Day Trading – How to Look For Possible Opportunities

VantagePoint Learning Center

Day Trading Opportunities

Welcome to the “How to look for possible day trading opportunities” Learning Session. In this session, we’ll cover how to:

Use various indicators to confirm a possible day trading opportunity
Determine strength or weakness in a market
Understand the Predicted Short Term Difference indicator
Get an indication stop and limit placement possibilities

Learn how to use various indicators to identify and confirm a possible day trading opportunity.

There are many different ways to use VantagePoint and it can be adapted to many different trading styles. Here is one possible way to interpret your charts for day trading.First let’s open the portfolio we want to review.

The first step in identifying a possible day trading opportunity is to check the direction of the Predicted Short Term Difference line. If the line is pointing UP, as our example shows, then this is an indication that VP is predicting strength in the market for the next trading day. Conversely, if the line is pointing DOWN, then this is an indication that VP is predicting weakness in the market for the next trading day.

The Predicted Short Term Difference is an indicator that predicts for one trading day in the future. It measures the difference between (F6) the short term crossover and the actual moving average. This is why you are able to get a reasonably accurate forecast for tomorrow’s direction using this indicator. (F5) Once you have an understanding of the direction for the next trading day, you can decide which way you would like to trade.

Now let’s click on the Daily Report to get an indication of where you may want to set your stops and limits. Let’s say the Predicted Short Term Difference is pointing up, as is the case w/ this chart, you may decide to enter a market order, and then place a stop around VantagePoint’s predicted low and a limit around VantagePoint’s predicted high. Conversely, if the Predicted Short Term Difference is pointed down, you may decide to enter a market order, and then place a stop around VantagePoint’s predicted high and a limit around VantagePoint’s predicted low.

One thing to note is that different traders will place different types of orders. It is up to you to determine what works best for you. Also, your stop placement will depend on your risk propensity, account size, and many other factors.

Something to consider is that, if the Predicted Short Term Difference line is pointed UP, this does not necessarily mean that the market will close higher tomorrow. It simply means there is likely to be strength in the market for the next trading day. Likewise if the Predicted Short Term Difference line is pointed DOWN, this does not necessarily mean the market will close lower tomorrow. It simply means there is likely to be weakness in the market for the next trading day.

You can see by looking at this _(Euro/Brit Pound)___ chart, for example, that there is great potential even if you close out your position by the end of the trading day.

Try paper trading this for a while first, and then once you get the hang of it, you can try a real trade in the open markets.