Xxx Flashcards
To learn day trading basics
The best traders lose what percent of the time.
20 to 30 percent of their trades
What is a trading plan and why is it important
Rules that guide trading.
When should I break a rule that I have set for trading.
Never.
Day trading definition
Buying shares of a stock with the intent to sell on the same day.
Swing trading definition
Buying shares of stock on one day and selling on a different day .
What are stock market hours.
9.30 TO 4 PM.
Is premarket trading recommended
No because there are very little buyers or sellers around.
Describe the text boxes of the order entry window or level 2 window.
Symbol, account window,shares, exnchange ,order type box, buy,sell,short buttons,level 1 quote, ETB( easy to borrow)
Where do I place my buy / sell orders ( what screen in the day trading software)
Order entry window.
What does (day) and (stop) refer to in level 2 window.
Day means that the order will be cancelled if it is not complete by the end of the trading day.
What is level one information
The basic bid ,ask prices,market maker on the Oder entry screen. Everything below this is considered the level two information.
What are the normal hours of the stock market.
9:30 to 4 pm est
What are the premarket hours Of the stock market.
4am to 9:30 am
What are the after hours of the stock market
4 pm to 8 pm
What is float
The shares that are available for trade.(freely tradable shares). Note that there are shares that are not available for trade to the public as well.
As a day trader do we look for low or high float stocks.
Low float (. 10 million shares or less)
What is a limit order vs excecution price.
The limit price is the price we set as the most we are willing to buy or sell at. Execution price is the price that the order is filled / completed at.
Why would an order have a partial fill /3 reasons
1.i didn’t use a market order. 2, the market moved too quickly 3. My limit order was perhaps too high.
What happens if I forget to cancel an open order.
Your order will fill if the price comes to the order price.
What broker did Ross recommend
Light speed. He used two order windows on screen.
T or f . The bid is the highest price someone is willing to pay.
True
What does the order window tell us.
Information about my orders only.
What is a fundamental analysis of a stock.
A method of determining a securities intrinsic value.contrast with technical analysis.
Who uses fundamental analysis
Mostly long term investors
What is a 10 Q report.
Quarterly earnings statement
What time frame do most day traders use to find entry points
The one and five minute charts
Look at a stock chart on google or somewhere else and change the timeframes
Do it
In which direction do we read charts.
From right to left.
What creates a gap on a daily chart.
1.a large candle/ 2. A candle that loses much higher or lower than the previous day/3. A candle that closes much higher or lower than the previous day.
What causes a stock to open higher or lower than it did the previous day.
- News of some type / 2. Overall strength or weakness in the market / 3.an imbalance between buyers and sellers.
How large does a gap or window have to be to be considered worth watching
At least 2 x the daily range.
What does otcmkt mean.
Means that a stock is a penny stock.
What is the bid price.
The highest price that someone is willing to
Green candles mean what.
Price went up during that period.
A red candlestick means what
That the price went down during the period.
What information can I get from each candle.
Open, close, high,low.
What are the five types of candles.
Hammer / inverted hammer/ Doji/long bod y / bullish engulfing candle/bearish engulfing vcandle.
What is technical analysis
A tool used to predict the future price movements of a security.
Which do I use to day trade with, technical analysis or fundamental analysis?
Technical analysis.
- what type of pattern is a triangle?( continuation /reversal/both)
- what pattern are they similar to?
- explain what is happening when a triangle is forming?
- both types.
- to rectangles( but the support and resistance lines that contain the price can be trend lines.)
- buyers are trying to push price up/ sellers are trying to pull it down.as time goes on both become more cautious and the movements in either direction become smaller and smaller until one side wins.
what are the three types of triangles?
1.ascending triangle/decending triangle/symmetrical triangle.
describe an ascending triangles?
it has a resistance line at the top that is horizontal and the support line is an uptrend line
describe an descending triangle?
opposite of a ascending triangle(
describe an symmetrical triangle?
both support and resistance are trend lines.
when a breakout occurs on an ( ascending triangle) what direction will price move?
price will move upside.
when a breakout occurs on an ( descending triangle) what direction will price move?
descending triangles are more likely to breakout to the downside.
what direction does a symmetrical triangle breakout in ?
symmetrical triangles are more likely to breakout in the direction of the original.
- where should a breakout occur for it to be valid (for a triangle pattern).
- If the breakout occurs before that point, what should I do?
- when price breaks out how far will it travel.
- 3/4 th of the way down the triangle.
- if it breaks out before the 3/4th point, it isn’t in a triangle pattern any more.
- The price will travel the distance of the widest point of the triangle
when do I trade a triangle pattern?
when a candle breaks out 3/4th the way down the pattern.
