Day Trading Defined Day trading is the activity of buying and selling financial instruments (stocks, bonds, options, futures or commodities) with the intent of profiting from price movements in the underlying security within a single trading day. While positions may...
Day Trading Encyclopedia
Day Trading Encyclopedia
Support and Resistance
Charts visualize support and resistance levels. These are price levels that consistently reject attempts to exceed above (resistance) or below (support). Supports are a price level that the stock will not fall below. Resistance is a price level that the stock can’t...
Balance Sheets
The balance sheet is a summary of the company’s individual and total financial balances. A balance sheet is composed of three parts: assets, liabilities and shareholder equity. Assets Assets are tangible items like cash, property, inventory and securities. They are...
Form 4
What it is After filing a Form 144, if the seller proceeds to sell shares, then they must file a Form 4 with the SEC documenting the number of shares sold and the price range. All directors and officers as well as shareholders that own more than 10% of the outstanding...
Stock Share Structure
Importance of Understanding a Stock’s Structure One of the facets of trading that is often overlooked when performing fundamental and technical analysis is a company’s stock structure. A stock’s structure pertains to how the shares of a public corporation are set up....
Day Trading Goals
Goals of Day Trading The goal of day trading is to generate profits from the price action of the underlying financial instrument in the shortest period of time. This is often accomplished with the use of margin. The use of leverage can magnify the gains from...
Trend Lines
To better visualize the trend, trading range, support and resistance levels on a chart, traders commonly use trend lines. Most platforms have trend line features to draw them manually and some even have the software draw them in automatically. Automatic trend lines...
Income Statements
The income statement shows the profit or loss generated for a specific period of operations. The statement reports total revenues minus cost of revenues to determine the gross profit. The itemized operating expenses including research and development, selling, general...
Penny Stocks
What are Penny Stocks? While the SEC defines penny stocks as those priced under $5 per share. Usually priced under $3 per share and mostly under $1 a share, these are the most speculative type of stocks in the publicly traded markets. The landscape of penny stocks can...
Stock Options Trading
Options contracts give the holder the right, not obligation, to buy or sell the underlying security at a selected strike price up to the expiration date. Since options are derivatives, they allow the holder to benefit from the upside of the underlying stock’s price...
Day Trading vs. Investing
Difference Between Day Trading and Investing Timeframes The main differences between day trading and investing are the activity levels and position holding times. Day trading involves active management with a short-term holding period, whereas investing involves...
Triangle Chart Patterns
Triangle Patterns Triangles are known as continuation patterns, meaning the trend stalls out to gather steam before the next breakout or breakdown. They are named triangles as the upper and lower trend line eventually meet to form a tip and connecting the starting...
Cash Flow Statements
The cash flow statement illustrates how much cash has come into and gone out of the company for the quarter. This section is composed of three parts: operating activities, investing activities and financing activities. Operating Activities Operating activities...
After Hours Trading
What is After Hours Trading? U.S. equities markets officially close at 4pm EST. However, access to trading stocks still continues until 8pm est. through various electronic communication networks (ECN) and exchanges. The period from 4:01pm to 8pm EST. is considered the...
Money Flow Index
The money flow index is an oscillator that measures the momentum of the inflows and outflows of money for a stock over a specified period of time. It is a technical analysis charting tool found on most trading platforms. How to Use the Money Flow Index Like any...
Trading Styles
While most traders share the same goals, they achieve these goals using a variety of different trading styles. Trading styles can be molded to fit a trader's time restrictions, profit goals, and personal strengths. There is not one trading style that is better than...
Wedge Chart Patterns
Wedge Patterns Wedge patterns are trend reversal patterns. They are composed of the support and resistance trend lines that move in the same direction as the channel gets narrower, until one of the trend lines get broken and reverse the immediate trend on heavy...
Accounting Ratios
These are the popular quick metrics that traders can pull up immediately through a trading platform or numerous Internet sites. The ratios allow for any trader or investor to quickly do a peer or market benchmark comparison to determine how the valuation stands in the...
Pre-Market Trading
What is Pre-Market Trading? Depending on your broker, ECN pre-market trading starts as early as 4am EST. The ‘normal’ access pre-market then starts at 8am EST., as which point more liquidity and volume comes into the market, until the official market trading open at...
Stock Market History
Stock Market History The United States stock markets recognized as the most liquid and widely followed equities markets in the world. Where the US markets go, the world markets tend to follow. It is a bell weather and benchmark that still leads the world in terms in...
