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Day Trading Strategies and Tips

Trading has increased in popularity for the past recent years especially since the emergence of online brokerages and trading platforms. It has become easier for anyone to begin trading. As long as you have the right equipment and resources, you can start.

You still have to remember that sufficient knowledge about your trades or investments will still make the whole experience easier for you.

Day trading has been one of the most popularly used trading strategy. But what exactly is day trading?

man chooses Day Trading on tablet concept

Day Trading

This is the process of buying and selling various financial instruments such as futures, options, currencies, and stocks. Day trading is usually done within a single trading day, hence the name.

It can occur in any marketplace but is often seen in the foreign-exchange (forex) and stock markets. The position held by day traders can either be long (immediate buying) or short (“borrowing” shares before offering to sell at a certain price).

In day trading, you have a goal set to making profit from the difference between the buying and selling prices.

Day trading is often used to take advantage of volatility during the trading day. This is to reduce overnight risks caused by events that can happen when the markets close.

A huge amount of hype surrounds day trading, with some website promoting it as a way to get rich quick and others claiming it to be impossible. But there are a lot of people across the globe that found success and are making a living off the markets. Still, not everyone is as skilled or fortunate, meaning that the truth can be found somewhere in between.

Day Trading Strategies and Tips

Are you a Day Trader?

Day traders engage in long and short trades as an attempt to make profits during intraday movements of a market’s price action. This can be a result of temporary inefficiencies in the supply and demand of the moment. As a day trader, you will typically have all your trades closed and will no longer hold any open positions overnight.

A day trader doesn’t usually take long-term views on a stock or security. They also like volatility and prefer stocks to have larger movements over a short-period of time. Generally speaking, higher volatility is synonymous to more opportunities for day traders.

Volume is also an important driving factor for them. It will be easier to execute trades the more shares are being exchanged. In other words, liquidity is key. Day traders need stocks to be fairly liquid in order for them to not be swallowed by wide bid-ask spreads.

Here are some of the characteristics that a professional day trader possesses:

  • Sufficient Capital: before starting on any kind of trade, you have to make sure that your capital will be enough to sustain your trades. Day traders mostly use only risk capital since it’s something that they can afford to lose. This can help protect you from financial ruin and eliminate emotions from trading. A large amount of capital is often necessary when you expect to effectively capitalize on intra-day price movements.
  • Discipline: even if you have a profitable strategy, it can be rendered useless without the right amount of discipline. A lot of day traders end up losing money because they fail to make trades that meet their own criteria. It’s impossible to attain success without discipline.
  • Knowledge and Experience in the Marketplace: remember that without sufficient knowledge, you may end up failing. Day traders who fail to properly understand market fundamentals end up losing their money.
  • A Strategy: as a trader, you need to stay ahead of the rest of the market. There are a number of strategies that you can use to your advantage as day trader. These strategies need to be polished until the profits they produce are consistent and the losses are effectively minimized.

As a day trader you need to have a solid strategy to help you gain as much profit as you can. We’ll now be discussing the strategies that you can use and should avoid in day trading.

Day Trading Strategies

Strategies to Use

Momentum Trading

This is a pretty simple day trading Forex strategy. Momentum trading specializes in watching stocks that move significantly in one direction on high volume. You can then try to jump on board to ride the momentum train to a specific target profit.

In order to successfully implement momentum trading, you certainly need to have high level of discipline. You need to wait for the best time for you to enter a position. Also, you need to be completely focused in order to spot the right time for you to make an exit.

Swing Trading

A swing trader is a trader who really relies on fundamentals. They hold their positions longer than a single day. Most fundamentalists are swing traders due to changes in corporate fundamentals usually taking more than a day to produce sufficient price movements for claims of a reasonable profit.

Strategies to Avoid

Reverse Trading

This is considered to be the worst strategy in the world. As an unskilled trader, it is highly advisable for you to steer clear of this strategy. Reverse trading is sometimes called pull-back trading, counter-trend trading, and fading.

First off, risk can already be found in the basic principle of trading against the trend.

As a reverse trader, you need to have the skill to identify potential pullbacks with high probability. Aside from this, you must be able to predict the amount of strength that it will have. Doing such feat might not be impossible, but it does require a lot of market knowledge and experience.


This strategy is highly discouraged when entering the forex market or any markets in general. Scalping aims to make many small profits on minimal price changes. As a scalper, quantity trades will be your priority.

It’s hard for you run out of excitement and more importantly, risks, when using the scalping strategy. Also, as a scalper, you can’t afford to wait for the market to come back and have to close the losing trades in time.

Scalping has the potential to be the most profitable strategy in any financial market. But the risks that come along with it make using this strategy not worth it.

quick tips

And now, we’ll be giving you some tips that you can use in day trading.

Tip #1: Knowledge is Power

No matter what market you might decide to partake, knowing how it works will never lead you astray. But not just the knowledge of basic trading procedures, mind you.

You need to be knowledgeable of the latest market news and events that affect stocks. Never neglect due diligence. Do your homework and research well before delving deeper in this way of trading.

Tip #2: Start Small

Whenever or wherever you may have decided to begin trading, it is advisable to focus on a maximum of one or two stocks during a day trading session. Seeing that you’re still a beginner, this can help you track and find the best opportunities for you.

Tip #3: Have Realistic Profit Expectations

Having a solid strategy doesn’t necessarily mean that you have to win all the time to be profitable. Most traders only succeed in 50 to 60 percent of their trades.

Just make sure that the risk on each of your trades is limited to a specific percentage. This can help in ensuring that you gain more on your winners than you lose on your losers. Your entry and exit methods should also be clearly marked and written down.


There are a lot of different ways to begin trading. If you’re the kind of person who doesn’t mind staying glued in front of the screen for a day, then you should try day trading. Losing or gaining profits will all depend on the experience and decisions you make. Trading is a good thing to add to your skill set. Don’t be scared to take risks, but minimize them as much as you can.

Do you wish you can begin trading today? HQBroker is here to help you. We’ll keep you updated on daily news, events and market trends happening across the globe. You can rest assured that there will be no big opportunity you’ll miss when trading with us, anytime and anywhere. Join us now!

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