However, it is not completely our faults alone. Like millions of Americans, I was convinced by the phony experts, snake oil salesmen and hucksters who get up on cable television and convince people that they have a surefire way to make them money. As nothing attracts like easy money, I opted for the plan I took the advice of these self proclaimed experts and tried investing in hot stocks, but it did not help me very much in making a balanced portfolio.

The value of my portfolio plunged when the market crashed. My wife was horribly mad when I lost half of the money I had invested. As a matter of fact, she was incredibly furious. Even though I was obviously the one who was wrong, we still engaged in many heated arguments. I also knew that money problems are the number one reason why couples split up and I worried that my wife would leave me. We both contributed money to a portfolio in which we are going to use for our childrens’ college fund.

I had no intention of investing in another stock ever again, by that point. That was before a friend talked to me about purchasing a day trading robot. I listened attentively though it had an odd name. {I was still terribly embarrassed by my previous investing failures and I was hoping to redeem myself in the eyes of my wife.|I was still feeling burned by my prior failures and did not need to further embarass myself.}

“I am not interested in anything that promises wealth in a hurry”, I remarked to my friend.

Many investors have found a day trading robot most reliable , having made millions of dollars in a few years through it. I queried him to continue and he said that the robot is simply software that assists investors to identify great deals in the market.

“Day trading,” he said, “can be a risky venture, and even the best need tools to help them avoid risk and take advantage of good deals.He explained that day trading didn’t bring the big bucks in one day. Rather, it was about making small profits dozens of times a day that added up to a solid, steady supplemental paycheck. And that, he assured me, was what a day trading robot could do for me.

The most helpful thing that day trading robot software can do is to help take emotion out of the equation. Often, both new and experienced day traders get too invested emotionally in a stock, and can’t admit when they are wrong. Consequently, they hang on to it for far too long and end up losing money. But the robot software does little more than recommend stocks that are trading for discounts to the market and tells you when to move in an out of them.

After a few more conversations with my friend, I decided to give a day trading robot a try. I bought one online and began to use it very cautiously. I made a few mistakes but then the cash started rolling in. In less than a month our portfolio is up nearly ten percent and the wife no longer makes me camp out on the couch. I owe all of my success to a robot that completes my day trading for me.

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What can a day trading robot do?

However, when I remembered my little nieces, I thought I should take a step back and inquire. I arrived at his home one weekend and asked him what was going on? I asked him why he gave up his great job that gave him a solid income and benefits. Gerald simply smiled and responded in his usual cocksure way that he knew what he was doing. At that point I nearly lost it. I told my brother I thought he was selfish and that he had to think about other people for a change. I regretted it as soon as the words came out of my mouth, but my brother simply smiled and said I was right.

{Though I had almost no interest in the stock market, Gerald pulled me aside later that evening and insisted on explaining to me why he had decided to become a day trader.} To me it was all Greek. I wasn’t really interested in day trading or the market. But my brother told me it wasn’t all black magic. He told me that there is a predictable rhyme to his reasoning.

I listened to his spiel. Day traders that were successful, he said, usually only watched one or two stocks at a time unless they use a day trading robot. It could sometimes take watching a stock for several months before deciding if it was worth it for them to trade it. All in all, it just came down to patterns. According to my brother, there are patterns on a daily basis that each stock moves on. You can’t really set your watch by these patterns, but they give a good hint to brokers about what the stock price will be in the future.

And this was how my brother made his fortune.  The way he made his money was simple. Instead of buying big, he bought small and watched his profit grow slowly over time. It was not uncommon, he said, for him to trade the same stock dozen of times a day.  Though a successful day trade yields short term results it offers chances for  repetitions during the course of a day.

This got me interested in learning how to day trade as well.Lucky for me, my brother is a great teacher, showing me what I need to study and learn how to do in order to be successful at day trading.While I do not expect to be as successful as my brother has, if I could just get proficient enough to earn some extra money that would be great.I really am glad I took the leap and learned about trading the stock market.

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The stock market can be traded

So what does it take to make a successful day trade? To begin with, you need to understand that there is no such thing as easy money. You should never go into a day trade thinking that you are going to make a million. Day trading is all about making small profits several times a day which eventually add up. A day trader that know what their doing will proceed quite cautiously on any particular day trade. Rather, they will purchase relatively small quantities of equities they know well.

How can you figure out which stocks you should trade? Most traders will select stocks that they have been following for quite some time. Having analyzed and monitored the numbers over a few a weeks a trader gets convinced to trade a stock.

Though there are a number of different strategies that day traders employ, most day trading strategies rely heavily on technical analysis. Technical stock analysis means that traders believe that he can detect patterns in the way a stock trades by looking at charts. For example, a trader may discover that a certain stock tends to move in a tight trading range most days. This may mean that a stock moves only two or three points every day. For instance, it may open the day at 33, move up to 36, and end the day at 34. A day trader closely watches these types of trades and looks for any day to day patterns in their activity.Learning to watch and pay attention to these types of regular volatility patterns will really pay off in the long term for anyone looking to day trade.The real key is to try to concentrate on just a few select stocks in the beginning so that you do not go down the path of information overload.

This method may seem easy, but it works. All a trader has to do is to concentrate on one particular stock and watch its movements each and every day. After a little while, the trader will have the confidence to make a day trade. While this strategy may not may you a millionaire overnight, it is likely that you will be able to amass small profits several times a day, which will eventually add up. In fact, some day traders trade the very same stock hundreds of times a day.  This is because they believe they have discovered the secret to the successful day trade and that the more they trade the more they will make.

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Day trading can be profitable if you learn how

The main thing to keep in mind is CURRENT MARKET CONDITIONS – I cannot stress this enough. Do not pay attention to what the indexes are doing, it is what many stocks over various sectors are doing overall and how they are trading in general. What is the general volatility level for the day, is stuff trading slow and steady or are they whipping up and down quickly on a slight move in the futures market? This makes a large difference in not only the stop placement, but in the overall risk level for the trade. Most people assess risk by the amount one can lose when using a day trading robot or just trading on their own with chart setups. What most people fail to think about is the actual odds of that loss happening.

While there is no sure fire way to figure out odds, if you watch what other stocks are trading like you can get a pretty good idea. If conditions are calm, you might be able to use a smaller stop – a 30c stop has a 30% chance of getting hit for example. When conditions are frantic, a smaller stop is almost assured to get hit – meaning the 30c stop has a 98% chance of getting hit even on the exact same name.

The way you figure the odds in a stop happening when day trading is somewhat straightforward. Look at the average range over the last 20 minutes or so, the high to the low area of the bars. Do not pick the most calm period of time, as this tends to not stay constant. If current times are super calm, go back on the chart to a more volitile period for the day (or another day) and then figure the range. It does not need to be an exact amount, we are just looking for an approximation. Once you have measured this range, this becomes your maximum risk.

What we want to do is to lower this max amount to a lesser level. This can be accomplished in 2 different ways. The first way is to study the pattern of trading behavior for that stock locallly when it reaches a prior high level – does it normally fade back or does it have momentum and push through? If it tends to push (last few times it reached a high turn point), then its ok to buy the stock on strength. If it tries to sell, or looks like a fade back – wait for it to push and then put your order in at 1/4 of the range computed, but lower than the high its at currently. So if the price range figured was 1.00, and the stock was at 40 now, you would put your order at 39.75 to go long. You will most likely miss some trades doing it this way, but have to ignore the urge to chase the prices. If a similar pattern is occurring on a lot of other stocks (in general) you have to be extra careful.

A second way to remove some of the risk is to split your entry order into 2 different parts. So if you want to buy 500 shares, only buy 200 now. Wait until it pushes a decent amount up (meaning it has pushed enought that it has moved past the fade the breakout move area), then look to add the other 300 on a 5 or 10c dip. Move your stop up .45 now (figuring you have a 1.00 stop to start) on the whole thing. The other choice if the price tends to fade after pushing higher is to buy 200 shares now and then place the balance of your order .25 above your stop price level (figuring it is 1.00). The maximum stop loss level should remain the same on all the accumulated shares. The difference here is if market conditions get poor for going long when day trading for a period of time, you are going to lose a lot more averaging when its selling because you will get filled on the add, then stopout 2 minutes later on all of it.

The easiest way around this situation is to lower your share size – when upredictability sets in, trade only 1/2 your normal size. The name of the game is preservation of capital first and foremost (hence the stops), but second its to avoid easy loss situations. While is is very difficult to actually tell that trading conditions are improving without actually trading, it is a very good idea to trade with less shares until you visibly see conditions look better over time.

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Win More With Better Stop Placement

One key advantage to a day trading robot is its ability to be unbiased and apply the same set of rules every time.  The real key is finding a day trading robot that is reliable in its stock picks and is easy to use.This is of course no easy feat, because there are a ton of impostors and stuff that used to work but now is of little use because the market changed but the robot was not able to adapt.

One key component of any day trading robot that should be essential is the ability to find stuff in real time, but give you enough time to actually act on the information it provides.  It does no good to use a day trading robot that scalps something so fast that you cannot even get an order in should you choose to follow what it is doing.You can always choose to let a day trading robot have control of your account, but a lot of traders are uncomfortable with this type of situation and like to keep control.In addition, there are always things each day that require human intervention because a day trading robot is not designed to handle that situation.

Any trader looking to make use of a day trading robot to find ideas should realize the limitiations and use it as a great tool to find additional ideas to trade.  It is unrealistic to expect a trading robot to be 95% right, or that you would turn it on, let it trade your account and miraculously you are earning 40% a month.  I can tell you 100% anyone who has such a tool would never sell it or lease it out – they would be living on a private island off the wealth it creates daily.  This does not mean day trading robots are not useful, you just need to have realistic expectations to get the maximum usefullness out of them.

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A Day Trading Robot Can Be A Valuable Asset

This does not mean throw thousands of dollars at every "hot" product - this usually does nothing to generate anything useful.Additionally, each day trader can only focus on so many things at the same time, you do not need overload as that can actually backfire and make it far worse.  Some people like to use a day trading robot to help, others like to put together a set of indicators with some basic useage rules and that works for them.You need to establish a decent regimen for finding ideas that is followed the same way each time so that ideas are considtent.Those will never be consistent or valuable in the long run because of the sporadic nature of how they are created.

When it comes to computer tools to help you, there is an additional thing to consider:  you can get a program that allows you to custom write your own rules and indicators and then apply them in real time.  This is a valid option if you are more experienced and have the knowledge of programming to get the job done.  This can be very very time consuming, and often you can spend hours or days of work only to discover that the theory you are testing is not valid and all the work is wasted.  In fact, if you go down this path, this will happen quite often but is part of the learning and development process.  Some day traders who go down this path will do part of it themselves, then get an outside person to help them finish some difficult parts.  Indicators are quite simple as far as complexity, and then you have the other end of the spectrum which is a day trading robot which usually is quite complex because of all the parts that go into creating such a tool, so plan your time accordingly.

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Trading Without Some Computer Tools Is Like Flying Blind

These are all valid points, and all play an integral part in any trade or investment. The one thing almost no one takes into account is where and how do I exit a trade, and this question is valid for a day trade, swing trade (few days or weeks), or a long term investment (3 months to multi years). I would easily argue that the exit is way more important than the entry, since that is the only way anything is locked in. You can screw up and just really buy it at the wrong time (shorting as well), and you can be assured of a loss. However, more often than not, people are pretty good at entry of stocks, assuming they are not chasing hype and have been patient with their method. The place that usually gets messed up is the exit. There are no real rules. Once you have made some money on a stock, it is easy for greed to take over. “I don’t want to sell too early, it might keep going,” or “The last time I sold when I made xx amount, I could have made 10 times that much." Every stock entry, before you even place the order, should have an exit strategy worked out.

Exit strategies can include the following, and apply to everyone from an exper to those who want to learn to trade:

1. Trailing Stop - A price below the peak gain price where you will take profits if the stock reverses and starts to sell. The trail will follow the price up higher, but usually does not move down.You can also trail the price by either a percent below peak or close, or a point value below the low of a just completed bar on a chart.

2. Scale Out - Take the investment and scale out at fixed percent gain intervals. One example (especially for investing longer term), if you own a stock and get a gain of 25%, sell 1/4 of the position. Once the price rises to a 50% gain on the balance, sell half of what you have left. You have now locked in a 25% gain on your original purchase. The balance of the position should be locked in at breakeven - which means if it starts to go against you that means you will not let it go into a loss. On the balance of the shares, if it takes off strongly after a 50% gain, look to just exit the balance and move on to another trade. For intraday trading (day trading), you will want to scale out of half the position after a run of about 1/2%, and then move up your stop to breakeven on the balance.

3. Forever Investment - If you have a stock that you really think will be a winner for the long haul, once you get a 100% gain on it you should immediately sell 1/2. Why? Because once you sell 1/2, you have done a superb thing. You have retrieved your original investment out of it, all the money, and still have 50% working. Best of all, even if the company goes bankrupt, you cannot really lose. Ever. Take the 50% you gained out, and then try to find two different ideas that may do the same. The one thing to keep in mind here is there are only very very few Walmart, Home Depot's, McDonalds etc. Even if you have locked in this part, be aware that tons of companies do superb for years, then the market changes and they bite the dust. It is super rare to find a new Proctor&Gamble or Microsoft. Most of the time you are better off to also have a "have to lock it in" price on the balance you hold, such as 200% gain etc.

4. Price Target - A fixed price from your entry price where you will exit if it gets hit. For example you might purchase a stock at 12, but be very happy if it went to 15 in a month or 2. So that is your exit. Price targets are entirely dependent on expected hold time and should grow the longer you plan to hold the stock (within reason). The thing to remember is you have to take what the stock will give you, not what your opinion of what you want the stock to do.Price targets can be made by looking at support and resistance as well.  In general, if the stock has to push a decent amount to your target, and your target you want is just beyond a resistance point, you should move the target down to underneath the resistance for a better chance of hitting it.

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4 Ways To Exit A Stock

The first 30 minutes is usually the craziest time. Stocks can have bigger swings up and down as there are not a lot of established orders from bigger funds in the market yet. It is a great time for daytrading and short term trading of stocks because of the increased volatility, but with that also comes increased risk of a stopout. Also there really is not much in terms of support and resistance created yet, but you can look at the last hour of the prior day for clues. Sometimes using a stock trading system can be of assistance when the market has increased volatility, assuming you have thoroughly researched and tracked the trading ideas it might send out.

From 10am EST until about 11:30-45 EST is prime time for trends to develop. Of course the times are not exact, but a time range where a decent, continuing trend will try to develop. Also the volatility calms down alot, making it easier to put in a stop that is closer to the actual price when day trading. For longer term investing, usually this is not the time to make a decision on entrance, its too early in the day. The exception would be an entrance based off of daily breakout of resistance or support, or some key fundimental data that is just starting to push the stock. Entry when that happens is ok during this time.

From about 11:45 until 1:15pm EST stuff usually slows down alot, and fake moves can happen. Fake moves refer to price action where something is acting weak then moves up out of nowhere and vice versa - making it easy to get stopped out. Most of this is just due to decreased volume and liquidity. Program trading bots and algorithm day trading bots love this period of time in the market. Basically they try to fade every move, or create appearance of X happening, suck some traders in, then do Y instead. This also makes it very difficult for most traders, as it will seem just when a move gets started, it abruptly ends, especially hard for those learning to trade. Of course there are enough names that do really move and keep going, but these are impossible for the most part to sort out from the ones that stop and reverse until the move is too late.

Stuff will generally pick up after 1:15 for about 45 min or so, then slow down again near 2pm EST. 2:30PM EST (for whatever reason) is a key time to watch. Countless times the market will put in a top or bottom near this time and then reverse into the close. Does it happen all the time? no. This does happen often enough that its well worth paying attention to. Volume should pick up after about 3-315 EST into the close, whether there is a 2:30 reversal or not. This is again a good time for day trading, AND its good for watching for longer term additions as you can see if the stock is holding gains, pushed above key resistance, has made a major reversal on daily chart etc.

One thing to note here, is in recent times they have shifted the 2:30pm stuff to the last 45 minutes of the day (meaning instead of 2:30pm est, they do this at 3-3:15 est).  Most of it is noticing the pattern of behavior so you can anticipate what might happen.  A big part of trading is not just knowing what trade setups happen in real time, its anticipating patterns of behavior.

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Things to Think About When Entering A Position

There are a lot of different types of stock tickers, each one with their own characteristics, but they also share numerous features. The most frequent features are the company symbol, the value of the company’s shares, and the direction in which the stock price is moving.

As mentioned, there are lots of different ticker software available for your desktop, so you too can have a tape stock ticker running on your computer. The majority of desktop stock tickers are moderately diminutive programs, that does not use a lot of RAM or CPU, so you can continue your work. Frequently the stock tickers can be configured to signal you if the price of a chosen stock move outside a predefined area or the stock price changes quickly. The desktop stock ticker can be downloaded from many of the online stock trading companies. Since the tickers often are very diminutive programs, the download and installation is rapid and easy done.

Real Time or Near Real Time?

Many free desktop stock tickers displays the stock prices in “near real-time”, meaning that the prices are postponed – most often 15 to 20 minutes. If you are a customer with an online stock trading company however, you can frequently get real-time prices – this is obviously a immense advantage, especially if you are a day trader, who buys and sells regularly the same shares though out the day. In this case you must know the exact price, since you make your money on very diminutive movements. If you are a long term investor the delayed prices are of less importance.

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Do You Dare to Buy Stocks?