How to Start Day Trading in 2022 consists of opening and closing a position during the same trading day.
The day trader typically uses 1 hour (H1) and 15 minute (M15) timeframes to analyze the underlying market trend, then charts from 1 minute (M1) to 5 minutes (M5) to place its inputs and outputs.
Enter a position at the very beginning of each impulse, and close his stack trade when the impulse stops.
Day Trading: The Different Strategies
There is not one but many ways to day trade and capture these bullish and bearish impulses. What differentiates them is the technique used to choose its entry points.
Scalping Involves
Closing your trade almost as soon as it goes positive. This leads the scalper to hold his positions for only a few minutes, and to multiply them during the day. Widely used to trade Forex.
Fading Involves
selling an asset that has experienced sharp upside movements. The underlying idea is that: 1. either this asset is overvalued 2. or the holders are about to cash in their profits (and therefore let go of the stock). Strategy quite risky and widely used to trade stocks.
Momentum Involves buying based on rumors and news only. The day trader will track economic announcements, publications of financial results, and peaks in volume at the origin of a strong movement. The idea is to place your trade and hold it until a trend shows signs of reversing. Widely used to trade Stocks and Indices.
Daily Pivot Points Involve trading an asset within the upper and lower bounds of its price. Here the day trader tries to buy the asset at its lowest, to sell it at its highest. It also takes into account intermediate high points. Widely used for Cryptocurrencies.
Day Trading: Profit Taking
In day trading, there are four scenarios that lead the trader to close a winning position:
A take-profit reached:
The profit target is reached, the price has managed to reach the desired price level
A Reversal Candlestick:
following a bullish wave, a candle in the shape of a hammer or a shooting star indicates an imminent reversal in price
A Zone of Resistance (Or Support):
The price is approaching a recent high, which makes a return to the downside likely once this price level is reached
A Detected Divergence:
A divergence occurs when an indicator such as the MACD indicates the beginning of a bearish movement, while the price continues an upward movement
Advantages of Day Trading
Because it targets smaller price movements than in swing trading, the day trader will see more trading opportunities during the day. All the more so on volatile assets such as Bitcoin, the GBP/USD pair or the DAX 40 index.
Due to multiple positions taken during his day, the day trader can start with limited capital.
The day trader can choose his hours and manage his time according to the opening hours of the market on which he trades.
Day trading involves specialization. No one is able to follow 10 markets simultaneously! Forex traders, for example, favor two to three pairs to trade, no more
The Juiciest Market in Day Trading? To Analyses
Day Trading Forex
Forex day trading is very popular. It is a very liquid market, with a large selection of currency pairs.
Let's add that the forex market adapts very well to an intraday investment strategy, avoiding rollover (or overnight) costs. It is a first choice, especially in day trading for dummies, especially for scalping.
Day Trading Crypto-Monies
The cryptocurrency market is becoming a mainstay of online trading platforms. It is possible to make handsome profits with cryptocurrency day trading.
Altcoins are particularly interesting because they are very volatile. In the bear market, they can take a drop of up to 80%. Profiting from their volatility with short and long orders is the job of the day trader.
Learn more: property management companies in Dubai