The Wild World of Day Trading
Posted: Sunday, December 12, 2010
by Jay DeVincentis
Investment Research Group, Inc.
When I first got into trading, over a decade ago, I thought I knew what day trading was.
Boy, was I wrong.
Even after I absorbed everything there was to know about trading - there is always something else to learn.
Here are some of the things that I learned.
Day trading is probably the most challenging form of trading there is. I like to call it trading on steriods, as everything in trading is fractal, almost any style of trading can be micronized (not even sure if that's a word) into a day trading style. But...
OK, now that I've alerted you to the pitfalls, let's talk about certain things you need to know.
First - pivots - if you don't know what these are? Then you're not a day trader. And there are two types of pivots. Time and price.
My first day trading book focused on combining japanese candlestick charting with the morning pivot to make one profitable day trade in the high energy period - so you're done day trading in the first 1-2 hours of the trading day and off living your life.
I believe in the 80/20 rule, meaning 80% of your profits will come from 20% of the time. And the best period to trade is from 9:30 to 11:30. After that period, the market goes to sleep, and so will you if you sit in front of your screen most days during this period.
Price Pivots. I email price pivots to my clients every morning. These are precalculated areas of potential support and resistance that almost every day trader I know are watching. And you should be too.
What else do you need to know? What's going on in the S&P Pits. I listen to this pit feed during the day and 90% of the time, there's nothing going on. But that 10% of the time can be very telling.
This just touches on a few areas. I encourage you to join some sort of chat room with other traders (as long as they are trading) and learn from the community environment. That's what I try to create with my services.
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