My new day trading strategy

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Day trading requires your time — most of your day, in fact.

10 Basic Day Trading Tips

Trading volume: This is a measure of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, which is known as the average daily trading volume). A high degree of volume indicates a lot of interest in a stock.

Often enough the price gets rejected immediately from the trend line and then the trend continues. But if you get a double top or bottom directly at the trend line, then the edge you get is even that much greater. In such a scenario, you get a very early confirmation that the next move phase of the trend has started.

The profit potential of such signals is huge because there is a lot of room for a big subsequent move. A Real Chart Example. The following screenshot shows a rising trend line drawn on the H4 timeframe. At the point where price touches the trend line, labeled with the green arrow, a double bottom entry signal has occurred on a lower timeframe.

The next screenshot shows the entry signal that occurred on the H1 timeframe directly at the trend line:. Double tops and bottoms that occur near a trend line after the move phase has begun are also extremely good setups.

The price has touched or come near a trend line drawn on D1 or H4. Then the next move phase in direction of the trend started. You can do everything you can do in a thread - post links, pictures, videos, quote from posts in the public forum, etc. Forums New posts Search forums. What's new New posts New resources New profile posts Latest activity. Resources Latest reviews Search resources. Members Current visitors New profile posts Search profile posts. What's new Search Search.

For a better experience, please enable JavaScript in your browser before proceeding. Zerodha Part 3 Zerodha Traderji Aug 14, Finvasia Finvasia Finvasia Nov 1, Wisdom Capital Wisdom Capital Aug 18, Passion for Trading If you are passionate about trading, you have come to the right place.

Social Engagement Earn trophies for reaching milestones by helping others and receiving likes. Recent Activity Stream Easily see all the recent happening on the forum. Many orders placed by investors and traders begin to execute as soon as the markets open in the morning, contributing to price volatility. A seasoned player may be able to recognize patterns and pick appropriately to make profits.

But as a newbie, it is better to just read the market without making any moves for the first minutes. Decide what type of orders you will use to enter and exit trades. Will you use market orders or limit orders?

Limit orders help you trade with more precision, wherein you set your price not unrealistic but executable for buying as well as selling. A strategy doesn't need to win all the time to be profitable. The point is, they make more on their winners than they lose on their losers. Make sure the risk on each trade is limited to a specific percentage of the account, and that entry and exit methods are clearly defined and written down. There are times when the stock markets test your nerves.

As a day trader, you need to learn to keep greed, hope and fear at bay. Decisions should be governed by logic and not emotion. There's a mantra among day traders: In deciding what to focus on — in a stock, say — a typical day trader looks for three things:. Once you know what kinds of stocks or other asset you are looking for, you need to learn how to identify entry points — that is, at what precise moment you're going to invest.

Tools that can help you do this include:. Define and write down the conditions under which you'll enter a position. You'll then need to assess how to exit those trades. Profit targets are the most common exit method, taking a profit at a pre-determined level. Some common price target strategies are:. The profit target should also allow for more profit to be made on winning trades than is lost on losing trades.

Define exactly how you will exit your trades before entering them. The exit criteria must be specific enough to be repeatable and testable. There are many candlestick setups a day trader can look for to find an entry point.

If properly used, the doji reversal pattern highlighted in yellow in Figure 1 is one of the most reliable ones. If you follow these three steps, you can determine whether the doji is likely to produce an actual turnaround and can take a position if the conditions are favorable.

Traditional analysis of chart patterns also provides profit targets for exits. For example, the height of a triangle at the widest part is added to the breakout point of the triangle for an upside breakout providing a price to take profits at. For long positions a stop loss can be placed below a recent low, or for short positions , above a recent high.

It can also be based on volatility. Define exactly how you will control the risk on the trades. However you decide to exit your trades, the exit criteria must be specific enough to be testable — and repeatable. Also, it is important to set a maximum loss per day that you can afford to withstand — both financially and mentally.