Day Trading Secrets – What The Professionals Won’t Tell You

 Powered by Max Banner Ads 

There are some great rules winning day traders use, they use these secret rules as part of their trading technique. These rules are more or less unique to each trader, but there are certain rules that have been kept secret in the obscure environment of the trading floor. These range from daily pivot formulas to specific stocks that allegedly lead the whole market, but is there any substance in all this, or is it just superstition?

Here are some of the most profound day trading secrets that traders have been using for years!

• The value area – An area where most trading occurred on the last trading session, the calculation is a bit complex and requires both volume and price data. It is used as support/resistance for the next trading day, and floor traders often pay as much as $200 per month just for these daily numbers.

• Daily LSS pivot system – A trading technique developed by George Douglas Taylor back in the 1950’s. The credibility of this trading method remains debatable to this day.

• Leading stock indicators – Occasionally the stock market does follow some leadings stocks, but is not as straightforward as it sounds, different stocks are used as indicators in different market environments.

• The bond market – The bond markets does move contrary to the stock market, again it is not a sure fire indicator, there are times where it can be misleading.

• The day of the week factor – This theory states that certain days of the week, are more bullish or bearish than other, it’s proven by statistical back-testing.

• Weird moving averages of unknown formulas – This is the most secret of them all, some traders actually do have invented advanced formulas that can predict market movement with amazing accuracy, higher than 80%, and nobody really knows what this data is and how this data is used.

There are even more day trading secrets, but the most powerful secrets remain secrets, and even though they have been confirmed to exist, apparently they have not been available for sale to anyone. How do we know they exist? Traders have been seen on the trading floor making predictions to fellow traders, one that really blow them away! They never give away their secret, because they have dedicated their whole lives to it.

It is common sense that a floor day trader will have his own, unique secret, some of them rely on visual observation and the use of technical data, for example what good traders are present just before a move takes place? While other techniques are much more data- based, using volume, the arms index, previous highs and lows.

All of the secrets mentioned above do affect the markets on a day to day basis, but not everyday of course. For example there was one stock that influenced the whole market, that was the Merrill Lynch stock, and it did so for decades, but it no longer does! In today’s markets day traders watch other stocks, and depending on volatility and sentiment, they watch different, more relevant stocks.

If you find a mentor willing to share their day trading secrets, jump on it straight away.

This entry was posted on April 7, 2010 at April 7, 2010 and is filed under Day Trading. You can follow any responses to this entry through the RSS 2.0 feed.