How to Spot Profitable Trade Potential
Are there any day traders that are NOT in the activity for a profit? That certainly wouldn’t make a lot of sense – all investors and day traders are looking for long-term payoffs, short-term small gains that combine to provide a reasonable rate of return, or perhaps the “big one” that significantly boosts your bank account. The challenge of course is locating trades with profit potential and avoiding losses.
Some experienced day traders have a strategy that combines observation with analysis of the markets they choose to trade in. This method actually can be utilized across market segments so that your exposure to any particular segment experiences the same advantages as long-term investors achieve through diversification.
Recognizing setups is a method many traders use to trigger buys. Setups are conditions where a combination of indexes and trends can indicate to you that moves can be anticipated in the very short term making it the right time for a buy. Watching the activities of professional or commercial traders can be part of the equation for recognizing trends. Another component is a trader’s technical analysis that reveals trends for any individual stock, future, currency, or whatever vehicle you lean toward with your investment strategy.
Participating in multiple markets with this technique can open trading opportunities that allow any trader to test the validity of this approach in segments previously not explored. Since profitable setups don’t always present themselves, many day traders will participate in other trading efforts while also scanning for potentially profitable setups.
Setups and Profitable Trades
Monitoring professional trader patterns can point the way to a setup opportunity. Trends exercised by such investors can lead the way toward market vehicles warranting your own analysis for prospective buy orders. Combining commercial activity with your trend or index analysis, then factoring in any relevant news items that could potentially impact that particular investment will give you the signal that a setup is presenting itself.
When trading with this strategy, it’s important to incorporate stops on your trade. Since trades based on this methodology could of course turn negative quickly you want to limit your potential losses when that scenario presents itself. On the plus side, when the setup goes as you expected, the gains can be nearly immediate and significant.
Utilize analysis charts that you understand and have had good results with in the past to help you spot setups with the most potential for profitability for you. This method is actually custom-made for day trading since it lends itself to the use of patterns combined with indicators, woven in with your individual perspective and analytical skills. It is fast-paced and volatile making it popular with day traders.
Profitable Trades with your Online Broker
Identifying and acting on setups is an activity that relies on real-time information and constant monitoring of your results. One benefit of trading with a setup strategy is that you have no risk until you spot a setup you want to move on, and make the buy. Your online broker’s availability and analysis features will benefit you greatly in boosting your bank account with this type of trading. Be certain to select an online broker that can facilitate your planned trade activity.
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Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.