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- Herausgeber: WS
- Kategorie: Fachliteratur
- Serie: Investing Essentials - From Stock Market Basics to Real Estate and Passive Income
- Sprache: Englisch
Discover the Ultimate Duo for Traders Seeking to Mitigate Risk and Maximize Profits!
With insider technical analysis and risk management strategies, Samuel Feron provides valuable insights and actionable strategies to elevate your trading game and boost your profitability across multiple markets.
Trade like a pro with this book that combines two comprehensive guides on Day Trading and Options Trading to equip you with a powerful arsenal of knowledge and techniques for success in the fast-paced world of trading!
Inside, you’ll discover:
- Insider Technical Analysis: Unravel the intricacies of technical analysis and harness its power to interpret price movements, identify trade opportunities, and optimize entry and exit points.
- Risk Management Strategies that WORK: Discover effective risk management techniques and position sizing methods to protect your capital and minimize losses.
- Winning Strategies that all top traders use: Explore proven strategies tailored to each market. Gain a deep understanding of strategy selection and adaptability, maximizing your potential for profitable trades.
- The complete A to Z of Options Trading: From understanding terminology and pricing models to exploring various options strategies. Unlock the potential of options to diversify your trading portfolio.
- How to conduct precise technical analysis: Learn how to analyze price patterns, interpret indicators, and incorporate volatility analysis to optimize options trading decisions.
Whether you aspire to become a day trader, explore options trading, or simply enhance your trading skills, discover a comprehensive toolkit to succeed in the financial markets. Embark on a transformative trading journey and unlock your full potential as a successful trader!
What are You Waiting for? Scroll Up, and Get Your Copy Now!
Das E-Book können Sie in Legimi-Apps oder einer beliebigen App lesen, die das folgende Format unterstützen:
Seitenzahl: 150
Veröffentlichungsjahr: 2023
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Day Trading & Options Trading
Trade Like A Pro With Winning Strategies & Precise Technical Analysis to Succeed in Trading Stocks, Commodities, Forex, Futures, Bitcoin and ETFs in Any Market Condition
Day Trading Strategies
Options Trading
Samuel Feron
Copyright © 2023 by Samuel Feron
All rights reserved.
It is not legal to reproduce, duplicate, or transmit any part of this document in either electronic means or in printed format. Recording of this publication is strictly prohibited and any storage of this document is not allowed unless with written permission from the publisher except for the use of brief quotations in a book review.
This book is a work of fiction. Any resemblance to persons, living or dead, or places, events, or locations is purely coincidental.
Day Trading Strategies
Learn The Key Tools and Techniques You Need to Succeed in Trading Stocks, Forex, Options, Futures, Cryptocurrency, and ETFs Using Insider Technical Analysis and Risk Management
Samuel Feron
Contents
Introduction
Many years ago, the only people who could engage in active stock market trading were those employed by big financial institutions, brokerages, and trading houses. Online trading and the immediate transmission of news have leveled the playing field, or should we say trading? Retail investors can now try to trade like professionals more easily than ever thanks to platforms like Robinhood, TD Ameritrade, and Charles Schwab's 0% commissions and user-friendly trading apps.
One of the most contentious issues in the world of investing is day trading. A long list of well-known commentators fiercely contends that day trading in the financial markets is little more than gambling. These pundits fervently contend that long-term investing will typically outperform aggressive trading strategies over extended periods.
Day trading is becoming gradually popular as more people strive for financial independence and the flexibility to live as they choose.
Learning the nuances of this fast-paced day trading environment requires time and commitment. Still, with the appropriate knowledge and careful planning, you can place yourself in a position to earn a fantastic living.
Day trading has been characterized as little more than "high-risk, short-term speculation" by the investing icon Benjamin Graham, best known as the author of The Intelligent Investor. However, it is now easier than ever for the typical investor to start day trading because of the growth of the internet and the online trading platforms that have followed.
To help new investors learn about day trading, we have created a general guide to help them avoid some of the losses many traders experience at the beginning of their careers. We'll go over the fundamentals of what you'll need to start day trading and the fundamental approaches many new traders utilize to capitalize on the daily price swings in the financial markets.
We'll delve deeply into the world of day trading in this comprehensive book and explain what it truly is and how you may get started.
Introduction To Day Trading
Day trading is one of the most popular trading methods. Most financial markets, including those for stocks, foreign exchange, commodities, and cryptocurrencies, have active day traders. But is it a good idea for you to trade every day? How are day traders able to profit? Do you want to begin day trading?
Unfortunately, These questions have no answer, but this chapter will clarify what you need to know before you begin day trading.
What Is Day Trading?
Day trading is a type of trading method in which positions are started and exited on the same day. This approach may also be known as intraday trading since the trading takes place on the same day. Day traders try to make money from changes in a financial instrument's price using intraday trading strategies.
The phrase "day trader" comes from the stock market, where trading is only available during normal business hours. Since their goal is to profit from intraday price swings, day traders never leave positions open overnight in this situation.
The Benefits Of Day Trading
Day trading may be a lot of fun. Here are several benefits of day trading that draw people to this activity.
Trading Strategies
You can employ various trading strategies while day trading on all significant marketplaces. Breakout, trend-following, and counter-trend trading (mean-reversion) are common day trading strategies.
When trading a breakout, traders try to profit on the early volatility that follows a price breach of a significant technical level, such as a chart pattern.
When prices hit key levels and initiate pending orders, they tend to cluster above and below those levels, which causes a spike in momentum and volatility. As pending orders turn into market orders once the price reaches the pre-specified level, breakout trading also enables day traders to set a pending order to capture a breakout once it occurs.
Chart patterns like head and shoulders patterns, triangles, double tops and bottoms, triple tops, and bottoms, rectangles, wedges, and flags are common technical indicators employed by breakout traders. The volatility that follows a price break above or below a channel, trendline, horizontal support, or resistance level can also be used by breakout traders to their advantage. As their name implies, trend-following methods entail starting day trades toward the underlying intraday trend. Considering its appealing risk-to-reward ratio and high success rate, trend-following is arguably day traders' most popular trading method.
Wait for a price decline to be complete (for example, to a significant intraday Fibonacci level) before opening a trade in the direction of the underlying trend. Then, use candlestick patterns to determine when the trend will continue.
Opening deals opposing the underlying trend is a component of counter-trend trading methods. Counter-trend traders aim to profit from market corrections that follow a protracted and significant upswing or slump. Only seasoned day traders should employ this method because it is slightly riskier than breakthrough trading and trend following.
More Trading Opportunities
Day trading gives a lot of trading opportunities every day because it is a reasonably quick-paced trading style.
Day traders primarily use intraday periods, such as the 15-min, 30-min, 1-hour, and 4-hour ones, to make decisions. This is a key benefit of day trading since those timeframes provide significantly more tradeable setups than swing and position traders' daily or weekly charts.
Remember, though, that shorter-term periods typically have greater market noise, which can cause losses to mount quickly if your stop-loss settings are too low. Try to gauge the typical volatility of the securities you're trading (using the ATR indicator, for instance) and set your stop-losses appropriately to avoid this.
There is no guarantee that more trading chances will result in more profits. Always stick to your trading strategy and only make trades that are entirely consistent with it. Be careful to only risk a tiny portion of your trading account on each trade because risk management is important to the success of day traders.
Performance Evaluation
Because day trading entails opening and closing trades on the same trading day, you receive your daily results very quickly. Day trading makes it possible for traders to know if they are making or losing money daily.
In longer-term trading methods, traders often encounter unfavorable price fluctuations. To endure these swings, traders need a larger trading account and a great deal of patience and discipline to persist with their trades even when the going gets rough. Create and maintain a trading notebook with all the trades you make daily to track your progress. You can monitor your progress and search for trade trends that often cut into your gains or result in avoidable losses.
News Overreaction
The majority of traders on markets are humans, and people have a propensity to overreact to news. For this reason, even when specific news turns out to be somewhat inconsequential for the markets, there will be significant price changes. You can benefit more as a day trader if you take advantage of that behavior.
The actual amount is not crucial when trading the news, which is the most important thing to understand. What is important is how the actual number compares to the forecast. The value of the US dollar is likely to be significantly affected if, for instance, US non-farm payrolls come in at 200k when markets were expecting an increase of only 120k.
Tech Configurations
Day trading is a short-term strategy heavily influenced by technical levels. The emphasis swings from technical levels toward fundamentals as the trading window lengthens. Price changes can result from market noise in the very short term. Mean-reverting gains significance during the medium term, and changes and trends in the fundamentals over the long term produce trends in the underlying security.
Try to combine several technical tools when utilizing technical analysis for day trading, and only enter a trade once most, or all of the tools confirm a setup. Another name for this is a convergence of technical levels.
Disadvantages Of Day Trading
Being a day trader has several advantages. However, there are also some negatives. The following are the main drawbacks of day trading.
Increasing Trading Costs
Your trading expenses will be higher if you day trade than if you swing or position trade. Pick a broker with tight spreads and cheap trading costs because day trading necessitates opening more trades during the day.
Some brokers provide preset spreads, which may appeal to traders who wish to time their trades to coincide with significant news releases while minimizing trading expenses. If you intend to trade significant market reports, you should know that news releases often result in high market volatility, slippage, and greater trading expenses. These trading expenses can quickly pile up over time and decrease your profits.
Limited Potential For Profit
Day trading has a lower potential for profit than swing trading since day traders hold their deals for shorter periods and base their decisions on shorter timeframes. Additionally, traders close their positions by the close of business, regardless of profit. The potential rewards of promising trading setups are constrained, even though this method eliminates overnight risk.
Risk Of Excessive Leverage In Your Trading
In most markets, daily fluctuations are minimal. As a result, day traders use higher leverage levels to maximize profits and profit from minute price changes. Although it can be quite effective, traders who overleverage their transactions risk greater losses.
Because it has two sides, leverage should only be employed by your trading strategy. A precise risk management strategy should be developed to limit your leverage or risk in each trade to eliminate the possibility of failure (i.e., blowing your account).
Market Noise
You must deal with more market noise the shorter the timeframe you trade on. Market noise is chaotic and unpredictable price behavior without technical support or relevant news.
Market noise is a serious challenge for short-term traders, and the only way to prevent being stopped too early is to widen your stop-loss threshold. Look at the pair's historical volatility, and aim to place your stop-loss above or below recent levels of support and resistance to give the market room to move.
Setting Realistic Expectations
Those trying to make a living or supplement their income may find day trading a feasible choice. However, having reasonable expectations and being aware of the associated risks is crucial. This section will discuss how to have reasonable expectations for day trading success.
Recognizing The Risks Associated
Day trading implies buying and selling securities on the same day, often within a few minutes or hours. It is a significant risk of losing money despite the potential for high profits. Before engaging in day trading, it is critical to understand the potential risks.
Market volatility, which can result in abrupt and severe price changes, is one of the main risks. Unexpected news or events, such as political developments or natural disasters, may also impact the market. Another risk is that you won't be able to sell certain assets promptly and fairly due to insufficient liquidity in the market.
To reduce risks, it's critical to understand the market and the assets you trade thoroughly. It is also advised to begin with a little sum of money and grow it gradually as you develop knowledge and confidence.
Establishing Specific Goals And Objectives
In day trading, having certain goals and objectives is essential. It enables you to gauge your success and progress while keeping you motivated and focused. Before you begin day trading, consider your objectives and set attainable goals.
You should set SMART (specific, measurable, attainable, relevant, and time-bound) goals and objectives. For instance, your objective can be to enhance your success rate by a specific percentage or to make a certain amount of money each month.
It's crucial to have a strategy in place for accomplishing your objectives. This could entail creating a trading plan, strategy, and log to record your progress.
Create A Trading Strategy
When buying and selling stocks, you adhere to a set of rules and regulations known as a trading strategy. It aids in decision-making and prevents emotional trading. Creating a trading strategy takes time and work, but day trading success depends on it.
You can employ various trading strategies depending on your objectives, risk tolerance, and trading style. Trend following, range trading, and breakouts are a few popular strategies.
Make sure the approach you select is compatible with your objectives, level of risk tolerance, and trading style. Before trading with real money, test your approach on a demo account.
Manage Finances And Risks
Day trading requires both effective risk management and sound money management. They help in capital preservation and loss prevention.
One risk management method is setting stop-loss orders, which instantly end a trade when a specific price level is achieved. If the market turns against you, this helps you reduce your losses.
Managing your capital and spending is a part of financial management. It's crucial to establish and keep to a budget, refrain from excessive trading, and limit your exposure to certain securities.
Constant Improvement And Learning
Day trading necessitates ongoing learning and development. You must be abreast of the most recent advancements and trends because the market is continuously evolving. Reading news and analysis, attending classes and seminars, and picking the brains of other traders are all part of this.
Additionally, you should constantly evaluate your trading results and change your approach and plan as necessary. By keeping a record, you can discover your trading skills and weaknesses and monitor your development over time.
In conclusion, day trading can be lucrative, but setting reasonable goals and understanding the risks involved is crucial. You can maximize your odds of success in day trading by being aware of the risks, defining specific objectives, creating a trading strategy, controlling risk and money, and constantly learning and evolving. Remember that discipline, patience, and hard effort are essential for success in day trading.
Understanding The Financial Market And Market Participants
The term "financial market" refers to any market where trading in securities takes place, including the stock market, bond market, currency market, and derivatives market, among others. Capitalist economies cannot function well without financial markets.
Financial markets allocate resources and provide liquidity for firms and entrepreneurs, essential for properly operating capitalist economies. Trading financial holdings are made easy for buyers and sellers by the markets. Financial markets develop securities products that give a return to investors and lenders who have extra money and make that money available to borrowers who need it.
The stock market is one type of financial market. Financial markets are created through the buying and selling of various financial assets like shares, bonds, currencies, and derivatives. Financial markets primarily rely on informational transparency to ensure efficient and appropriate prices. The market pricing of securities might not accurately reflect their underlying value because of macroeconomic issues like taxation.
While some financial markets are small and inactive, others, like the New York Stock trade (NYSE), trade trillions of dollars' worth of assets every day. The equities (stock) market is a type of financial market where investors can purchase and sell shares of publicly traded companies. The primary stock market is where new stock issues, also known as initial public offerings (IPOs), are exchanged. Any extra trading in stocks takes place on the secondary market, which enables investors to buy and sell shares they already own.
Types Of Financial Markets
The characteristics of the financial claims being traded and the requirements of the various market players determine the various sorts of financial markets that exist. We can distinguish between several market types according to the kind of traded instruments and their maturity. Below is the common breakdown:
Stock Markets
