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Dogecoin Makes it Big for the Little Guys

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by: Kathryn Jones

January 29, 2021, may just be a date never to be forgotten in day trading. A cryptocurrency surge of more than 800 percent occurred in just twenty-four hours. No mistake. With the run-up of GameStop stock and Dogecoin crypto, investors were swarming for a taste of the sweet nectar.

The boost soared after the social media group, WallStreetBets “managed to drive the share price of video game retailer GameStop from US $20 to $350 in mere days” (Channelnewsasia.com). In short, when WallStreetBets, a Reddit social media group, rallied their followers to buy-in, they did.

CNN Business reports that at least one Reddit user “paid off thousands of dollars in student loans with his GameStop gains.” In short, by coordinating their efforts to drive up the share price of companies who are struggling, many investors garnered more than a few bucks.

Roaring Kitty, a Reddit user whose real name is Keith Gill, attracted a lot of interest in his post “depicting a single $53,000 investment in the video-game retailer GameStop” according to NYTimes.com. Though some seeing his post laughed at his investment, Gill continued to post. During the next year, he tweeted about GameStop, produced videos on the topic, and began to Livestream his financial ideas. Interested readers became followers. And followers placed their bets.

According to some, Dogecoin may just be the next bitcoin for the “little guy”. For the first time since the Dogecoin was launched in 2013 as a Bitcoin, cryptocurrency, which has outlived “almost all the early derivative altcoins” (NewsAsia.com) makes real ‘cents’ for more than just the Wall Street investors and their hedge funds.

Those in social media Reddit or YouTube groups who use free trading platforms like Robinhood or WeBull, and gather together as one in their various arm-chairs to day trade, might just make it as the next millionaires. At the very least, they’ll be able to shave off some unwanted debt.

Everything Forex Trading Part I of II

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The Foreign Exchange is also knows as currency trading, Forex, or simply FX. In Forex trading every currency worldwide is traded in a global market. With an average trading volume of $5 trillion per day, it is the most liquid and largest market. All stock markets combined don’t even come close to this number.

With such high volume of trading, you may find some great oportunities for yourself in the forex market.

A single USD on any given day could get you 1.1 CAD. The very next day this USD could get you 1.15 CAD. Small changes such can these might not seem like they’d make a difference, but when put on a large scale, the significance becomes apparent.

Lets use an example of a company who pays employees overseas. Imagine what currency exchange rate could do to the company’s bottom line. Lets say for example, they are exchanging one currency for another that is at a higher value. It would be beneficial for the company to make their trade on a day when the exchange rate is lower. If the company needed to exchange USD to CAD, using the example above, it would greatly benefit the company to make their exchange on the day where CAD is 1.1 rather than 1.15. Pennies will add up quick when on a large scale.

Like being a business owner or traveler, when trading forex, you will want to make trades with the knowledge of when exchange rates will change to receive a more favorable rate.

FOREIGN TRANSACTIONS

Foreign transactions in the market are similar to what you may have done if you’ve traveled abroad. A trip north across the border and you are converting USD into CAD. The exchange rate between the two currencies is based on supply and demand. This is what determines how many CAD you get for you USD and the rate of this exchange is constantly fluctuating.

OPPORTUNITIES IN FOREX: WHAT’S YOUR OPINION?

Like stocks, currencies are traded based on what is their assumed value and what direction that value is headed.

The big difference in forex vs stocks is that trading up is done as easily as trading down. Because the market is so large it is easy to find a buyer or seller for the currency you have your eye on. Based on what foreign news you hear, you can decide the value of certain currency and then buy or sell as you see fit.

If you hear news that will cause the CAD to lose value then you would sell your CAD against another currency. The more the CAD depreciates agains the currency you sell it against, the more profit you make. If the CAD begins to regain value then you begin to lose profit and should quickly get out of the trade.

Read more about how to buy and sell currency as well as information on trading on margin in Everything Forex Trading Part II…

Helpful Hints on Day Trading Gas-Related Stocks

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Don’t Ignore Fundamental Analysis

Day Trading Gas related stocks will be much more profitable when you pay attention to fundemental analysis. Fundamental analysis is often left out of day trading, but this not always a good thing. Fundamental analysis is helpful in industries that affected by macro-level events.

Gas stocks is the perfect example of this. Because gas prices are a commodity, they are easily affected by numerous factors. Current events in gas-extracting areas will affect gas stock. The demand of a commodity by such as gas will also determine the price and stock.

In 2017 the US produced 20% of the total worldwide. The US is pretty stable and doesn’t cause much volatility in the market. Other big names in gas production, such as Iran and Russia.

Iran, for example, is under restraints of the newly re-instated US government sanctions. This will make it tough for Iran to take full advantage of its ability to produce.

Keep Up With Current Events

The rapid rate of events surrounding gas allows day traders to jump in and make money from the consistent changes in gas-extracting countries.

On April 22, Natural Gas Futures increased from $2.490 to $2.526. It was around this time that reports of US sections on Iran began. As evidence became more solid that sanctions would indeed be placed, the price of Gas Futures continued to increase. This price increase is created due to the lack of supply expected from Iran and an overall high demand.

The price of gas affects a variety of industries and companies. Revenue declines when companies have pay higher prices. So, gas futures will fluctuate in price as well as the price of certain company stock.

Value the Big Picture

It is so important to be aware of what is happening when day trading gas related stock. You should study the history at large and pay close attention to current events. It will be vey helpful to study and be familiar with the regions that export/import the highest amounts of gas. If you understand the background, it will be so much easier to read the market and know what developments are important.

Understanding the big picture will allow you to see trends to help you day trade gas related stock. Look at developments in importing/exporting countries the same way you would look at stock indexes and ETFs. This will help you understand how to get the most success from Gas-related Stocks.


Day Trading: How to Know when to Buy or Sell

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How are you supposed to know when to buy or sell?

The overall goal of Day Trading is to exploit small movements in individual assets. The first big step towards this goal is knowing what to buy and when to buy it.

Looking at the liquidity, volatility and Trading Volume of an asset will help you asses if a trade is both profitable and right for you. Below you will see descriptions of what these things are, and learn how they can lead you to success. 

The first thing on the list to look at is the Liquidity of the asset.

Liquidity is what will allow you to enter and exit the trade at a favorable price.

Two things to note when assessing Liquidity are Spread. Liquidity is the difference between bid and ask. Slippage is the difference between the expected price of a trade and the actual price at which the trade is executed. You want to look for a tight spread and a low slippage.

Volatility is The next thing you will want to take into consideration when looking what to buy and sell.

The volatility will help you know when to buy.  It gives information on the expected price range. When Day Trading, a larger range in price will mean greater volatility.  This will result in either greater profit or greater loss.

Don’t forget to look at the Trading volume.

The trading volume is what tells us how many times a certain stock has been bought and sold. Volume is measured over a specific amount of time.  

If the trading volume is high this means a stock has a lot of interest. An increase in volume it is usually a sign of a price jump. After looking for this dumb you can better asses your trade. 

In Conclusion
These three things will help you a lot as you begin to decide when to buy and sell. Knowing how to observe the Liquidity, Volatility and Trading Volume  will be a great help to you as you get started in the world of Day Trading. 
 

Day Trading: 3 Tips on Deciding When to Sell

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Deciding when to sell is a key element to being profitable when Day Trading.

There are many ways for you to approach an exit and come out in a winning position. Four ways to do this is to use profit targets, daily pivots and momentum.

The most commonly used exit method is probably using profit targets. When using profit targets, you are exiting at a pre-set level.

There are strategies to help when choosing profit targets. Of these strategies, Scalping is the most used. When scalping you are selling right after the trade becomes profitable. The Profit target when scalping is whenever the trade begins to make you money.

Another strategy using profit targets is Fading. Fading is involving shorting stocks right after they begin to take an upward turn.

When using this technique, you are assuming three things. First you assume the assets overbought. You also must assume that those who bought early are ready to take their profits. Last, assume that those who are currently buying may be scared off the trade.

Fading is a risky strategy but can really pay off when successful. What you are watching for when implementing this selling strategy, is signs that the buyers are stepping back in. This will give you your price target.

Daily Pivots is our next usefully strategy when deciding when to sell. Daily pivots is benefiting from the asset’s volatility.

Profiting from Volatility is achieved by buying when the price is the lowest and selling when the price is at it’s highest point. You’re price target when using daily pivots is when you see a reversal begin.

Using Momentum of a trade can be very beneficial for traders. This involves research. Knowing which trades will be trending and popular puts traders ahead. Reading news articles and staying up to day on current events will help you know which way the market is moving and allow you to strategize successful trades.

One way to trade using Momentum is to buy based on news releases and then sell when the trend turns. There is also another popular way to trade using momentum. This is to fade a price surge. When fading a price surge your price target is when the volume of the asset begins to lower.

Defining a strategy when deciding when to sell is important. Your strategy should be repeatable and tested. This will lead to success when Day Trading.

Day Trading: How To Minimize Risk

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The risk of Day Trading is not breaking news. One of the best ways to minimize Day Trading Risk is to use stop-loss orders. For long positions, you can use a stop loss order to make sure your loss on certain stocks is not greater than a set number.

Let’s look at an example:

You have 20 shares at 20$ a piece and you are only willing to lose 2$ per share. This means you will place a stop loss at 18$. This way, if your stock plummets to 5$ a share you are not risking a loss of 15$ per share.

A good strategy to limit Losses when day trading is to set a physical stop-loss order, but to also set a mental stop-loss. The physical stop loss is going to physically limit how much you can lose. Your mental stop-loss will put you in a spot where you can immediately exit your position if you trade makes a turn.
 We also recommend setting an amount that you are willing to risk each day. This will minimize your risk for big losses in a single days time. Setting this limit for yourself will help you trade with a clear mind.

If you feel your chosen strategy lines up with your risk limit, then you should begin trying it out. Trying your strategy with paper trade is a great way to feel more confident. Analyze your paper trades and make notes on where you feel your were profitable and where your expectations were either met or not quite met.

The next step will be using a demo trade account that using real market information. Give yourself some time to work with movement in these demo accounts before moving on.

Make sure while practicing, that you are doing your homework. Look at historical charts, making note on where your stop loss would be hit or where your target would be hit. If after research and trial runs you feel your account has been profitable, then it is time to move forward.

If you find you have lost capitol, then change your strategy and try again. Do not start a new strategy on a real account. Be patient and do it right. This will minimize your losses.

Day Trading Futures: Pros and Cons

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The Pros

Day Trading is great because all trades are completed when the market closes for the day.

Futures usually open at a price that is very different from where they end. Volatility means you can fall asleep at night in a winning position, and wake up at a loss. Day Trading provides rest from this risk. Literal rest. A good nights sleep.

There is no overnight risk with Day Trading, which is one of it’s biggest Pros.

There is a lot to learn when entering the trading world.

Day Trading is like an accelerated learning course in trading. You’ll make more trades in a day than position traders. This will help you learn quickly what is necessary for success. You’ll

The Cons

It takes great discipline to day trade. It can be vey difficult to stay the course and not over reach. Many who try out day trading find themselves overreaching and over trading.

Commissions can also be an issue when Day Trading. It is very possible to break even, but have a big commission bill at the end of the year. To make money day trading you have to make many winning trades.

A Word On Volatility

Short term trading can outweigh long term investing in certain situations. Volatility of the market will determine which approach is most favorable.

In a highly volatile market, prices are moving up and down frantically. This is what you want to look for. The high volatility allows you to buy and sell for profit within a days time. A stagnant market is a no go for day traders.

Day Trading takes a lot of preparation, education and discipline. It can me really difficult to make money Day Trading. It is crucial that you treat it seriously and dedicate proper time.

However, if you do your research and map out a game plan, Day Trading can be a very rewarding.

10 Tips for Day Trading Success: Part 2

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Welcome to DayTradeFEED.net’s 10 Tips for Day Trading Success: Part 2. Make sure you don’t miss out on the tips we discussed In 10 Tips for Day Trading Success: Part 1

Tip #6 Timing is Everything

The majority of orders are made in the market’s first thing in the morning.  This helps contribute to the market’s volatility which Day Traders thrive off of. With practice you may be able to see the market patters and pick the best times to make trades, but for beginners its better to wait a 20 minutes or so before making your first move.
During the middle of the day, the market is more stable, but towards the end of the day there is another volatile period before markets close. The volatility of early morning and late afternoon markets are tempting as they provide more opportunity, but we caution beginners to avoid them until more knowledgeable.

7. Use Limit Orders

Figure out your enter and exit strategies. You may use Market Orders which are fast and reliable, or Limit Orders that will give you more control over the execution price. I
If you choose to use a market order there will be no price guarantee as it is executed at the best price available at the time. Going the route of limit orders, however, will give a guarantee on the price but not necessarily the execution meaning the trade may not go through at all.

8. Patience is a Virtue

Whatever strategies you use, make sure you are patient and consistent. Your strategies may not work every single time but the average will lead to day trading success. It is not uncommon for professional Day Traders to win only 50% or 60% of their trades. Be sure that you are limiting your risk, and your methods very well outlined.

9. Keep your Cool

There will absolutely be times when the stock markets get at your nerves. To see success when day trading you have to trade without emotions. Don’t let things like hope, fear and greed influence your decisions. You will be most profitable in you make moves based on logic.

10. Keep on Keepin on

It is important to move fast if you want to be a Successful day trader. Moving fast, however, does not have to be stressful. You’ve now read the first 9 tips, and you understand what its going to take to be profitable. Get your strategy locked in. Practice patience and discipline. If you do these things, there will be no need for stress and anxiety.
Don’t forget he Day Trader’s mantra: “Plan your trade and trade your plan.”