. This is because there is a reduced supply of stocks and during times of high demand, these stocks can lead.
Thus, briefly, the trader can enter after confirming that. The stock is already starting to rush in pre-market or in the first 30min of trading. Has a catalyst and has a small market cap or a low float. For this strategy, mornings are always the best time to trade.
This is extensively employed strategy by technical analysts and experts in advisory firms in order to generate accurate stock cash tips.