Basic Day Trading Techniques is an effort to teach day trading principles. There are more advanced concepts in my other books and seminars, but for those who are having a difficult time just plain making money every single month, then those advanced ideas may be somewhat wasted until they can appreciate the more basic money making skills.
Introductions:
Trading stocks and commodities can be a very financially rewarding endeavor if one has the proper education and approach, and is disciplined enough to follow strict rules. It is a fact that ‘return OF your capital’ is much more important than ‘return ON your capital’.
Needless risk taking and ignorance about what is to be expected is nothing more than gambling and what we want to do is speculate, not gamble. The difference between gambling and speculation is that in gambling the odds are stacked against you and set by the gambling establishment. In speculation we control the risks – when to buy and sell and at what price, how much to buy and sell, and how much to risk on any trade. Many times we can set those odds 90% in our favor.
The way we determine those risks depends on our approach. Many study ‘fundamentals’ like earnings growth, and project an assumed growth rate into the future and similarly assume that growth will translate into price appreciation commensurate with that growth- That’s a risky assumption but is the method 90% of all investors follow.
Because they cannot determine their risk they resort to extending the investment period to many years so they can rationalize short-term losses in the hopes of achieving long term gains. Wall Street is full of highly paid salesmen whose job it is to convince you that no one can predict the future and your only hope is to invest for the long run and everything will work out. I don’t believe in that philosophy.
I am a trader and a technical trader at that. I could not be successful if trends did not persist and could not be predicted with a certain amount of reliability.
Technical analysis is the study of price patterns and volume fluctuations. The theory, which really can’t be disproved, is that all known ‘fundamentals’ are revealed in the price action of the stock. Even if a company has a secret oil or gold discovery on its property, as soon as someone finds out it will show up in the price action of the stock as it goes up on increasing volume. The ‘fundamental’ news may be covered up for a year or more.
Some traders also are ‘tape readers’ as opposed to ‘chart readers’. Tape readers simply look at the ticker tape and various news feeds and watch the price action for unusual blocks of volume and up ticks or down ticks in price action. Horizontal support and resistance is the key here.
While this method has made millions for countless individuals I prefer chart reading for trading. The chart gives so much more information than just one day’s tape, and time cycle analysis can readily be applied to the chart patterns to predict the future. Basic Day Trading Techniques will show some of my methods of chart reading trading.
Contents:
- Where To Begin
- Stops
- Measured Moves
- Support & Resistance
- Square Roots In Time
- Angles
- Developing Trading Strategies
- Business Plan
- Basic Overlap Methods
- Basket Program Arbitrage
- Options
- How Do They Get Out?
- Volume
- What Goes Round Comes Round
- Gimmicks Short Time Exposure
- Pattern Trades
- Flags, Pennants, & Triangles
- Characteristics of Market Players
- Basic Time Cycles
- Putting Our Game Plan Together
- Moon Cycles
- Review of Charts: Entry and Exits
- The Jenkins Time Conversion Bar
- Recap On Basic Trading Steps
