Whether trading crypto or stocks, the key to achieving high profits in day trading is the same: setting a reasonable position size between set risk and return.
A reasonable position size between a given time frame. In this article, we will explore how to increase your account by 2%-4% in a trade in minutes.
If we earn 2%-4% (or even more) in 40% of our trades, and only lose 1% in other trades, we will be able to.
Make a lot of money. It's even better if we can win 50% or more of the trades.
It sounds simple, but most people completely misunderstand the core concepts of generating high day trading returns.
Most people think that using wider stop-losses (to prevent being triggered) and very large target positions is the way to make money. But in reality, to be.
To make big money in day trading, we wait for opportunities that allow us to set small stop-losses and then set target positions within the typical fluctuation range of the price, ensuring a reasonable profit-to-risk ratio.
There are many ways to trade, and different styles suit different personalities. This is one way, and it's a good way if it suits you.
Here are four steps to make high profits in day trading:
1. Risk no more than 1% of the account per trade (less to begin with).
2. Use the smallest stop-loss allowed by price action. This sounds like common sense, but there's no reason to stubbornly hold onto unfavorable trades. Even if.
Set a small stop loss, I usually close the stop loss before the stop loss is triggered.
3. When profitable, take profits and exit at 2 to 3 times the stop loss. This ensures that profits are far greater than losses. In some cases, slightly smaller targets.
Targets (such as 1.5x) are acceptable, while larger targets (such as 4x or more) may also apply.
4. Only trade if the target position can be reached by typical price fluctuations.
Each of the above steps will work together to help you identify high-value based on the typical behavior of the price (not luck, nor relying on extreme conditions).
Return, low-risk trading opportunities.
You will also notice that to achieve good day trading returns, you don't need long hours of staring at the screen or learning a lot of strategies. Every big only need.
30 minutes to a few hours, find the right risk-reward opportunity, and master one or two strategies, you can get excellent profit performance.
1. 1% Risk Principle
Before we can make big money, we must first learn to control risk. If we lose our principal, we won't earn anything.
Adopt the "1% Risk Rule." This means we can only lose a maximum of 1% of the total account funds per trade. We can.
Use all the funds in the account (or even more if using leverage), but the loss cannot exceed 1% of the total funds.
For example, if our day trading account has $45,000, we can use all of this money (or even add leverage) to open a position.
Easy, but no more than $450 can be lost per trade. This concept applies to any account size.
When starting to trade, lose no more than 0.1% per trade. If you are consistently profitable at this risk level for several weeks, you can increase the risk.
To 0.2%, 0.3%, and so on.
It is important to note that as the account size grows, it becomes difficult to continue using 1% risk, because that means the position size will be very high.
Very large. But by then, you've already made a lot of money, so it doesn't matter.
2. Minimum stop loss allowed by the market
Now we know how many dollars we can lose per trade - a maximum of 1% of the account.
Next, we need to wait for times that can bring small stop-loss entry opportunities.
Stop-loss orders mean that we will immediately close our position when the price reaches the specified threshold. This is one of the easiest ways to control the risk of each trade. Many people make mistakes here.
Let's look at the example of two traders: one is a professional day trader and the other is a novice.
The figure below (1-minute chart) shows a possible trading opportunity. The entry position is good: the price is trending upwards after the opening, then there is a pullback, and the trader enters when the price starts to rise again. This is one of my favorite trend trading strategies.
Novice traders are afraid of losses, so they choose to set a large stop loss. He puts the stop loss below the opening price of the day or the low of the day. In this case, it means the stop loss is 5.46% away from the entry price, or $0.78.
They (beginners) think they are smart because they put the stop loss below a major wave low, and the price has to fall sharply.
Will trigger the stop loss.
Recall that our traders can lose up to $450. In this trade, they risk $0.78 per share, so.
They can buy 576 shares ($450 ÷ $0.78).
Professional traders are not too worried about losses. They know that loss trades are always inevitable no matter where the stop loss is set. Therefore, they are more.
Tend to set smaller stop-losses, so they can use larger position sizes; if the judgment is wrong, they can quickly stop-loss and exit, not.
Wasting time on directionless trades.
Professional traders enter because the price is going up. Therefore, they choose to set their stop-loss at the most recently formed local low.
Below. This stop loss is only 1.75% lower than the entry price, which is $0.25. This is only one third of the size of the stop loss for novice traders.
One.
The specific size of the stop loss varies depending on the trading variety and specific circumstances, so the actual value does not matter. What matters is the comparison between the size of the stop loss between novices and professional traders.
Can only lose a maximum of $450, but the professional trader's stop loss is only $0.25, so they can buy 1,800 shares.
Without knowing any other information, who can make more money if the price goes up?
Of course, it is the professional trader, because they hold 1,800 shares, while the novice only holds 576 shares, but they both bear a risk of $450!
3. Target a multiple of the stop loss or risk
For beginners, the situation will get worse. Not only do they bear the same risk as professional traders, but they also hold fewer shares.
Shares, and it is also difficult for them to achieve the same returns as professional traders.
Ideally, we want to earn 2, 3, 4, or even 5 times the stop-loss amount in a winning trade. Because our stop loss.
Represents 1% of the account, and if we can earn 2 to 3 times the profit, it is equivalent to an increase of 2% to 3% in the account. But the larger the stop loss, the harder it is to achieve this kind of return!
When trading coins, I usually set the target at 2.5 times the stop loss (between 1.5 and 3 times). When trading stocks, I will set the target.
Set at 2 to 3 times the stop loss. Let's see what happens if professional traders do this.
Works very well.
A stop-loss of $0.25 is relatively small compared to the price fluctuation on that day, so let the price rise $0.62 to $0.63 (up.
An increase of approximately 4.37%) to reach the target price (0.25 x 2.5) is not difficult. We will discuss the rationality of profit goals further in the next step.
Expectations. But in this example, the professional trader's account rose 2.5%, and the entire trading process only took 14 minutes. Matter.
In fact, they can achieve a 2% account return in 5 minutes.
As for beginners... the situation is not good. Although the stock did go up, and they were "right" in the direction, their account almost never showed more than 1% profit, and eventually this small profit may disappear immediately.
This novice will either leave with a loss or barely make a profit, but the profit is far less than the risk they took. If they are at the price drop.
Exited before the stop loss, perhaps only earning $100 to $300 (despite taking on $450 in risk).
The professional trader easily took a pure profit of $1,125 and closed out the position before the price started to fall again.
Novices set larger stop losses because they try to "avoid losses," which makes it almost impossible for them to achieve higher percentage returns on their accounts.
Professional traders use smaller stop-losses, making it easier for the price to reach the multiple target of the stop-loss, thereby realizing it in just a few minutes.
Realize a 2.5% increase in the account (and this transaction even only used slightly more than half of their funds - the remaining funds can be used to trade other stocks).
4. Only trade when the target/multiple is reachable
How do we know if a goal is reasonable?
Is the novice's goal reasonable? Since the stop loss is more than 5%, the price must rise to achieve a 2:1 risk reward target.
At least 10% (from the entry point). Do you think this happens often? Even if it does, is it usually done in minutes?
Is that professional trader's goal reasonable? In this example, it is. At the time, this stock (MARA) was on the "Best Day Trading.
Easy stock list" and typically fluctuates about 12% between open and close. In comparison, professional traders capture 4.37% gains.
Is much easier than a novice trying to capture a 10% to 15% gain (plus a large stop loss, totaling far beyond the stock's average daily fluctuation).
For this type of stock, professional traders may capture 3% or 4% fluctuations multiple times a day.
A simpler method is to look at the length of the price waves to date. This will give you a reference range for how far the price can run, and then set the profit target conservatively, try to set it to be less than the wave that has already formed.
In the initial rise, MARA rose $1.23, about 9%. Then there was a pullback and then it started to rise again. If we.
Planning to go long means that we expect the price to rise again. But for the sake of stability, we want to set the target within the previous wave (below 9%).
The professional trader's target (2.5 times the stop loss) only needs the price to rise to about 2/3 of the previous upward trend. Therefore, professional trading.
Used a conservative target but still achieved 2.5% account growth. In contrast, novices set unrealistic targets, far beyond the day's existing wave length, and therefore end up with small points or even losing money and leaving the market.
A final summary of how to make high profits from day trading Whether trading coins or stocks, the above principles are universal.
If a product does not fluctuate much - for example, EURUSD usually only fluctuates by about 1% per day, while crude oil or some stocks may fluctuate every day.
Volatile 5% or more - then we may need to use leverage to achieve a trading size with a "1% account risk." And for volatility.
Large assets, we may only need to use a small portion of our funds to reach the 1% risk exposure. But this ultimately remains flat overall.
Balance, so no market is necessarily better than another. As long as you understand these trading concepts mentioned in this article, any market has the same profit potential.
By only making one trade a day, it is possible to obtain considerable day trading profits. This transaction may only last a few minutes.
High profits don't depend on long hours of staring at the screen... although we do need some screen time to spot opportunities.
The real key is: clearly set your risk limit; patiently wait for small stop-loss trading opportunities (the smaller the stop loss, the larger the position size, while the risk.
Still kept within 1% of the account); then take profit with a reasonable multiple target (e.g., 2x or more), which should be achievable based on the market behavior or volatility characteristics of that asset on that day.
You can experiment with these methods in a demo account first. It takes time and practice to master how to correctly set the position size for each trade, how to place orders correctly, and how to evaluate opportunities that are worth taking.
BTC ETH