Trend trading strategies are fundamentally different from those of the day trader, however. While a day trader is trying to capitalize on volatility, the trend trader is trying to make non-volatile decisions. A trend trader may hold a position in a stock for weeks, months, or even a year or so. Trend traders are interested in liquidity, not volatility, for the most part.

What are the strategic underpinnings of the trend trader? Why is this a superior trading strategy to day trading for many, many people?

*Trend trading does not require minute-by-minute market monitoring.

*Even short-term trend trading is not as stressful as day trading.

*Trend traders can get paid stock dividends as an added bonus.

*Trend trading allows for more patience, which means that changes that take place in the more-distant future can be capitalized upon.

Short-term trend traders can adjust their time horizons accordingly with their next entered-into position if they sense the need to do so.

However, no system is perfect, and trend trading does have some strategic pitfalls that must be accounted for.

*A day’s good news can be wiped out overnight or the very next day, which can be disheartening and frustrating, and if your time horizon is short-term it can be a profit-killer.

*You have to be very astute about your stop-loss orders. Screwing these up can cost you a bundle of money.

*The longer your trading horizon, the more opportunities for profits you have but the more risk you run of losing focus and missing the golden opportunity.

Some people use a variant on the theme of trend trading–counter-trend trading. This is a favorite method of the contrarian investors, whose philosophy is that to be successful you must always do the exact opposite of what the vast majority of other investors are doing. This strategy involves applying the “buy low-sell high” strategy to trend trading. So an upward trend is a sell signal, whereas a downward trend is a buy signal to them.

So, trend trading strategies differ pretty significantly from day trader strategies, even in the short term. This needs to be kept in mind at all times.

That doesn’t mean I don’t like risk.  In the real world, I’m an entrepreneur and taking risks comes with the territory.  It doesn’t bother me.

However, I feel like there’s a big difference between me and people gambling in Vegas.  I’m able to stack the odds in my favor.  In Vegas, you close your eyes and hope lady fate is feeling generous that day.  To me that just seems stupid.  I’d rather not take risks where the result is completely up to chance.

So what does this have to do with day trading?  Everything.  Did you know that only 5% of people doing day trading ever make any money?  Most people lose money and some get completely wiped out when they try it.  Why?  They’re not stacking the odds in their favor and they’re taking big unnecessary risks.

Low Risk Day Trading Strategies

So if you’d like to join the land of the 5%, let me give you a few low risk day trading strategies you can use to make excellent returns (about 12.8% per month – that’ll more than quadruple your money in a year)

1) Use Multiple Time Frames

To get a clear picture of what’s happening in the market, you’ll want to make sure you’re looking at multiple time frames.  As an example, let’s say you’re looking 5 minute time frames to enter your trades.  You’ll also want to check out 30 minute or 1 hour time frames to get an idea of where the market is generally headed.

2) Cut Your Losses

The mantra of the day trader should be “live to fight another day.”  That means that you need to put a stop loss in place on every trade you do otherwise you’re playing a dangerous game of Russian roulette with your money and some day it’s going to wipe you out.

You’re going to have trades where you lose money, especially if you’re day trading.  Just don’t allow any single loss to deal a fatal blow to your entire portfolio.

3) Trade with the Trend

Say it with me.  “The trend is your friend.”  The trend is your friend.  This tactic of following trends has created many millionaires and I can’t even tell you how many books have been written on this topic.  Just visit Amazon and check a few of them out.

Learn how to use trend trading to get 12.8% returns per month with day trading or 6.43% monthly returns in just 5-10 minutes a day after the markets have closed by getting this free trend trading pdf report.