Trend trading is more difficult than it looks at a first glance. Spotting a trend in a chart and having the impression that you could have entered it here and leave it there is sweet but hindsight. In reality trends often stop to be trendy in the moment the trader has a position. Day trend trading is even more difficult as the time to analyze and rethink something is simply not there.
The fine thing about intraday trends is that they are often strong. News hit the wires and the market reacts. If that happens during the trading session, a day trader can make the whole run that otherwise would have evaporated in an overnight gap. More often reasons for intraday trends are not that clear and thus the trend is not smooth and strong. Smoothness is a quality criterion for trends. Most intraday trends are swingy or noisy.
Still, these zigzagging trends can be traded. This is done routinely by a minority of day traders. There are many styles to day trade, but doing scaled down what trend traders in a swing trading time frame are doing is somewhat uncommon. So, we have a trend that is not sharp-edged, instead it is fuzzy and has pullbacks. It is possible to use these pullbacks to your advantage!
Generally the overlaid swinging of intraday trends in Forex and the stock market indices occurs, because it would otherwise be too easy to trade them. Huh?
That’s right, a smooth trend would be best to trade but that is the very reason why it doesn’t show up, unless there is a strong driver like price level changing news. The simplest system to trade the perfect smooth trend would be to wait for the smallest sign of a reversal and then go out. This is exactly what some are doing and so the disruption of a smooth trend becomes bigger until it is a real pullback and the smoothness is gone.
It is possible to turn the tables here and actively wait for pullbacks or random counter moves that got amplified by such scalping behavior. There is also the amplificated “index noise” that is overlaid on many day trading stocks, for instance, the large momentum tech stocks of the Nasdaq. But there is a learning curve involved. Trading day trends means you have to become a real day trader and that is of course not easy. Competition is probably tougher than in longer time frames.
The best method to become good in day trading is still to copy a successful trader. For example, here is a site with a trading room, where this trading system gets explained and applied. Having a trader who practiced this intraday “trend scalping” system for a long time, and being able to watch over his shoulders, may give you the edge that is absolutely necessary for day trading.
