What is Day Trading?
Day Trading has skyrocketed in popularity in recent years, with the internet providing instant access to a mass variety of brokerages and social media really influencing millions about the stock market it's no wonder everyone and their mother is trading nowadays?
But seriously let's explain day trading, Day trading is speculation in securities, specifically buying and selling financial instruments within the same trading day, such that all positions are closed before the market closes for the trading day. Traders who trade in this capacity with the motive of profit are therefore speculators. Although if someone holds an asset overnight I would still classify that as day trading personally. The jist of it is you want to buy something at a lower value then sell later at a higher value.
Trading is a way to generate income, whether it's some extra money to go on a vacation or you want to make it a full-time career let's discuss some strategies to be successful and ultimately profitable trading.
I will using the term asset throughout this guide, it could refer to a stock in the stockmarket, a cryptocurrency, a commodity like gold etc... it applies to all.
How to be successful Day Trading
Trading like anything in life, requires unprecedented discipline and risk management. Of course technically all you need is money and an internet connection to get started, without the 3 mentioned you will lose your money faster than the Avengers Endgame spoilers ☹.
With that being said it is totally possible to be successful trading any asset and really make a living doing it.
Here are some starter steps then we will talk about strategies:
Ok cool, now let's talk about profitable Day Trading strategies
Everyone finds success in a different way, I am going to be showing some profitable day trading strategies I have seen success in. You can take these and build onto them in the future (which I'd recommend) or you can create your own, in the end to be successful you need to manage your risk and stay disciplined.
It is crucial to backtest your strategies, once you start to develop a strategy please test that strategy with an asset in the past. Trying it in realtime is GREAT but you need to prove that it's consistently successful by testing it back in time.
These strategies are in no particular order.
This is the strategy I currently use and have seen success in, it doesn't mean you will but I want to show you.
Basically, you want to analyze an assets price around breaking a new high or low of day.
There is 3 checks you need to make before you take a trade with this strategy:
Let's take a real life example, Ford $(F) has not been doing very well and constantly going down in value. The macro move is that it's going down.
So with this strategy you would wait for a break of low or high of day and go short (bet that Ford is going down in value)