One of the toughest occupations to define is that of a trader. There are countless variations on methods for trading the ES Emini contract. Most forms of trading differ in the length of time the trader holds a given contract. Of course, all traders attempt to accomplish the same goal: profit by moves in the market. It is simply the manner in which traders quantify moves in the market the delineates them from each other.

Before I continue much further, I should state that I am a dedicated scalper. I never hold contracts overnight, and my average trade seldom lasts more than twenty minutes. I am looking to snatch small 2-3 point moves in the market and cash in on them. Generally speaking, I am unconcerned about the fundamentals of the market and concentrate solely on trading the chart in front of me, with little consideration for what the market is going to do tomorrow, next week or next year. My time frame in trading is strictly “now.”

Scalp trading is about making many small gains throughout the day and never about trying to hit a “home run” on a trade. Scalpers also rely heavily upon technical indicators and thus, most scalpers are experienced traders. Scalp traders risks are minimal and are an effective use of trading capital since this method of trading usually generates more winning trades than traditional day trading. Scalpers generally run very tight stops and limits and are extremely risk averse. I would also point out that beginning traders can make use of scalping techniques. I point novice traders in the direction of scalping because of the lower risks involved with this style of trading. Still, even Scalping takes a high level of self discipline to be successful.

One component of scalping that is often overlooked is the high degree of concentration that is required to scalp effectively. The chance to make sizeable gains sometimes comes rapidly and the trader has to be prepared to exit his trade when the correct opportunity rises…because you may only get once chance to make the winning trade in a given trading sequence.

The technical indicators most scalpers use vary widely from trader to trader, and are generally not shared with others. It is sort of like having a great fishing spot and not wanting to share it with an army of fisherman who would fish it out quickly. Generally speaking though, scalpers use momentum indicators set to very short time periods. The CCI, MACD, Stochastic indicator and RSI are all common oscillators the scalper utilizes in various capacities. Of course, support and resistance are among the most important tools the scalper uses, along with pivot points and theoretical support and resistance calculated from the pivot point.

It takes some practice, but scalping can be as profitable as any trading method, and there are a lot less headaches. You don’t lose any sleep on overnight trades because you never have a trade overnight. It is my style of choice.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

STOCHASTIC MACD TRADERS

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Investors looking to remove the emotion associated with trading their hard-earned dollars need to rely heavily on price and volume patterns as well as other technical indicators. Three of the most well-known technical indicators will be discussed here, each of which can provide support for a new trading decision or hints as to where one might find a trading opportunity.

The three most popular technical analysis indicators are:

1. Moving Average. The moving average (or MA) provides insight as to the whether the underlying security (be it a stock or commodity). Depending on the average being used, the specific point where the security is trading could be considered overbought or oversold and can make or break a trading position. Obviously, traders will enter a position with caution if the moving average does not support the security price. With that said, the Moving Average is considered one of the most heavily relied upon technical indicators.

2. Bollinger Bands. Bollinger Bands us a moving average as well as the security’s standard deviation to provide a visual representation of the range in which a security price should trade. These three lines represent the high, mid, and low point where the security should be. Obviously, if the security finds itself trading at or above the high band, then a trader is more apt to steer clear of going long. Likewise, if the security is trading below the lower band it is quite likely he or she will avoid a short position.

3. Head and Shoulders Formation. As a classic technical indicator, the head and shoulders formation is one of the most reliable tools in the technical analyst’s toolbox. Given its highly reliable nature, many traders will positions based on this indicator alone. Briefly, the head and shoulders formation is a series of three peaks or valleys (depending on whether it is a bullish or bearish indicator) that has added strength based on the underlying security’s volume patterns.

Despite technical analysis removing the emotion from any given trade, it does not stand on its own in terms of whether to buy long or sell short. Investors still need to rely on fundamental analysis to support their trading decisions. Much of this fundamental information can be located for free online.

–> Learn Technical Analysis Free at Online Trader Today dot com.

Chris has more than 16 years of financial services experience. He is currently an online marketer specializing in niche websites like Hair-Salon-Furniture dot com, a website specializing in information about Hair Salon Furniture.

What happened to gold?

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How do you tell if an indicator is relevant for a particular market / stock?

I have seen that some indicators (e.g. RSI, MACD) work very well for certain stocks, while others work horribly.

technical analysts use & apply all the possible indicators first & then they choose which is accurate & having higher probability of returns

WHAT IS THE MACD INDICATOR

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