Day Trading Strategy

#DayTradingStrategy

🎯 What is Day Trading?

Day trading involves buying and selling assets within the same day to profit from small price movements. You close all positions before market close to avoid overnight risk.

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📌 Key Principles:

✅ Trade with a plan (entry, stop-loss, target).

✅ Focus on liquid assets (BTC, ETH, NASDAQ stocks, major forex pairs).

✅ Use technical analysis (TA) for entries and exits.

✅ Control risk per trade (max 1–2% of capital).

✅ Use leverage carefully if you understand it.

✅ Avoid emotional decisions; stick to your plan.

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⚡ Step-by-Step Day Trading Strategy

1️⃣ Pre-market preparation

Check market news and economic calendar (NFP, CPI, FOMC events).

Identify key support and resistance levels on your charts.

Note the trend (bullish, bearish, sideways).

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2️⃣ Trade Setup

✅ Use breakout or pullback strategies:

Breakout: Enter when price breaks a significant level with volume confirmation.

Pullback: Enter when price pulls back to support in an uptrend or resistance in a downtrend.

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3️⃣ Technical Indicators (Optional)

Moving Averages (EMA 9, 20): For trend direction.

RSI (14): Overbought (>70) or oversold (<30) confirmation.

VWAP: Acts as dynamic support/resistance during intraday trading.

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4️⃣ Entry and Exit

✅ Entry: After confirmation (candle close above resistance or support hold).

✅ Stop-loss: Just below recent swing low (long) or above swing high (short).

✅ Take Profit: Based on risk-reward (1:2 or 1:3 is ideal).

Example:

Account: $10,000

Risk per trade: 1% = $100

Trade risk: $0.50 per share

Position size: $100 / $0.50 = 200 shares

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5 Trade Management

Move stop-loss to breakeven when price moves in your favor.

Scale out partial profits if your target is near or momentum slows.

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🚫 Common Mistakes to Avoid

❌ Overtrading and revenge trading.

❌ Trading without a stop-loss.

❌ Risking too much per trade.

❌ Entering without confirmation.

❌ Letting emotions override your plan.

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⚒️ Tools for Day Traders

TradingView (for charts and alerts).

CoinGlass (crypto) or MarketWatch (stocks) for news and pre-market data.

Position size calculators to manage risk.

Use screens with multiple charts if possible.

🪙 Example (Crypto Day Trade on BTC)

BTC trending up, key resistance at $111,000.

Wait for breakout above $111,000 with volume.

Enter at $111,300.

Stop-loss at $110,700.

Target at $112,500 for a 1:2 RR.