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Since Daytrader is primarily a tactical tool, it is used to its best effect in conjunction with a strategic trading plan. It should reliably indicate a change in minor trend direction, but should not be expected to signal the beginning or end of an intermediate or major trend move, which is better left to fundamental or long-term technical analysis methods. Outlined below are a few specific methods for using Daytrader: This text will all be in Korean.
1. Defense on a New Position - If the market takes out an extreme VMA point, particularly if there is a good congestion of technical points ahead of the VMA point, and your position is in the red, get out! Your timing is off. You can always enter another day.
2. New Position Entry A - Place 'OR BETTER' orders to enter the market just ahead of significant congestion areas or at inside VMA points, especially if the congestion areas occur between two optimum VMA points.
3. New Position Entry B - If the market has been moving contra-trend and achieves a Range Reversal or takes out an extreme VMA point and/or a significant technical congestion in the direction that you perceive to be the major trend, go with it!
4. Profit Taking A - If the market has been trending and reaches an extreme RSI or oscillator value, and cannot penetrate a significant congestion of technical points or fails to achieve an inside VMA point in the direction of the trend, a contra-trend move could develop. Near-term trend traders should take profits.
5. Profit Taking B - If the market has been trending and achieves a Range Reversal or takes out an extreme VMA point and/or a significant technical congestion in a contra-trend direction, a near-term change in trend is likely and profits should be taken.
6. Day trading - If a large congestion of technical points occurs between two relatively closely spaced VMA points, enter the market at the inside VMA point, ahead of the congestion. Place a protective stop after the congestion, just outside the extreme VMA point. Exit the trade at the opposite inside VMA point or on the close.
Entry should be avoided in markets which have poorly defined risk areas for support and resistance (i.e., a vast spread between inside and extreme VMA points or thinly spread technical points with little or no congestion).
Daytrader works well in markets that have higher volume and lower volatility. The usefulness of Daytrader, and all other technical indicators for that matter, diminishes in conditions of sparse volume, large overnight gaps, and consecutive limit moves.
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