Vocabularies, Notes

Ask - An ask is what seller are demanding in order to sell it.
Average daily volume - The average number of shares traded each in a particular stock.
Average relative volume - How much of the stock is trading compared to its normal volume.
Average True Range/ATR - How large of a range in price a particular stock has on average each day.
Averaging down - 
Bear - a seller or short seller of stock, if you hear the market is bear it means the entire stock market is losing value because the sellers or short sellers are selling their stocks. The sellers are in control.
Bearish candlestick - a candlestick with a big filled body demonstrating that the open was at a high and the close was at a low, it tells you that the sellers are in control of the price and it is not a good time to buy.
Bid - A bid is what people are offering to pay for that stock at the moment.
Bid-ask spread -  The difference between what people are willing to pay to purchase a particular stock and what other people are demanding in order to sell that stock at any given moment, it can change throughout the trading day.
Black box - The top secret hidden computer programs, formulas and systems that large Wall Street firms use to manipulate the stock market.
Broker - The company who buys and sells stocks for you at the Exchange, because day trading requires fast order execution, you really must use what is called a direct-access broker, conventional online brokers (also known as full-service brokers) provide considerably more investment advice, tax tips, retirement planning and such, but generally do not offer the necessary fast order execution, and are therefore more suited for investors and retail swing traders.
Bull -  a buyer of stock, if you hear the market is bull it means the entire stock market is gaining value because the buyers are purchasing stocks, in other words, the buyers are in control.
Bull Flag - a type of candlestick pattern that resembles a flag on a pole, you will see several large candles going up (like a pole) and a series of small candles moving sideways (like a flag), which day traders call consolidating, you will usually miss the first Bull Flag but your scanner will alert you to it and you can then be ready for the second Bull Flag.x
 
 
Conventional Brokers
Direct-Access Brokers
  • TD Ameritrade
  • Lightspeed Trading
  • Interactive Brokers
  • Speed Traders
  • CenterPoint Securities.

Margin - Margin is like a mortgage for your house. You borrow a significant amount of money and buy a                 residence. Banks will give you a mortgage, but they won't take any responsibility or risk on it. (10 : 1 leverage) -> $100,000 down and borrowed $900,000 to buy $1,000,000.
(1 : 6 margin -> $5,000 in their account is equal to $30,000 in buying power for active trading.
Margin Call - when a broker notices that you are using leverage and losing money, they might issue a                             "margin call" to you. Margin call is a serious warning.

TD Ameritrade's own software is called thinkorswim.
Lightspeed -> lightspeed.

Sterling vs DAS

Real Time Market Data
  • Canadian Market -> Toronto Stock Exchange(TSX)
  • US -> Nasdaq TotalView level2 data feed
    • Level 2 is known to be a "leading indicator", which means it shows activity before a trade happens. Moving averages, charts and most of the other indicators are known as "lagging indicators", meaning they provide information after the trades take place.
      • Level 2 will show you a ranked list of the best bid and ask prices from each of the participants, and giving you detailed insight into the price action.
Swing traders

high volume (liquidity) and volatility

A bid is always lower, an ask is always higher, and the difference is called the bid-ask spreads.

VWAP is the most important day trading indicator and needs to be easily and quickly distinguished from other moving averages.

Three important types of orders: (day trading)
  • Market orders
    •  "Buy me at any price! Now!"
    • "Sell me at any price! Now!"
    • A market order buys at the ask(high price) and sells at the bid(low price).
      • For example, if the bid-ask spread is $ 10.95-$ 10.97, market orders should buy immediately at $ 10.97 for you, right? When your market orders come to the Exchange, the market can quickly change to $ 11.10-$ 11.15, and therefore your buy market order will be filled at $ 11.15. That is a slippage of 18 cents. And that is really bad. A market order is like a blank check.

  • Limit orders
    • "Buy me at this price only! Not higher!"
    • "Sell me at this price only! Not lower!"
  • Marketable limit orders
    • "Buy me now, but up to this price! Not higher!"
    • "Sell me now, but down to this price! Not lower!"
*Hotkeys*

There are basically three categories of traders:
  • The buyers
  • The sellers
  • The undecided traders
Your job is to analyze the balance of power between the buyers and the sellers and bet on the winning group.

Understanding who is in control of the price is an extremely important skill in DAY TRADING.

Your job as a successful day trader is to figure out if the sellers will end up in control or if the buyers will end up in control.
You don't want to be off in the sandbox doing your own thing. You want to be where the action is. And if you can't decide what that action is, if it looks like it's a toss-up, don't do anything. Bide your time or move on to look for another potential trade. Never forget that the successful day trader is just like a guerrilla soldier, you make calculated moves, at the appropriate time, quickly and stealthily.

Stand aside if you cannot recognize who is winning the battle. Let the bulls and the bears fight with each other and then enter trades only when you are reasonably certain which side is likely to win.

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