Welcome to day trading and swing trading strategies
Day trading stocks means buying and selling the shares of a company, or various companies, on a daily basis.
Swing trading stocks means buying and selling the shares of a company, or various companies over a period of time more than one day.
There are a number of day trading styles, but really it comes down to personal preference. Some traders are very active, catching small price movements with large position sizes. They are called "scalpers".
Other day traders want to capture bigger price movements. These trades typically last longer than a scalper's trades, yet may also be quite short-lived at times.
It's recommended new traders only risk 1 percent of their account (or less) on a trade. That means a losing trade has a very small affect on the overall capital balance.
For stocks, the best time for day trading is the first one to two hours after the open, and the last hour before the close. 9:30 am to 11:30 am EST is a two hour period you want to get good at trading. This is most volatile time of the day, offering the biggest price moves and most profit potential. The last hour of the day, 3 pm to 4 pm EST is also typically a good time for trading, as some sizable moves occur then too. If you only want to trade for an hour or two, trade the morning session.
The goal of swing trading is to identify the overall trend and then capture gains with swing trading within that trend. Technical Analysis is often used to help traders take advantage of the current trend in a security and hopefully improve their trades.
Most swing traders work with the main trend of the chart. If the security is in an uptrend, the online trader will "go long" that security by buying shares, call options, or futures contracts. If the overall trend is down, then the trader could short shares or futures contracts, or buy put options.
Trending stocks rarely move in a straight line, but instead in a step-like pattern. For example, a stock might go up for several days, followed by a few steps back during the next few days before heading north again. If several of these zig-zag patterns are strung together, and the chart appears to be moving higher with some degree of predictability, the stock is said to be in an uptrend.