Day Trading Strategies

Hi SwamiNathan,

In short words,

As long as stock makes higher tops and higher bottom,it is uptrend.
As long as stock makes lower tops and lower bottom,it is downtrend.

We can confirm it by drawing trendline.

If you are daytrader , then you can follow 5,10,15.. min time frame.

If you are swingtrader,then 30 min,60 min time frame is suitable.

If you are short term investor ,then go for daily time frame.

If you are long term investor ,then go for weekly time frame.

Time frame is subjective aspect.
Follow that time frame only which gives max returns.

Good luck.

Great reply,Sachin............in fact,contrary to a previous post,great article, and great in real practice.I also suggest that those who haven't read the 1st post by Sachin,go back to it,read it again........and again,and again.Great stuff,Sachin and keep em coming!!

Saint

Good going.Thread is showing good combination of Trading Psychology and technical analysis.It will definately work in real practise.

Keep up posting.

For whatever reason people make it too complex, it seems like 9 indicators on their screen is much better than two. A moving average is just too simple.... Well almost everydaytrader I know uses a 34 ema for trend direction and shorter one's to figure momentum I personally use Two moving averages. Don't throw out a simple solution to a simple problem.

Nice thread for day traders.

So you too trade with Mvg avgs... great. I hope we can share indisghts.
I've been doing the same and has proven really successful along with some risk managament strats.
However, there is always room for improvement.
Now the Quesiton
How can you detect sideways trend or whipsaws in a 5-min chart?
Hence reducing losses by not entering.

I dont have ADX in my software. Just macd and stoch.

Tks.

PS: isnt simplicity the bomb!!

1. Never, under any circumstance add to a losing position.... ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!
2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.
3. Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.
4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is "low." Nor can we know what price is "high."
5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.
6. "Markets can remain illogical longer than you or I can remain solvent,"
7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds... they shall carry us higher than shall lesser ones.
8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect "gaps" ; when they happen (especially in stocks) they are usually very important.
9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In "good times," even errors are profitable; in "bad times" even the most well researched trades go awry. This is the nature of trading; accept it.
10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market's technicals. When we do, then, and only then, can we or should we, trade.
11. Respect "outside reversals" after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more "weekly" and "monthly," reversals.
12. Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.
13. Respect and embrace the very normal 50-62% retracements that take prices back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than not, retracements happen... just as we are about to give up hope that they shall not.
14. An understanding of mass psychology is often more important than an understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.
15. Establish initial positions on strength in bull markets and on weakness in bear markets. The first "addition" should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.
16. Bear markets are more violent than are bull markets and so also are their retracements.
17. Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are "right" only 30% of the time, as long as our losses are small and our profits are large.
18. The market is the sum total of the wisdom ... and the ignorance...of all of those who deal in it; and we dare not argue with the market's wisdom. If we learn nothing more than this we've learned much indeed.
19. Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.
rule may be invoked!

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Nice one, success!

keep it up!

All the best

Suhas_79