Swing and day trading for beginners: How to Make Money with Trading and Investing in the Currency Market by Managing Risk and Using the Best Strategies to Earn a Real Passive Income E-Book

George Graham

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

Beschreibung

CHART YOUR COURSE. CLAIM YOUR FUTURE. LIVE FREE. Ready to explore the trading world and reach financial freedom? This guide offers top strategies for making informed, secure decisions. During your commute, an old friend, George, discusses his success with trading. Terms like Swing Trading, Investing, and Risk captivate you. You ponder: Can I trade without facing high risks? This book delves into Swing and Day Trading, teaching you to maximize their potential. You'll cultivate a sharp mindset, manage investments smartly, strategically plan trades, and establish a passive income stream. But remember, jumping into trading without adequate insights can be treacherous. This guide prepares you to approach your financial independence with confidence. Ready to start your journey? Order now and steer your financial future!

Leseprobe

SWING AND DAY TRADING FOR BEGINNERS:

How to Make Money with Trading and Investing in the Currency Market by Managing Risk and Using the Best Strategies to Earn a Real Passive Income

George Graham

Table of Contents

Introduction

Chapter 1: Day Trading Basics

What Is Day Trading?

Why is Day Trading the Ideal Way to Make Money?

Ideal for Everyone

No Office Space, Inventory or Equipment

Can Work Alone

Minimum Time Required

Low Capital Investment

Instant Returns

Low Costs Incurred

Easy to Learn

How the Day Trading Process Works

Consider Constraints and Goals

Choose a Broker

Understanding the Market

Buy Orders, Sell Orders, and Setting a Stop Loss Price

Play Small Changes Up or Down

Play Quick Changes

Day Traders Make Multiple Trades Over the Same Day

It's All About Speed

It's All About Small Quick Gains

The Mindset of the Day Trader

Willing to Play above the Line

Have the Right Attitude

Disciplined

Open-minded

A fan of technology

Mentally tough

Independence

Patience

Future-oriented

FinanciallyFree

Enthusiasm

Experience and Familiarity

Honesty

High Levels of Commitment

Day Trading Plan

Why Do You Need a Trading Plan?

How to Decide on What and When to Buy

Analyze and come up with the right kinds of prices to buy

Focus and analyze a particular stock

Be disciplined and strictly stick with your plan

Time frame

Deciding When to Sell

Mental fatigue

Trading at the opening

Ending trading by 11.30

The last hour

Best day and month

Risks Involved in Day Trading

Financial Breakdown

Margin Borrowing

Market Movements

Day Trading Step-By-Step

Do You Have Enough Money

Be Honest with Yourself Regarding your Capabilities and Limitations

Have a Comprehensive Understanding of your Marketplace

How to Make Day Trade with Trends?

How Much Money Should You Invest in Day Trading?

Why They Are So Risky

How to Use Them

Why You Need Them

When to Say Yes and When to Say No

Buying Long, Selling Short

Day Trading Investment Options

Savings Accounts

Certificates of Deposit

Money Market Accounts

Stocks

Mutual Funds

Exchange Traded Funds

Bonds

Foreign Currency and Stocks

Real Estate

Chapter 2: Swing Trading Basics

What is Swing Trading?

How Does it Work?

How to Make Swing Trade with Trends?

When You Should Choose Swing Trading

Trading Platforms

How Does Swing Trading Differ from Buy and Hold Investing?

Swing Trading in Different Markets

Forex

Futures Market

Options

Equities

Cryptocurrency

Your Choice

How to Enter a Trade

How to Swing Trade

How to Swing Trade With Call Options

Picking the Right Trades to Enter

How to Find Support and Resistance

When to Enter a Trade

When to Exit a Trade

Where to Place Stop Losses (and Why You Need to)

Swing Trading Strategies for Beginners

Money Management

Time Management

Start Low

Education

Consistency

Timing

Demo Account

Conducting a Technical Review

Create Your Swing Trading Map

Candlestick Comparison

Placing a Stop Loss

Don’t Get Greedy

Consider the Risks

Trade With Peace of Mind

The Do’s of Successful Swing Trading

Premarket Preparation

Game Plan for the Next Session

Post-Market Performance Assessment

The Don’ts of Successful Swing Trading

Trade Emotionally

Lose Respect for Money

Become Complacent

The Best Tools for Swing Trading

Mini Charts

Mini Terminal

Tips for Swing Trading for Beginners

Make the best of Moving Averages (MAs)

Use a little leverage

Trade a wide-ranging portfolio of Forex pair

Maintaining a positive profit/loss ratio

Put aside your sentiments

Chapter 3: Swing Trading or Day Trading: The Difference

Day Trading vs. Swing Trading

Chapter 4: The Currency Market

Select Your Currency Pairings

How To Make Your First Trade

Select your currency pair

Enter the amount you wish to invest

Decide whether the price will increase or decrease

Don’t forget the stop loss!

Introduction to Fundamental and Technical Analysis

Fundamental Analysis

Technical Analysis

Technical Analysis Tools

What Is An Interbank Exchange Rate?

Factors affecting Inter-Bank Currency Markets

The Demand for Currency

The Supply of Currency

Exchange Rates and Interest Rates

Supply And Demand in Currency Markets

The Seesaw of Supply And Demand

Chapter 5: The Risks of Day Trading

Managing Risk in Day Trading

Identifying Risk

Analyzing Risk

Controlling and Handling Risk

Master Trading Psychology

Understand Your Motive

Never Stop Learning

Realize Your Goal

Identify Your Flaws as Well as Your Strengths

Allow Yourself Time

Have a Network of Fellow Traders

Love the Trading Market

Stick to What You Know

Keep Practicing

Don’t Be Too Excited

Create a Routine

Have the Proper Tools for the Trade

Have a Strategy

Understanding Margin Trading

Manage Market Risk

Using Risk-Reward Ratio

Chapter 6: The Risks of Swing Trading

Managing Risk in Swing Trading

Maximum acceptable loss

Taking a risk on any one trade

Increasing account balance to diversify risk

Information about your profile

Taking Time off

Journal and Check-ins

Risk Per Trade

Maintaining a Trading Journal

Basic Money Management and Diversification

Hedging Risk With Options

Leveraging Your Mindset

Controlling Addictions and Obsessions

Chapter 7: Stocks to Trades

Types of Stocks

Common Stock

Preferred Stock

How Are Stocks Traded?

Art of Purchasing Right Stocks to Trade

Keep Your Eyes Open

Turn to Corporate Presentations

How to Find Stocks for Trades

Choosing the Right Stock to Trade

Keep an Eye on the Volume

Analyze Your Position

Volatility

Social Media

Financial Services

Going Outside Your Geographical Boundary

Medium to high instability

Group followers

Funds Available

Liquidity

Industry

Emotions

Entry and Exit Strategies

Trade Weak Stocks in a Downtrend and Strong Stocks in an Uptrend

Trade Only with the current intraday Trend

Take your time. Wait for the Pullback

Take your profits regularly

Do not play when the market stalls

Chapter 8: Investment Strategy

Developing the Right investment Strategy

Choosing the Right Market

Pick a Market You Have a Lot of Interest In

Understand the Income Potential

Start with enough capital so that you give yourself a fighting chance

When Can You Day Trade?

Look at Market Correlation

Liquidity and Risk

Selecting a Timeframe

Choosing the Right Trading Approach

Market Selection

Capital Requirements

Leverage

Liquidity

Volatility

Creating a Personalized Trading Plan

Determine your risk tolerance

Ask yourself about your goals

Keep track of your progress

Conclusion

Introduction

In this book, we will talk about two types of trading: Day Trading and swing trading. Every beginner must understand both sections. To start your career as a successful trader, you should have some basic knowledge about trading. This book will help you to clarify your doubts regarding Day Trading and swing trading. This guide will show to the beginners how they should invest their money and which trade will give them more profit. 

Day trading is defined as the activity of capturing profit from the variation of stock prices during the day. In other words, Day Trading is about selling and buying stocks in a short time. 

Swing traders typically focus on getting profit by small gains in a very short period. Their position in the market may be held for several days or a week. They buy some stocks on the market and then sell them when they believe they can get a good profit on it. It is a process going on between a buyer and a seller. 

The Day Trading and swing trading are two of the finest strategies that have been in practice in the stock markets for quite some time now. These two are quite different from each other but also enjoy some standard features that can be detected in both types. 

Although most traders have similar goals, using several dissimilar trading types, they accomplish those goals. Trading types can be personalized to suit the occasion constraints of a trader, expectations for advantages, and personal strengths. There's not a single trading style that's superior to any other, but it's significant to recognize your style to synchronize and think about all of your future efforts.

Most people are confused about the difference between swing trading with Day Trading. In reality, swing trading is far different from Day Trading because Day Trading has lower chances of getting losses than swing trading. Also, in Day Trading, the time of trading is limited (one day), whereas in swing trading there is no time limit: it is indeed an overnight process. The market of swing traders works for 24 hours; therefore, the profit/loss chances are higher because the seller can face the downfall anytime. Swing traders are also rewarded by the leverage of 50%. For beginners, swing trading is the best option to choose because swing trading is easy and there are more chances of succeed with it. It is, in fact, less stressful for a seller and it is associated with higher success probability concerning Day Trading since time allows to improve accuracy in an investment decision. It is well known that swing traders have several opportunities and options to trade. They may get more opportunities to invest their money during the longer investment time-span. It is very important for a trader to be concerned about the price variation of their stock and be patient. After all, everything is all about profit and loss.

The main objective of this book is to help beginners in trading and teaching about the day and swing trading. I wrote this book so that it will help the coming generations to understand what day and swing trading are about so that they can invest their money on the type of trading that better suits them. 

ISBN 978-1-4467-3049-2

Chapter 1: Day Trading Basics

What Is Day Trading?

Day trading is the purchasing and selling of securities within a single trading day in any marketplace at commonly stock markets and foreign exchange (FOREX) to obtain a compound of short term loans. Day traders involved in this are fully investing in this trading activity with multiple learning sources, learning time and good kind of capital often end up being so successful. Being successful in Day Trading means acquiring large chunks of profit amounts.

A stock market is a vast place and there are millions of trades that take place all over the world, within a single day. There are both buyers and sellers in the market and they will all have the same motive in mind; to increase their wealth potential. 

Of all these trades, not everything will be of the same nature. Some will be long-term investments and some short. Long-term investments refer to those that are held for a long period. They are preferred by those who are not in a hurry to make money. Short-term investments on the other hand are those that are liquidated within a short period. They are not meant to be held for a long time, as the owners will be interested in disposing of them early. 

Short-term investments can be of many types based on the time that they are held. Some can be held for a month, some for a week and some will be disposed of on the same day. This book will focus on the last option. 

Better known as Intraday trading, Day Trading is one of the most preferred ways to trade in the stock market. Preferred mostly by those willing to part with their investment within a single day and realize a profit, or loss, from. 

Intraday traders are interested in realizing a profit by capitalizing on the difference in the rates of these securities as opposed to long-term investors who will be in it for the dividends. 

The thought of trading for a living has a lot of appeal to it. You are your boss, you set your schedule, you work from home, and you have unlimited income potential. Besides all of this, anybody that has a computer, internet, and a trading account can give it a shot. Unlike a lot of other jobs, there is no need for special training or a degree.

Since it is so easy to get started in trading, there are a lot of new traders that aren’t completely aware of the learning curve.

To make sure that you become a successful trader, it will take you a lot of effort and time. The following are a few facts that you need to be aware of about Day Trading:

During the first year of trading, about 90% of beginners will fail

You will not be able to eliminate every little bit of risk

There is not a single trading system that promises a 100% win rate

Even if you have studied everything you possibly can about trading and you are well experienced, you will still lose trades

You will need to have the money upfront to make money trading. It will take you a while to make a lot of money if you don’t have that much upfront capital

The successful independent trader can earn a pretty good income, but for the most part, they won’t end up millionaires

Just because it is extremely easy to get started with trading does not mean it will be that easy to make a large profit out of it and become successful. The majority of the 90% that fail at trading in their first year do so because they chose not to come up with logical trading or business plan. Any business that a person enters into with a lack of planning will more than likely fail. Another reason for their failure is that they are undercapitalized, which means they don’t have enough money to absorb an inevitable loss.

Why is Day Trading the Ideal Way to Make Money? 

There are various ways to make money, but one of the best ones so far is Day Trading. Here are a few reasons to support this concept:

Ideal for Everyone 

Day trading doesn’t require you to be of a certain race, education level, or gender – as long as you have the motivation and some money to spare, you are ready to go. So, whether you have a Ph.D. or you dropped out of school, you can still make money out of it.

No Office Space, Inventory or Equipment 

In addition to your smartphone and the computer, you don’t need to hire office space or stock any inventory. You don’t need to fret about monitoring expiration dates, shipping, spoiled goods, insurance, or advertising your products.

Can Work Alone 

Once you have access to the internet, you can work alone. The only team members are the ones that relate directly to your job such as the broker.

Minimum Time Required 

Whether you run your own business or you have a day job, you can get time to trade and make money from the venture. You can place trades for as short a period as an hour each week and then build it up gradually.

Low Capital Investment 

To take part in Day Trading, you don’t need to have a lot of capital. Here, we are talking of as little as $1,000 to start. The venture is not like buying real estate where you need loads of cash to get started.

Instant Returns

Do you remember when you could invest your money into a venture then wait for ages before you get the returns? Have you ever wished to stop the running investment, which at times doesn’t give any returns at all? For Day Trading, you can get your results within seconds of placing a trade! You can buy and sell the security again and make money several times a day.

Even if you lose a trade, you can recoup your losses by running another trade that you are sure will give you a profit.

Low Costs Incurred 

When trading, you pay less than $10 per transaction, which means that with the right trading model, you can make more profit on each trade compared to other trading methods. 

Easy to Learn 

As you will see in this guide, Day Trading is easy to learn. You don’t have to sit in a classroom for several years to master the ropes of this form of trading. Unlike other careers, you don’t need many years of experience to be relevant to the industry. Anyone can also learn to be a successful trader.

How the Day Trading Process Works

The first question to ask yourself is how big an investment are you planning on making in your Day Trading efforts? You need to consider not only how much money you’re willing to invest, but also how much time. Many investors look at Day Trading as an escape from their normal jobs, others see it as an answer to the uncertainties of the job market. While you may hunger to day trade full time, people do succeed as part-time day traders while working a primary job. Beginners may also want to spend some time simulating investments to get a feel for how comfortable you are with the process and how much talent you may have. People who want to start Day Trading should do several things to put themselves on the right path. Firstly, they need to step back and ask themselves whether this form of trading is really for them. Day Trading is not for the faint of heart. It requires a high level of focus and is not something people should risk their retirement plan to do.

Beginners should consider opening a practice account before committing their hard-earned money. Reputable brokerage firms provide such accounts or stock market simulators to aspiring traders, through which they can make hypothetical trades and see the results. 

Also, aspiring day traders need to have a suitable brokerage account before they begin trading. Some brokers charge high transaction costs, which can erode the gains from winning trades. Also, good brokers provide research resources that are invaluable to traders. 

Aspiring traders who discover that Day Trading is not for them should do what smart investors do, which is engaging in long-term investing in a diversified fund or stock portfolio. They should regularly add more funds to their accounts and let the magic of growth expand their investment portfolio. This may not be as thrilling as Day Trading, but it is better than doing something that will clean out one's savings. 

Consider Constraints and Goals 

Before investing the time, energy, and effort in learning or creating and then practicing Day Trading, prospective day traders should consider their constraints and goals. For example:

Traders need to determine whether they have enough capital to engage in Day Trading. If they lack the capital, they should wait until they have it while they are learning about and practicing different trading strategies. 

They should understand that achieving consistent gains takes several months to a year, even when practicing several hours each day. For those who practice intermittently, it will take longer to achieve success; therefore, prospective traders should put in the time and effort required to achieve their goals.  Once they start trading, they need to commit to trading for at least two hours a day, depending on their commitments. 

Until their trading profits match or surpass their income, new day traders should not quit their day jobs. They also need to determine the ideal time of day to trade based on their other commitments. Also, they should ensure that their trading strategy fits that time of day. Essentially, their trading strategy needs to fit their life. 

People who want to venture into Day Trading need to determine whether they want to do it to quit their regular jobs. To get to the point where they can replace their day jobs by Day Trading, prospective traders need to understand that they will probably need to practice and trade for a year or more, depending on their dedication. 

Aspiring day traders should consider the factors above before investing their time and money in learning this line of trade. 

Choose a Broker 

While new traders are practicing and developing their trading strategies, they should set aside some time to choose a good and reputable broker. It may be the same broker they opened a demo or practice account with, or it may be another broker. Choosing the right broker is one of the most important transactions day traders will make because they will entrust the broker with all of their capital. 

Understanding the Market 

It’s one thing to say you want to invest in stocks. It’s another thing to figure out what stocks you should be investing in. Investors break down the market into different sectors such as “retailers,” “manufacturers,” “utilities,” “airlines,” “energy,” “health care,” and others. Day traders can choose to target all these sectors or choose to specialize in one or more. As a beginner, focusing on one sector may be advantageous, particularly if it’s one you’re already familiar with. 

Since as a day trader, you’re interested in identifying opportunities for small, changes in stocks, not long-term growth. This means you’ll need ample funding. Be aware too, that if you don’t maintain your maintenance margin amount, you can receive a margin call. In planning for your trading account, it would be better to have more funds available, since that would make more stocks available for your consideration. Remember too, it’s usually more cost-efficient to buy shares in multiples of 100, meaning a small investment kitty will either limit you to cheaply priced stocks or buying stocks in smaller increments than are less cost-effective. If you can devote more funds to your trading account, you’ll be able to pursue more opportunities and have the wherewithal to recover from losses. 

Buy Orders, Sell Orders, and Setting a Stop Loss Price 

Not every move a trader makes must be executed immediately or at random. You can tell your brokerage you only want to buy or sell a stock when it hits a certain price. The risk, of course, is that the stock may not hit that price while you have money planned for it.