Get Out Of Debt

Investors who know what they are doing are always looking for ways to make money. It is practically an American institution. But there’s a basis why they dub it a plot, which characteristically means a deceitful or covert arrangement of action. The simple fact is that most schemes that promise to make you millions with day trading, most likely have about as much success as spinning roulette wheel. Ya, it is correct that many day trading systems are few more that informed gambling, but they are gambling all the same. Day trading itself is a form of gambling, as you are betting you can time the stock to enter and exit in a few minutes or seconds with a profit.

What will it take to make a good day trade? To begin with, you need to understand that there is no such thing as easy money. You should not approach day trading with the expectation you will make millions. Day trading is all about making small profits several times a day which eventually add up. A day trader that know what their doing will proceed quite cautiously on any particular day trade. Instead, they buy small numbers of shares of companies that they’re familiar with.

How do day traders know which stocks to trade? Most commonly, traders will choose stocks that they are familiar with. After reviewing all the numbers and watching them for weeks at a time, a trader may eventually gain the confidence to start trading a stock.

Though there are a number of different strategies that day traders employ, most day trading strategies rely heavily on technical analysis. Technical stock analysis means that traders believe that he can detect patterns in the way a stock trades by looking at charts. Most days you may discover a certain stock will move in a tight trading range. This might mean that a stock only moves a few points a day. For instance, it may open the day at 33, move up to 36, and end the day at 34. It is the job of the day trader to keep tabs on these trades and see if he can discern a predictable pattern in these daily movements.Learning to watch and pay attention to these types of regular volatility patterns will really pay off in the long term for anyone looking to day trade.The real key is to try to concentrate on just a few select stocks in the beginning so that you do not go down the path of information overload.

This strategy may seem a bit simplistic, but it is a proven winner. A basic requirement is that a trader take a few stocks, watch closely each day, and try to become an expert at them. It won’t take very long before the trader will feel able to take on making a day trade. While this approach probably will not help you to become rich overnight, you should be able to earn some profit numerous times throughout each day, which can add up to a significant income over time. It isn’t unusual for day traders to trade the exact same stock over a hundred times each day.  This is because they believe they have discovered the secret to the successful day trade and that the more they trade the more they will make.

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An odd thing happens if you put up a stock price chart and ask a bunch of people what the trend is.  Even when its completely obvious to someone like me, as in not any question at all, you will still get many different answers based on the exact same chart.  This stems from many people not knowing the proper method to actually find the trend on a chart.  It is actually quite simple, and is a key thing to know if you want to learn to trade.

The first thing to do is to size the chart properly.  There is no point of putting up 5 years of data if you are looking for a daytrade to hold for 5 minutes - that is completely pointless.  So here is a guide for what you need as far as time loaded on a chart:

Daytrade:

1. 1 min chart:  Have at least 2 hours of data (120 bars) on the screen but no more than 6 hours (1 full day).
2. 2 to 5 min chart: Make sure you have at least 3 hours of data up, but no more than 2 days.
3. 10-15 min chart:  Have at least 3 days of data up, but no more than 1 week.

Swing Trades (longer term hold) you will want a 10 to 30 minute chart up and you will want at least 10 days of data up on the screen.

You will want to make sure you are using a "bar chart" style of chart, and not "candlestick" or other types.  This is easier to see the trend.Start by looking for every V bottom area.  Anytime there is a low with a V bounce, make note of it.  In addition, look for / top areas where it spikes up then sells off.Focus in on the major ones where it moves significantly away from that area in a short period of time.Next you will want to get your charting draw tool and connect the V to each other V you see.Connect the / to each other /.Connect the low areas on the V, and then the highs of the /.  Again, this is a key to learn how to trade.

Lines that slope from the lower left up to the right means the stock is in an uptrend.  Lines that slope from the upper left down to the right means the stock is in a downtrend.Another easy method: Go to the first bar on the left, and then to the very last price on the right hand side.  Draw a line between the two.  If the line is sloping up - its an uptrend.if the line is sloping down to the right, then the trend is a downtrend.  The other key thing to look at is the oscillations around this trendline.Does it go up and down 2pts, up and down 1pt, up and down .50 etc - remember, all that is needed is a rough average, not an exact number.This gives you a decent sense of the trend strength.  The lower the oscillation, the stronger the trend.The thinking here is that the price hardly oscillates because the buyers in an uptrend chase is up and bid, and the sellers in a downtrend chase it down and offer so it does not really counter move much.

Another thing to keep in mind the more you practice, the faster it gets - the lines are no longer necessary.I can glance at a chart and know the trend and approximate strength within seconds.Additionally, you really need to know the trend direction and strength on the next higher timeframe than you are trading on.  For example, on a 5 minute chart the trend might be up, but on a 15 minute chart it is still down.  This needs to be paid attention to, because the longer term trend can push the shorter term trend back into a downtrend.Overall, you want your higher term chart to be a time multiple of about 3 from the chart you intend to trade.  So if you are on a 1 min chart, you watch the 3 min chart also, if on a 5 min chart, you watch the 15 min chart.  Once you can easily tell the trend of any chart, other aspects of learning to trade become much easier.

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