TRADINGSIM DAY TRADING BLOG

Welcome to the Tradingsim Blog.  Please browse the various trading categories which cover everything from trading psychology to chart patterns.  Another great resource we offer is our trading simulator which allows you to practice placing trades against real historical tick data.

Why you must try the Tradingsim demo app NOW

tradingsim demo app

Guys, hope your trading well out there. This is great market environment to be trading in as we are seeing a ton of volatility on a daily basis. However, volatility can be a gift or a curse. The biggest mistake that many novice traders make is not recognizing change. What do I mean by that? Read the full article →

How to Trade the Abandoned Baby Candlestick Pattern

abandoned_baby

We have discussed a number of candlestick patterns on the Tradingsim blog and today I have the pleasure of diving into a rare pattern known for its reliability. Abandoned Baby Definition The abandoned baby candlestick formation is a three bar reversal pattern that is similar to the morning and evening star formations and is a Read the full article →

Opening Bell – 2 Simple Trading Strategies

Fade the Morning Gap

In this article, I will cover two basic trading strategies you can utilize during the market open.  But first, let’s discuss what drives the madness shortly after the opening bell. Like many other newbie traders, I thought, “the money is in the morning!!”. Well, yes and no. If you have a few thousand day trades Read the full article →

Basics of Equity Trading

Support and Resistance Levels

What is Equities Trading? The term equity trading and stock trading are sometimes used synonymously; however, there are a few minor differences between the two. Let’s start with the basic definition; equity trading is essentially the purchase or sale of company stock through one of the major stock exchanges, just as stock trading is. An Read the full article →

Days to Cover and Short Squeezes

days-to-cover

Definition of Days to Cover Days to cover is a formula which tracks the number of shares short in the market relative to the available float.  This allows a trader to see how bearish or bullish traders are on a security.  The last component of the ratio is the amount of daily volume.  If you Read the full article →

How to Trade the Stick Sandwich – Candlestick Pattern

bearish-stick-sandwich1

Stick Sandwich Definition The stick sandwich pattern can occur in both bull and bear markets. The stick sandwich pattern consists of three candlesticks, where one candlestick has an opposite colored candlestick on both sides. The closing prices of the two candlesticks that surround the opposite colored candlestick must be same. Bearish Stick Sandwich Charting Example Read the full article →

Day Trading Money Management – Rules that Work

Money Management Trading Example

Day Trading Money Management Day trading as a business can be very profitable. It is probably the safest form of investing, as you are focusing on a small number of positions, you are not holding any positions overnight and you are able to enter and exit trades with pinpoint accuracy. However, many day traders find Read the full article →

How to Trade with the Tick Index – 2 Simple Strategies

tick

Many of the technical indicators discussed on the Tradingsim blog deal with assessing a particular stock or ETF. However, in this article we will cover the tick index, which is a broad market momentum indicator used to gauge the strength of the underlying securities of the NYSE. The tick index is important, as it will Read the full article →

How to Day Trade Morning Gaps

Day Trading Morning Gaps

A picture is worth a thousand words and nothing will wake you up quite like a morning gap! The gap has the amazing ability of taking the breath right out of swing traders and long-term investors as they scramble to assess the pre-market and early morning trading activity. In this article, we will discuss how Read the full article →

Take Profits – one of the biggest misconceptions on Wall Street

Hold Strategy

Taking Profits – Definition When you start out in the trading game, you often will hear a number of pearls of wisdom. Keep your losses small, let your winners run, no one ever went broke taking profits. These anecdotes make trading sound so easy. One of the biggest reasons for so many losing traders on Read the full article →

Simple Strategy for Trading Gap Pullbacks

Gap Pullback Strategy

Our next strategy, the gap pullback buy, is one of my favorite setups.  It allows us to let the morning action play out and enter into a trade with a strong setup and relatively low amounts of risk. Trading Characteristics of a Gap Pullback Buy The gap pullback buy is predicated on the concept that Read the full article →

2 Simple Fibonacci Trading Strategies

Fibonacci Alligator

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377…do these numbers look familiar to you? Not really, right? If not, then you definitely need to read the following material. These numbers are the root of one of the most important techniques for determining psychological levels in life and in Read the full article →

How to Trade Early Morning Range Breakouts

Early Morning Range Breakout

Every day trading system conforms to intraday breakouts. The reason for this is that in many cases a breakout could predetermine the future price behavior. Thus, traders use breakouts to set entry points and exit targets for their trades. In this article, we will cover four strategies for how to trade early morning range breakouts Read the full article →

Learn How to Scalp Trade with this Simple Strategy

Stochastic Scalp Strategy

We have discussed numerous trading strategies on the Tradingsim blog.  From the very basic, to the ultra-complicated. Today we are going to cover one of the most widely known, but misunderstood strategies – scalp trading, a.k.a scalping.  If you like entering and closing trades in a short period of time, then this article will definitely Read the full article →

Day Trade Setup – Three Bar Reversal and Go

three-bar-reversal-and-go

Day Trading Setup – Three Bar Reversal and Go This article is going to discuss a very simple, yet powerful day trading strategy that is used to capitalize off the greed and fear from novice traders. I refer to this setup as the “three bar reversal and go”; it can be described as a stock that Read the full article →

Tradingsim University

Tradingsim University

The Tradingsim University provides you a framework for how to use the Tradingsim Platform.  Each module focuses on topics that are key to successful day trading.  This is not a race!  Take your team going through each lesson, while using the Tradingsim Platform in order to take your trading to the next level. Much Success, Al Read the full article →

5 Reasons it’s a Bad Idea to Hold Day Trades Overnight

Gap Chart

Are you a day trader? Have you ever considered holding your day trades overnight? Although many traders and investors conduct this practice, today I will explain to you why it is a bad idea if you are day trading. Day Trading What is a day trade? Day trading is when you open and close your Read the full article →

Price Channels versus Bollinger Bands

Three Types of Price Channels

Today we are going to discuss two important tools for identifying support and resistance on any chart – introducing price channels and bollinger bands!  During the course of this article, we will cover the details of each approach and provide a recommendation of which best suits your trading style. What are price channels? Price channels Read the full article →

5 Trading Strategies Using the MACD

MACD Indicator

Are you an indicator trader? If yes, then you will enjoy reading about one of the most widely used trading tools – the moving average convergence divergence (MACD). Today, we will cover 5 trading strategies using the indicator and how you can implement these methodologies within your own trading systems. What is the MACD? The MACD Read the full article →

How to Trade Head and Shoulders Tops and Bottoms

head and shoulders top

What are head and shoulders patterns? Head and shoulders tops and bottoms are reversal chart patterns, which can develop at the end of bullish or bearish trends. Traders like to trade head and shoulders formations as the price targets are very predictable and the formation has an overall success rate greater than 70%. What do Read the full article →

How to Trade Rising and Falling Wedges

Rising Wedge

What are rising and falling wedges? Rising and falling wedges are a technical chart pattern used to predict trend continuations and trend reversals. In many cases, when the market is trending, a wedge will develop on the chart. This wedge could be either rising or falling. Wedges can also appear at the end of a Read the full article →

Alligator Indicator versus the Triple EMA

Alligator Indicator

If you are a fan of trading with moving averages and unfamiliar with the alligator indicator, get ready for a pleasant surprise.   In this article, we are going to do a head-to-head comparison of the Alligator indicator with the triple EMA (TEMA) to see which one comes out on top. What is the Alligator indicator? Read the full article →

How to Trade Triple Bottoms and Triple Tops

Triple Top

If you are a fan of classic chart patterns, look no further as we will cover two of the most reliable chart formations in this article. What are triple bottoms and triple tops? If you see the price of a stock hitting the same resistance level three times in a row, you have a triple Read the full article →

3 Ways to Spot Trend Reversals with the Mass Index

Theory Behind the Mass Index Indicator

If you carefully observe any bar chart, you can see that even when the stock price is trending upwards or downwards, the price is actually ranging. The only difference between trending and ranging markets is the direction of the range. Once you draw an equidistant channel on any price chart, the ranging nature of price Read the full article →

5 Trading Strategies Using the Relative Vigor Index

Relative Vigor Index

What is the Relative Vigor Index? The Relative Vigor Index (RVI or RVGI) is a technical indicator, which anticipates changes in market trends.  Many day traders consider the RVI a “first cousin” of the Stochastic Oscillator due to the similarities in their formulas (both use the open, close, high and low of each candlestick). Since Read the full article →

5 Ways the True Strength Index Keeps you in Winning Trades

Figure 1: True Strength Index 0 Line Cross Suggests Change in the Momentum

The True Strength Index (TSI) is a technical indicator that was developed by William Blau in the early 1990’s. While there are many applications for the True Strength Index, professional traders use the TSI indicator to gauge the strength of a trend.  The TSI is better suited for trade management instead and not providing entry Read the full article →

TRIX – Standard Momentum Oscillator or Something More?

TRIX

What is the TRIX indicator? The TRIX indicator is a momentum oscillator, which assists traders by identifying trending markets and price reversals. The TRIX indicator consists of three major components: horizontal zero line. the TRIX itself, which oscillates above and below the zero line. at the right side of the indicator, you are likely to Read the full article →

3 Trading Indicators to Combine with the Klinger Oscillator

Klinger Volume Oscillator

What is the Klinger Volume Oscillator? The Klinger Volume Oscillator (KVO or KO) is a volume-based indicator, which assists traders to identify a longer-term view of price trends.  Since the KVO is a leading indicator (oscillator), it is not a great standalone trading tool. For this reason, traders often combine the KVO with other trading Read the full article →

7 Reasons Day Traders Love the VWAP

Figure 1: Price of AAPL Compared to Its 5-Minute VWAP

If you are wondering what is the VWAP, then wait no more. VWAP stands for Volume Weighted Average Price and is used to identify the true average price of a stock by factoring volume into the equation. Finding the average price based on closing value of a security will not give you an accurate picture Read the full article →

Tricks You Can Use to Successfully Day Trade with the Williams %R Indicator

Figure 1: Comparing Williams %R and (fast) Stochastic Oscillator

If you are interested in short-term trading such as day trading based on technical analysis, then you would have probably heard about the Williams %R indicator. Pronounced as Percent R, the indicator was invented by famous technical analyst and charting enthusiast Larry Williams. The Williams %R is essentially a momentum indicator, which gauges if a Read the full article →

Ease of Movement Indicator (EMV) – The Best Way to Interpret Price Action

EMV Indicator

What is the Ease of Movement Indicator? The Ease of Movement (EMV) is an oscillator, which analyzes the relationship between price and trading volume.  The EMV has an uncanny ability to identify price inefficiencies in the absence of market volume. The EMV is often represented as a curved line, which bounces above and below zero.  Read the full article →

4 Tips for How to Trade Leveraged ETFs with the Directional Movement Index

Figure 1: The Volatility of VelocityShares 3X Long Crude ETN (UWTI) Can Be Very High

Just like regular exchange traded funds, a leveraged ETF can get you exposure to a particular sector, but as the name suggests, it uses built in leverage to maximize or minimize the exposure, depending on the directional movement of the market. Hence, before you endeavor to trade leveraged ETFs, please remember that it can be Read the full article →

4 Simple Ways to Trade with the Volume Weighted Moving Average (VWMA)

VWMA versus SMA

As stated in its name, the volume weighted moving average (VWMA) is similar to the simple moving average; however, the VWMA places more emphasis on the volume recorded for each period.  A period is defined as the time interval preferred by the respective trader (i.e, 5, 15, 30). Therefore, if you place a 20-period simple Read the full article →

Ichimoku Cloud Breakout Trading Strategy – it’s not as complicated as it looks

Intel Price Chart

What is the Ichimoku Cloud? The Ichimoku Cloud, also known as Ichimoku Kino Hyo is a technical indicator, which consists of five moving averages and a “cloud” formed by two of the averages. The default parameters of Ichimoku Cloud are 9, 26, 52, but these parameters are configurable based on the preferences of the trader. Read the full article →