[quote]Hold Up wrote:
Market is at all time highs in Cash Indexes and now everyone wants to be a Day Trader.
I could start writing and not stop all day… but here it is in short:
Best advice I can give for Day Trading. Not a timeframe longer than say a Day or Two (My assumptions for most that want to daytrade):
Don’t use any indicators or moving averages. Each day is different, new…past data has no significance.
Only use price. Previous close, current prices.
Key off intra day highs and lows. How does price act or react when it reaches those points.
There are “filters” or correlations you can use to help confirm…but that takes experience and education.
Avoid shorting until you’ve gained considerable experience.
Use some sort of stop (based on volatility is what I do) and let your profits run with the direction of the trend if it goes in your favor…raising your stop as it does. Essentially “hope” it goes up to infinity. You will miss the big moves if you don’t. Take quick satisfaction in selling at a loss…and procrastinate selling when at a profit. If you cant do that, I think someone mentioned selling in increments. That way some of it can “run”.
I personally don’t “risk” a certain amount based on a percentage or profit target… instead I use oscillations of “exposure” based on my levels of “aggressiveness” depending on my filters or how well things are correlating that I look at.
Trade infrequently. As a boxer may go several rounds before taking a knockout oppoertunity. Or letting strikes go by until you get a fat pitch. That comes with experienc too. SO your first objective is to survive in trading while you learn, and pay the tuition costs.
For what its worth.
Strongly agree with only using the price and no indicators.
However I disagree with 2 important points you make.
1.The time frames. Why avoid higher time frames? I avoid lower time frames. If the time frame is lower the impact of market noise is way more important.
2.Avoiding shorting? Why would you do that? By avoiding shorting you build a directional bias in your trading. In the 90s with bullish markets this would have worked. However since 2008? Not so much.
1 - Wasnt trying to advise to avoid higher time frames. My understanding is the OP question was in regards to lower time frames.
2 - For less experienced traders I don’t advise shorting. Mainly to avoid whipsaw action, increased trade frequency, resulting higher odds of substantial drawdown. If good discipline is used…it is very hard to lose money at a higher rate than chance when you take a directional bias to your trade and that bias is wrong…because then you shouldnt have a trade on in the market. Also, of course the stock market has a built in edge of a historical uptrend and shorting is going against that bias.
Now, I don’t have anything against shorting and I do short… but I just believe MOST should avoid it until they have enough time behind the wheel. I think shorting is a different ball game in the stock market than going long. If you’re talking currencies, commodities, etc, etc. Well…have at it. Everyone needs to find their niche and everyone has their own particular strengths and weaknesses.