The Ultimate day trading guide
File type: PDF
Pages: pages
Introduction
This ebook is over 29,000 words and
covers critical topics to get you started
in day trading.
This same resource would cost you
thousands of dollars if you tried to find
it on the web thru courses and books.
To help navigate this wealth of content,
there is a table of contents below that
you can use to jump to topics of interests.
Sit back, relax and enjoy the lessons
in this book which have taken years to
develop.
What is day trading
The act of buying and selling securities intra- day with the expectation of making fast profits within minutes to hours is known as day trading. Day traders come in all shapes and forms, using mechanical to systematic day trading systems, and can place anywhere from one to thousands of trades per day.
Type of Traders
Breakout Traders
Many day traders will trade momentum and focus on day trading breakouts above swing highs and swing lows while others will look to trade reversal setups after gaps.
Reversal Traders
Counter-trend traders will look for signs that a stock is topping or bottoming out before they place a trade in the opposite direction. For example, reversal traders use tools such as the TICK, TICKI, Put Call Ratio, volume, etc. to anticipate a change in trend.
Range Traders
Range traders find stocks that have been trading with in support and resistance levels and buy when a stock hits support and sell when it hits resistance. Range traders will be most successful
in markets that are choppy and that have no real direction.
Regardless of the type of trader, the most important aspect of day trading is the discipline to follow a set of rules and establishing your money management principles which you live by.
Day Trading Risks & Rewards
With the use of margin, many day traders can leverage anywhere from 2 to 4 times the cash balance of their account. While this can become very profitable, it can also lead to major losses, especially for newer traders who have not established their
loss management principles. In reality, most of the day traders that enter the game lack
the discipline to adhere to strict rules and end up losing large amounts of money. These
traders can be classified as gamblers. However, a disciplined day trader can take large sums
of money down if they have the appropriate systems and money management in place.
Day trading is an uphill battle for most because day traders do not only have to place a
winning trade, they have to first offset the commissions before they can go into a profit
position.