Day trading strategies: the beginner’s guide for 2020. How to Develop the Right Money Management Mindset to Generate a Passive Income and Day Trade for a Living E-Book

George Graham

• Herausgeber: Youcanprint
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2024

Beschreibung

EVERY MARKET GROOVE, EVERY GAIN THROUGH YOU. Are you searching for your gateway to financial independence? Dive into the art of Day Trading and harness strategies that many often overlook. How frequently have you heard friends or acquaintances discuss their investments? Perhaps they boasted about a luxury purchase, like a BMW, all due to their trading profits. Have you wondered how they achieved that? You might have thought, "Trading is not for me." Maybe you just lacked the proper tools until now. In this guide, written clearly and engagingly, you will uncover the intricacies of Day Trading and learn to operate as a seasoned professional. Cultivate the appropriate mindset, manage your money wisely, plan successful trades, and avoid common pitfalls. Discover foolproof trading strategies and understand how passive income can set you on the path to early retirement. While Day Trading may not suit everyone, becoming familiar with the system makes spotting and seizing opportunities almost instinctive. Diversify your investments, augment your income, and establish a secure future for yourself. Are you ready to build your empire? Order your copy today and prepare to immerse yourself in the world of investments.

Leseprobe

DAY TRADING STRATEGIES: THE BEGINNER’S GUIDE FOR 2020.

How to Develop the Right Money Management Mindset to Generate a Passive Income and Day Trade for a Living.

George Graham

Table of Contents

Introduction

Chapter 1: The Basic Concepts of Day Trading

What Is Day Trading?

How Day Trading Works?

Overview of Day Trading

Day Trading vs. Long Term Investing

Benefits of Day Trading

Downsides of Day Trading

Do’s of Day Trading

Risk Capital

Research

Diversification

Stop-loss

Take a loss

Don'ts of Day Trading

No planning

Over-rely on a broker

Message boards

Calculate wrong

Copy strategies

Chapter 2: Trading Plan

Why Do You Need a Trading Plan?

How to Build A Trade Plan?

Consider your strengths and weaknesses

Creating Your Plan

Take into account other challenges you might face

General Planning Rules

Decide how much risk is acceptable

Choose the right exit and entry points

Personalizing Your Day Trading Plans

Your Strengths and Weaknesses

Your Non-Trading, Personal Circumstances

Your Risk Appetite

Chapter 3: Step-By-Step Guide to a Successful Trade

Selecting a Broker

What broker to use?

Building Up Your Watch List

Margin

Execution

Trading Plan (entry, exit, and stop-loss)

Chapter 4: The Right Mindset for Managing Money

The Mindset of a Successful Trader

Have the Right Mindset

Detaching Emotion from the Stock

Think Before You Trade

Find Supply and Resistance Levels

Easy Way to Find the Level

Watch the Market for Dips

Watch the Market for Rises

Master the Basics

Never Take Anything Personally

Maintain a Healthy Respect for the Market

Improve Your Emotional Intelligence

Keep Up with Stress Management

Always Stay Hungry for Knowledge

The Importance of a Positive Mindset

Shape-up Your Trader's Mindset

Learn! Learn! Learn!

Ways to Acquire a Trader Mindset

Chapter 5: Mistakes Beginners Make

Going After Patterns

Absence of Proper Tools

Entering Too Big

Balancing Down

Not Cutting Losses

Revenge Trading

Going in Unprepared

Lack of Proper Tools

Averaging Down

Vengeance Trading

Choosing the Wrong Broker

Not Having Up to Date Technology

Getting in at the Wrong Time

Not Balancing Research with the Current Truth

Not Treating Day Trading as a Job

Chasing Trades

Quick Trading After News Announcement

Trading More than 2% of Your Capital in a Single Trade

Relying Too Much on Day Trading Insights Found Online

Poor Speculation

Improper Education and Research

Not Having Clear Investment Goals

Letting Emotions Rather Than Facts Govern Decisions

Lack of Planning

Adding more Capital to a Trade that is Going Down

Not Setting Stop-loss Parameters

Taking Several Related Trades

Investing What You are not Ready to Lose

Entering the Trade Blindly

Not Carrying out an Analysis of the Market

Chapter 6: Day Trading Strategies

Proper Market Timing

Stop Loss

Profit-making by Short Selling

Scalping

Breakout

Entry Points

Plan your Exits

Momentum

The ABCD Pattern

Flag Momentum

Reversal Trading

Moving Average Trend Trading

VWAP Trading

Choosing Trading Instruments

Time Over Sales

Chart Patterns

Use of Technical Indicators

Using Limit Orders

Setup Trades Every End of The Day

Use the TLS Principle

Utilizing Pivot Points

Position Sizing

Fading

Trading the News

After Hours Trading

High-frequency Trading (HFT)

Chapter 7: Trading Order Types

Types of Orders

Example of Order Usage for a Trade of Stock.

Market Order

When Market Order can be Used

Slippage of Market Order

Market Order vs Limit Order

Market Order Example of Real World

Limit Order

When to Use a Market Order

Stop Order

Stop Order Basics

For Bears - Orders of Stop-Loss

For Bulls, Buy Orders to Stop

Stop Orders Examples

Buy-Stop

Stop Market Versus Stop-Limit

Loss-Stop

Mechanism of Trading Orders

Preparations for Placing an Order

Chapter 8: How to Generate Passive Income

How to Generate Passive Income Automation

Chapter 9: Trading Psychology

The Important Psychology of Trading

Never Take Anything Personally

Always Stay Hungry for Knowledge

Create Discipline

Patience

Keep Up with Stress Management

Maintain a Healthy Respect for the Market

Herd Mentality

Bias in Trading

Psychological Aspects affecting Traders’ Habits

Remedying the effects of psychological habits

Psychological Issues

Fear

No Responsibility

The Fear of Missing Out

Fear of Failure

The Fear of Success

Anger

Laziness

Greed

Overthinking

How to Achieve Emotional Stability

Emotional Intelligence

Discipline for Day Traders

Emotion vs. Performance

How to Control Your Emotions as a Trader

Discipline Guidelines

Emotional Intelligence

Chapter 10: Tips for Success

Understand Your Motive

Never Stop Learning

Realize Your Goal

Set an Entry and Exit Price

Do not Rush to Trade when the Market Opens

Take Advantage of Technology

Be Focused

Trade with Money you can Afford to Lose

Manage your Risks

Avoid using Margins

Bear the Business Kind of Mindset

Developing and Implementing a Trading Methodology

Identify Your Flaws as Well as Your Strengths

Allow Yourself Time

Consistent Research

Keeping a Trade Journal

Validating Your Plans

Adhere to Suggestions, Pay the Price

Refusing to Cut Losses Can Be Costly

Discipline is Everything

Beginning Traders Seek Magic; Experts Know Best

Uninformed Traders Lack Knowledge

Learning From Others

Regularly Cashing Out

Taking Breaks and Having Fun

Have a Network of Fellow Traders?

Love the Trading Market

Disregard the Holy Grail

Connect with Your Trading Plan

Arrange Your Personal Life

Try Not to Break Your Rules

Tune in to Your Intuition

Make Peace with Losses

Try not to Believe in a Company

Lose the Crowd

Watch for Early Warnings

Pursue Your Discipline

Stay Away from Market Gurus

Practice Accounts

Stick to What You Know

Keep Practicing

Don’t Be Too Excited

Pick the Right Stocks

Stick With Your Strategy

Keep Emotions Out

Come Up with the Right Stop Points

Consider Working with a Broker

Take a Break When Needed

Write Down Tips After Your Trades

Create a Routine

Have the Proper Tools for the Trade

Have a Strategy

Conclusion

Introduction

If you have chosen to buy this book, you may already have been intrigued by the exciting personal and financial rewards that day trading possesses. If you are interested in day trading, you might have heard about the amazing and fascinating tales of some big monetary benefits that day trading has brought for some investors or you might simply want to change your daily routine by switching it from an active job to working from home. 

The following chapters will discuss some of the basics of day trading. Not only will you find all the information you will need to successfully get started as a day trader, but you will also find five success stories.

Day trading isn’t for everybody. It takes a person with the right mindset to become successful. Through this book, you will be able to learn if you are that type of person.

Trading in the financial markets has caught the eye of several people across the globe. This has led to an increase in the need to know how the market works. The most common reason people have joined trading is to create revenue by making profits. 

Day trading involves buying financial instruments and later selling them at a higher price to make profits. People engaging in day trading usually engage in two forms of trade. These forms of the trade include long trade and short trade. 

The process of trading encompasses risk management and trading psychology. There are several ways a trader can avoid or minimize risks through the trade process. He or she is advised to study market psychology and be calm and accurate when making decisions. 

The key to master the art of day trading is maintaining knowledge and discipline. When you are sitting in front of your trading computer screen with your finger on the trigger, you are about to make decisions in split seconds. Your decisions can help you rake in thousands of dollars while at the same time, it can strip you of thousands of dollars. 

ISBN 978-1-4467-3055-3

Chapter 1: The Basic Concepts of Day Trading

What Is Day Trading?

Day trading refers to the transactions that are performed by traders on financial securities within a restricted period of a single trading day. Simply put, it is the buying and selling of different types of securities in a short and limited time frame. It is pertinent to mention here that day trading is not limited to stocks only, and it encompasses futures and currencies as well. The basic point to keep in mind is that day trading spans over a single day. You cannot roll over the open trade positions overnight to the next day. There was a time once when the only people who could actively take part in trade were the ones who belonged to large financial institutions, trading houses, and brokerages. However, things have considerably changed since the advent of the internet. Now there are online trading houses and brokers that have made it possible for an average investor to actively trade.

Day trading is done on different platforms and systems, and the operator must be familiar with the trade. This should not scare you. To find out how it does not work in all cases, you need to be a computer expert and to study the basic movements and technological developments over time. 

Losses in the business market are expected and most traders lose daily transactions. It is also essential to focus and ration for a period of losses and to not forget the fundamental fact that money will sometimes be lost. Focus on the future activities of daily transactions by implementing some of the strategies outlined in the grand scheme. 

Independence is to build your own set of tools. To do this read books, watch every video, interact with a mentor. If the books have another point of confusion in your area then study more. Always grasp the basics after a thorough study. But when you feel lost, do not hesitate to get help. More importantly, the listen to your teacher and analyze the success of movements that are part of his grand plan. 

Good things take time. In a strategic move, think twice, but it should not cause paranoia. Act, by many areas to reduce the number of losses in various activities of daily transactions. 

Also, it takes patience to learn to be a day trader. Day trading will not be accessible at first, but over time, which will be equipped with a lot of skills and experience.

Getting stuck in the past has made many prisoners. Seeing the possible future moves are considered the requirements of a day trader. This implies clear mental thinking about their next possible moves after careful consideration.

A day trader does not need have to be rich initially, but they must have a specific amount of money that has been specially selected to start the trading day. Remember, the first days are always a win or a loss situation as you continue to learn and grow. This particular set of money can be lost as well. Be careful when handling your finances in day trading. Not every story is a good story. 

High interest in something is the objective to be successful. This gives the desire to learn and master what day trading is all about and is the sign of a future entrepreneur. 

Day trading is a lucrative career if you understand its basics and execute it properly. It is a fact that it can be a little challenging for the people who are new to it and are not well-prepared or they don’t have a well-planned strategy to win the game. The key is to understand the fact that even seasoned day traders can certainly hit some rough patches in business and experience painful losses. All days are not successful days.

How Day Trading Works?

The basic thing about day trading is that it is not like an ordinary investing technique. Investing is the technique of buying a bunch of stakes in a particular asset that would build a profit for you over the long term. How long it takes varies from investment to investment, but it may span over years. Investors do in-depth research on a stock and remain greatly concerned about the crests and troughs of the stocks they are investing in. They lookout for the companies which tend to make big profits, which avoid debts, which pay them off on time if they accumulate them, which keep a powerful line of products, and which escape from litigation. 

Day traders work in a compressed window of time. Let’s assume that a day trader buys 500 shares of a stock at 9 am. After half an hour, the price for the stock begins to rise and the day trader sells the stock. If the stock has a rise in price by $0.50 per share, the day trader will bag $250 minus commission. 

Some day traders use the scalping technique which aims at making small profits by following little price changes throughout the day. Range trading is also popular among day traders as it employs support and resistance techniques to determine decisions about buying and selling. As already mentioned, there is the third technique known as news-based trading. Traders benefit from the volatility that originates due to different pieces of news. Another technique is known as high-frequency trading (HFT) in which a trader uses algorithms to exploit inefficiencies in the markets. 

Day trading is the different form of trading known as swing trading. Swing trading involves selling of financial instruments and latter buying them at a lower price. It is a form of trade that has several people have invested their time and capital in. The potential for making profits is very high. However, it is also accompanied by the high potential of making huge percentages of loss. People who are terms as high-risk takers have the potential to realize good amounts of profits or huge losses. It is because of the nature of the trade. The losses are experienced because of several variables that are always present in trading. The gains and individual experiences are brought to light by margin buying.

There as a big difference between swing trade and day trade. The difference hails from their definitions, it goes a mile ahead to time spent in and risks involved in both forms of trade. Day trade has lower risk involvement, but one has to spend more of his or her time, unlike swing trade. Day traders are prone to participating in two forms of trade which are long trades or short trades. Long trade involves an individual purchasing the financial instruments and selling them after them increasing in value. On the other hand, short trade involves selling financial instruments and later purchasing them after their prices have dropped. 

The trading market has undergone through several advancements. The major change was witnessed during the deregulation process. There was the creation of electronic financial markets during this period. One of the major innovations was the high-frequency trading index. It uses heavy algorithms to enable huge financial firms in stock trading to perform numerous orders in seconds. It is advantageous because it can also predict market trends.

The process of day trading has several challenges. An individual is supposed to be able to make a good decision during two important moments. The first moment is during a good streak and the other is during moments an individual has a poor run. At this point risk management and trading, psychology comes in handy to help an individual in the trade. One is not supposed to panic or make hasty decisions during these moments. An individual needs to have an effective watchlist. A good watchlist built by a trader is supposed to be able to understand the modern trading markets. This is made possible when it features stocks in play, float and market capital, pre-market grippers, real-time intraday scans, and planning trade based on scanners. The success of day trading is also incumbent on effective strategies.

Overview of Day Trading

Before you start trading, look around the market and make your plan on which combination of currencies will you trade. This depends on the volatility of their exchange prices, which is based on previous research done on the past profitable exchanges. Planning also includes the time that you are willing to sit down and monitor the trades, make sure that you stick to the time scheduled to avoid messing up the already earned profit. Remember that choosing the time to trade should be at a time when the market is more active. The market will be there tomorrow and, therefore, when your scheduled time closes your trades. Strategy to be used throughout the time you are trading should also be thought out before you start trading, and it should be adhered to throughout the trading period in the day. 

When day trading, you have to know how to manage your money because at the end of the day you want to have money, not lose money. During the day, you will take part in several trades, and therefore you need to know the amount of money you will use to invest. You have to prepare for losses and gains, but the total loss you expect is of importance to avoid losing all your money at the end of the day. This starts by knowing the risk per trade; this is the amount of money you are ready to lose on one trade. If you are a beginner, it is good to set your risk at a maximum of 2%. The size of the account should also be taken into account. If you have a trade that according to you, has a stop-loss of close to 50 pips, if you risk $200, your risk will be $4. This is done by dividing the amount of money you are risking by the stop loss pips.

Always have a stop target before you start trading, and also consider the type of market you are trading in; some markets are so dynamic such that your stop order might not be executed as per the set value. Therefore, to be safe, set your stops using the actual price-action and the conditions prevailing in the market, it is good to set them around the resistance, and support levels, chart patterns, trend lines, and how volatile the currencies you are using are in the market. It is not only the stop loss position that you should consider during day trading, but also consider the point at which you want to take profits. For maximum profit, place appropriate levels of taking a profit.

Also, you should look at the reward-risk ratio, and when it is 1:1, it means that the amount you are risking equal to what you expect as a profit, and 3:1 has a triple amount to gain to lose. You can mix these such trades such that you have many with a high potential of gaining and few with an equal potential of winning. You can do it the other way around, but make sure that there is a balance that will leave you with some profit.

Although trading takes place at all times in the world, each market region has its hours of trade. Therefore, as a trader, you should know your market, and it's opening and closing hours. You should also know that trading is not good throughout a trading day, and trading is good when the market activity is high. We have four major trading markets, and each of them has it is opening and closing hours. However, some markets open around the same time. For example, Tokyo market open at 7 P.M and close at 4 A.M while the Sydney market opens at 5 P.M until 2 A.M looking at the opening hours of the two markets, there is a time when they are all open, and the, therefore, the level of activity with the currencies increases in the two markets between 5 P.M and 8 P.M when you are in the two markets, it is the best time to trade. This means that when more than one market is open at the same time, the trading activities are heightened, and the price of currencies fluctuates more. Therefore, maximize this by doing trades when the market is very active.

You should also be alert on any news release that can make the price of the currency to fluctuate as you look out for changes in prices. Remember that the news can go against the predicted trend, and if you had already taken a position, you can either lose or gain, and it happens in seconds. You can make money by reacting correctly and within the correct time in day trading. The news to look out for is the GDP data, trade deficits, central bank meetings and announcements, consumer confidence, among other big news affecting the economy in the region.

As you look out for the fluctuations in prices, stay in check not to open so many trades that you cannot control. Having many trades does not mean that you will get a lot of money. The best thing to do is to start your trade-in small portions. Identify three trades that show potential and monitor the trends; it is good to deal with two trades in a day that you will maximize on their profits than dealing with many that you will not make money on.

The amount of money made in the day also depends on the type of trading strategy used. To make more money choose a trading system that will give you more. When using scalping, it can help you to gain more, but you should increase the number of trades because the income obtained from one trade is very small. This is done when your main strategy is scalping. You can do more than one hundred trades in a day so that at the end of the day you have many wins than losses thus at the end of the day you have good money in your wallet.

If you are doing scalping as a supplementary strategy, you should use it when the market is not giving a large range in terms of the fluctuation of prices of currencies. In this case, most of the time, there are no trends in a longer time frame, and therefore using scalping in the short time frame becomes the best option to exploit. This way, you are assured that even without visible trends, there is a possibility that you will not end the day without money. This means that you initiate a long time frame trade, and as it develops, you start new sets of trade with a shorter time frame; it should be done in the same direction. You will then be entering and leaving the trade, as you collect small amounts, then later get a major profit with the long time frame.