To win consistently at day trading, we need to love what we do, because it involves a lot of screen time.
Day trading is our prefered trading timeframe because we are in control, on a moment by moment basis – we do not wander off and leave our trade to ‘hope’.
That said, day trading, more so than the higher timeframe of trading requires a fresh, well-rested head. Any sign of tiredness, or distractedness, will show, as clear as day, in our trading results.
This week and the coming few weeks, with the opening of our extension to our family business, the distraction and the tiredness is there, and we have modulated our trading to balance this.
Our first trading timeframe is the 5-minute chart. However, we will use as low as one-minute charts to get a better read on a 5-minute chart entry.
Whenever we see a complete chart, the entry and exit points can quite quickly be given by an 8-year old. However, to find good entry and exit points consistently, in real-time, requires at least 10,000 hours of dedicated chart time.
Below is a trade we took yesterday on the one-minute chart. The deal went against us initially, but our long stop and reading of the chart left us with a profit. Any other trader would have traded differently, and on another day with the same trade we probably would too, but this is how it ‘panned out’ for us.
We entered the trade short (that is for the price to go down) with a scalp and a swing at the blue arrow (I’ve saved you from the multiple trend lines and measurements that go into finding this entry). We had a full stop of 60 pips.
To the eagle-eyed trader, the ‘price action’, shown in the yellow box, was a signal to get out of the trade. However, we held, and it was only at the red arrow (actually, it was slightly higher than the red arrow shows, and therefore marginally slower than the eagle eye!) that I got out of our scalp at a small loss.
The swing portion of the trade went against us for over an hour where another scalp entry presented at the green arrow. The scalp entry would be taken off at the grey arrow and the swing at the yellow arrow. In actuality, we did not take the green arrow entry and took the original swing off a little above the grey arrow.
When a trade does not go our way immediately (and the law of trading probability says that sometimes they won’t) it needs a cool, well rested, head to deal with it and achieve a profitable outcome.