Free Intraday Share Tips

Day trading is the practice of opening and closing stock market trades on the same day. Intraday stock action is fast-paced and highly volatile. Day traders must learn special strategies for evaluating how the trading session may unfold. If you choose to trade shares Free Intraday Tips, you must be patient with yourself and acquire much experience watching stock charts. Some tips can help you with the learning curve.

Compare Indexes

A stock index is simply an average of the prices of all the stocks measured in that index. Comparing two similar indexes with each other can help a day trader predict the outcomes of the day. The Dow Jones Industrial Average ("The Dow") and the S&P 500 are two major stock market indexes that measure American stocks. If one index is performing better than the other, you can surmise the lagging index will eventually catch up. This is called "divergence," and it does not always appear. But when it does, take note that the stock market could be in for a reversal. For example, if The Dow declines to a level that is higher than its previous low, but the S&P 500 declines to a new lower low, this is divergence. In such a case, it is possible the S&P may eventually rise to match the performance of the Dow. Day traders capitalize on this by purchasing shares of stock during the divergence and then selling later when the two indexes are more in line with each other.

Monitor Pivot Points

Pivot points are price levels in the stock market that could form intraday reversals if the market hits these points. Each day's pivot points are the result of a formula built from the previous day's performance. You can find the pivot points for the current day from websites. Pivot points consist of "R" levels, or "resistance" prices, and "S" levels, or "support" levels. Resistance points, if hit during rising prices, can sometimes cause a reversal in the market, while support levels can halt a downward decline in prices during the day. Though their calculations are somewhat arbitrary, they do tend to hold simply because so many traders around the world are aware of these levels. Even if you choose not to trade off pivot point levels, you should know what they are each day as the market may struggle to continue in its current direction when it encounters these prices.

Monitor Market Internals

Some technical indicators exist solely for purposes of studying intraday price action, and day traders should be aware of these tools. Called "market internals," indicators such as the "Tick" and the "Trin" summarize the intraday activity occurring on the stock exchanges. The Tick simply displays the total number of rising stocks minus the number of declining stocks. Day traders recognize that rarely do all the stocks on an exchange move in the same direction, thus when the Tick reaches positive or negative extremes, the market tends to reverse, even if temporarily. These extremes vary, but a reading of 1000 or -1000 is usually as far as the Tick will extend. The Trin is another study of price action, but it includes in its calculation the number of traded shares. Its reading is inversely proportional to market action. If the Trin rises, the market is biased toward a price decline. A declining Trin indicates market strength and signals rising prices during the day.

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