Trade alerts are supposed to give the active trader or investor a notification when a certain event takes place. Trading alerts are an intrinsic element of a majority of brokerage firms and trading applications. This event could be dependent on a range of factors varying from a specific price target, technical pointer or news event. In general, trading alerts provide the means for a trader to be notified when a certain event occurs so the trader can choose to take specific action. This action could be in the form of placing a trade or watching the trading activity of a stock more carefully.
There are on-chart alerts that trigger some kind of sound or pop-up notifying the trader a certain event has taken place. An event could be breach of a trend line or indicator. On-chart indicators are wonderful for traders who wish to make their alerts based on price action and not based on static numbers. For instance, if I make a rising trend line, the alert will be generated at a new value at 10:00am vs 2:00pm just based on the slope of the line. This again provides more plasticity of the alert as it is based on two dimensions, price and time.
Difference between day trading alerts and swing trading alerts
While the categories of alerts could be the same in some way, the time factor is the critical differential between the two. For instance, if you get a swing trading alert, this could simply mean that you are now in the monitor phase which could be there for a few hours or days before you move forward with any action.
Day trading does not permit for this extent of a monitoring hole as you are actively trading the stock of the day and what’s trending at 10:00 am will possibly not be two days later.
Another big difference is the sensitivity of price action. When you are day trading, if you get an alert for a stock at $8.12, your entry price will need to be very much similar to this alert value to optimize the trade profitability. On the other hand, if you are swing trading, your possible profit target is probably much higher than if you were day trading, thus you are likely to enjoy more flexibility of where you can define your position.
One of the biggest advantages for utilizing trading alerts is that it diminishes the amount of market clamour you consume. If you are new to the trading sector and strive to take in all that it provides, you will factually have sensory overload. Among the blogs, news sites, CNBC, market scanners, and StockTwits, you may have the impulse to just bury your head in the sand from all the sentiments flying around.