Education is often only about terminology. So let’s look at the terminology you need to know considering the five most popular trading techniques.

1. Breakout trading: Breakout trading involves identifying a stock that is trading within a specific price range, and then buying or selling the stock once it breaks out of that range. This can be based on technical indicators, such as support and resistance levels, or on news or events that are expected to impact the stock’s price.
2. Trend trading: Trend trading involves identifying the overall direction of a stock’s price trend, and then buying or selling the stock based on that trend. This can involve using technical analysis tools, such as moving averages* or trend lines**, to identify the stock’s trend and potential entry and exit points.
3. Range trading: Range trading involves buying a stock at the lower end of its price range and selling it at the upper end of its range, or vice versa. This can be based on the assumption that the stock’s price will continue to move within a specific range, allowing the trader to profit from the stock’s price fluctuations within that range.
4. Scalping: Scalping is a day trading technique that involves taking advantage of small price movements in a stock. This can involve placing a large number of trades over a short period of time, and taking small profits on each trade. Scalping can be risky, but it can also provide the opportunity for high returns if done successfully.
5. News trading: News trading involves buying or selling a stock based on news or events that are expected to impact the stock’s price. This can involve keeping track of economic indicators, company news, and other relevant information, and then using that information to inform your trading decisions.

In a nutshell, there are several basic day trading techniques that traders can use, including breakout trading, trend trading, range trading, scalping, and news trading. The right technique to use will depend on the specific circumstances of the stock and the trader’s goals and risk tolerance. Which one is your favorite?

*A moving average is a technical analysis indicator that is commonly used in stock trading to help smooth out price data and identify trends. It is calculated by taking the average of a stock’s closing prices over a specific number of time periods, such as 10 days, 20 days, or 50 days. The resulting average is then plotted on a chart, along with the stock’s actual price data. Moving averages are used by traders to identify the direction of the trend and to determine potential support and resistance levels. They can also be used to generate buy and sell signals, by identifying when the stock’s price is above or below the moving average. For example, if a stock’s price is consistently above its moving average, it may be seen as a bullish signal, indicating that the stock is in an uptrend. On the other hand, if a stock’s price is consistently below its moving average, it may be seen as a bearish signal, indicating that the stock is in a downtrend.

**Technical trend lines are lines drawn on a stock chart that are used to identify the direction of a stock’s price trend. These lines are typically drawn by connecting the highs or lows of a stock’s price over a certain period of time, and they are used by traders to identify potential support and resistance levels. Trend lines can take many different forms, but they generally appear as diagonal lines that slope up or down on a chart, depending on the direction of the trend. For example, if a stock’s price is trending upwards, the trend line will typically slope upwards, indicating that the stock is in an uptrend. If the stock’s price is trending downwards, the trend line will typically slope downwards, indicating that the stock is in a downtrend.