Here's a huge tip right from the start for beginner traders reading this. The best strategy for beginner traders contrary to what you may have been led to believe is not day trading.
While day trading is one of the most exciting ways to participate in financial markets, it is not, as I said, for beginners. Did you know that beginner traders who attempt day trading lose an average of twenty thousand dollars in their first month and forty thousand dollars in their first year of trying to day trade? Now you do!Β
Β WARNING Before you do anything stupid or crazy like try to day trade as a beginner with limited knowledge and experience you should read these books first: πππ² ππ«πππ’π§π ππ πππ² πππ¦ππ₯π’π§π , πππ² ππ«πππ’π§π ππ²ππ‘π¬ πππ―πππ₯ππ or πππππ‘ ππ² πππ² ππ«πππ’π§π . Hopefully if you read them, they will scare you so bad you won't even think about trying to day trade as a beginner.Β
It requires years of experience and a huge amount of capital to be successful and also consistently profitable from doing day trading.Β
No matter what you've been told, you will not ever be able to make money day trading as a beginner trader and high probability says, you will lose all your money from attempting to do so.
I strongly urge you to read the suggested reading above because not doing so, will cost you a lot of time and money.
At best, you might be successful at day trading on a daily chart time frame. Why? That's because the daily chart time frame is the easiest time frame to see the price action you need to see to be able to make a execution decision.
It absolutely is possible.
What I'm about to tell you is like me giving you the keys to your Lambo, your mansion and your G700LR all at the same time. Your welcome!
The way to make money trading a daily chart is by trading a stock that moves $1.50-$2.00 a day in one candle. How is that done?
The metrics are very simple:
Find a stock with an ATR of $1.50 at a minimum. Use enough capital to buy a large enough block of the stock to get the amount of money you wish to make.
How much do you want to make in a day? $100 $200 $500? The only thing stopping you from making the amount of money you wish to make is the amount of capital you use, that's it.
If you buy a block of 1000 shares of XYZ company and the price moves 10 ticks there's your $100 dollars. Set your profit target at 10 ticks and it gets filled and BOOM you're out with your $100. Once your order gets executed you immediately set your profit target for however much money you want to make.
It's truly that simple. Depending on how volatile price action is in the stock you are buying you can be in, and out, with your money in minutes, no really.
Imagine getting your order filled on open of RTH and then having your profit target filled at 0945 and you're out with your $100 $200 $500. Now what? Now, you go enjoy the rest of your day and do what ever it is you wish to do. What you don't do, is trade again.
There are 250 trading days in a year give or take a holiday. That means: $100 = 25,000, $200 = 50,000 and $500 = 125,000. How much do you need to make? How much is enough?
You would need to be able to use at least 25 thousand dollars of capital to do what I just described in the last section. Using that amount of capital has your money exposed the least amount of time in the live market. Remember, the longer your money is exposed the longer it is at risk.Β
As I said, if your order gets filled and price moves 10, 20, or 50 ticks in a very short period of time that's how fast you can get paid. You've heard the saying "time is money" right? Well, I just told you how to make money quickly if that's what you're looking to do. The question is, can you?
Beginner traders who need to learn trading from scratch should read this article.
The only thing you have control of when you are in the live market is how much money you don't lose. That's the honest truth. all the rest of it is nothing unless you control your money.Β
Here's a huge tip. Your rule based trading strategy you composed for trading the daily chart time frame, yeah, that's right, you'll need to compose a specific trading strategy for the time frame you wish to work in.Β
You need to incorporate your risk management metrics into your rule based trading strategy so the when you press the buy button everything is in place and there is nothing for you to do other than sit back and wait to get paid.
Can you do that?
WARNING Before you do anything stupid or crazy like try to day trade as a beginner with limited knowledge and experience you should read these books first: πππ² ππ«πππ’π§π ππ πππ² πππ¦ππ₯π’π§π , πππ² ππ«πππ’π§π ππ²ππ‘π¬ πππ―πππ₯ππ or πππππ‘ ππ² πππ² ππ«πππ’π§π . Hopefully if you read them, they will scare you so bad you won't even think about trying to day trade as a beginner.Β
Master supply and demand trading by reading our comprehensive article on Daily Chart Supply and Demand Trading: Expert Tips and Strategies.
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