If you want to maximize your revenue from scalp trading then making the most use of the “gaps” is your best course of action. Ask any seasoned trader, or in fact, even someone who doesn’t have too much experience in the field – the gap is where the money is! If you’re a newbie and confused by my lingo, there is nothing to be ashamed of. Everyone needs to learn sometimes and why later if you can start now?
Gaps Explained
So what exactly are these “gaps” which I keep referring to? Gaps, or more specifically morning gaps occur in the early hours of the morning, as a direct consequence of the build up or accumulation of trading activities which takes place throughout the night.
The main reasons for this rise? Specific activities of a company which gets reported in the news – something along the lines of an earnings release or even due to an economic number.
Whatever is the reason, these opportunities come to us in the early hours of the morning and if you’re not vigilant enough, you might just end up missing your chance to cash in on them which is definitely something you don’t want to do!
Moreover, with the arrival of pre market trading, this form of trade has become much easier for public investors. But of course, we must not forget that at the same time, the makers of each security have the ultimate last word.
Profit, Profit and More Profit!
This means that when the buying equilibrium shifts to either of the two directions – the buyer’s side or the sellers’ side -, the market maker needs to open the stock as far as is possible within reasonable limits.
It follows that purchasing shares at the lowest possible price and then selling them at their peak value will be extremely lucrative! If you’re new to this, then you might be putting out market orders for transactions in the open and as a result, losing out to seasoned experts! But of course, you are much wise now!
But day trading in live trading rooms is not an easy job at all. Why? Because the time you get to carry out this trade is extremely limited and short. In fact, you need to make lightning quick decisions and if you read even a single clue wrong, you could be a goner, which is what you DEFINITELY do not want!
In fact, a way to help you avoid loss is the emini futures contracts which has been introduced by the Chicago Board of trade and the Chicago Mercantile Exchange. All the traders under this manner can deal with all shares of the S &P 500 with a deposit of approximately $3563, instead of having to invest a fortune in buying the individual shares! Now isn’t that something? Start filling up those gaps, NOW!