I’ve been day trading for almost 20 years…here are a few things you should know about #daytrading stocks. (I can only comment on what works for me. Take what you like, leave what doesn't resonate with you.)
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1. Don’t trade during New York lunch hour. There is occasionally some good action between 11:30 am EST and 1:15 pm EST, but not enough to warrant trading through it every day...
While I traded at the prop firm—based on data from hundreds of traders, thousands of trades, over years—not a single person made consistent money during lunch. Most traders lost a good chunk of their morning profit.
2. Early day trends often get their first major pullback at 945.
10 & 10:30 are often major reversal times as well (within a few minutes). While I won't trade these times on their own, they can be combined with strategies to potentially save some $ or make some $.
10 & 10:30 are often major reversal times as well (within a few minutes). While I won't trade these times on their own, they can be combined with strategies to potentially save some $ or make some $.
3. Most generic day trading articles say to avoid volatile stocks. This is a mistake. Volatile means fast moves. Fast moves, that hit targets or stop losses quickly means less time to mess up during a trade. With a stop loss placed, go where the action is...
I trade the most volatile stock on the market, often moving 8% or more a day. 0.5% to 1% stop loss, 1% to 2% target. 4 trades in 30 minutes (usually a few minutes each), 2 winners, 2 losers, you are up 1% to 2% on capital. Done.
4. Avoid the game of predicting. Predicting usually means big stop losses and then you have to hold for a long time to get a decent reward:risk.
Hit hard and fast, capturing current momentum. Take a good reward:risk and then look for the next opportunity (see chart above).
Hit hard and fast, capturing current momentum. Take a good reward:risk and then look for the next opportunity (see chart above).
5. Good day trading isn't gambling. With a solid approach, you're the House. Over many trades your reward:risk & win rate create a profit. Math is working for you. Profits increase with more solid trades.
With gambling, your odds of success diminish the more bets you place
With gambling, your odds of success diminish the more bets you place
6. My big breakthroughs in trading came when I was about to give up on a strategy. I had put in effort but wasn’t seeing results.
Instead of stopping, I told myself I would re-double my efforts for at least another couple of months...
Instead of stopping, I told myself I would re-double my efforts for at least another couple of months...
That bit of extra effort pushed me into profit . I was going to quit anyway, so I had nothing left to lose and tried all the things maybe I didn’t want to before because it felt like too much work.
When you are about to give up, push harder, give it all you got...
When you are about to give up, push harder, give it all you got...
That’s what it takes to succeed in this business…any business. Profits tend to follow quickly after such experiences.
7. Note your emotions while you trade. That feeling of panic, or greed, or “oh shit” lets you know what others are likely feeling as well. Emotions drive prices. Note what is happening at those “oh shit” moments. You know the price is going against you. Look at why?...
You may be on to a powerful strategy, where you are now on the other side of that trade, going “Oh yes” as other people go “Oh shit”. That usually means quick profits. Emotions are a powerful ally. Don’t try to ignore them.
tradethatswing.com
tradethatswing.com
8. Mind frame matters. Before trading, and during, talk through what you're feeling so you can talk yourself into a more neutral state. The more amped up you are, the more opportunities you'll see (that are crappy), and the more timid you are the more quality trades you'll miss..
A trader's job isn't just to hit buttons, but to manage the button pusher...make sure they are in a calm neutral state so they can push the buttons when they are supposed to and avoid pushing them when there are no quality trades present.
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@corymitc
I have loads of free articles, as well as full courses, on day trading stocks and other markets on tradethatswing.com
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@corymitc
I have loads of free articles, as well as full courses, on day trading stocks and other markets on tradethatswing.com
Please like and retweet this thread if you want more content like this.
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