From Larry Williams' experiences of making $2 million from $10,000 in one trade, and $200,000 from $50,000 in another, it can be seen that short-term trading can indeed help traders accumulate wealth in a short time.
However, some traders feel that those who can quickly earn so much money through short-term trading exist only in legends. In fact, there are also skilled traders in the country who have achieved stable profits and success using intraday short-term trading.
01 Choosing Instruments: Not all currency pairs are suitable for intraday short-term trading. To make a profit in intraday short-term trading, you must first choose the right instruments.
Only those currency pairs with high volatility and liquidity can allow traders to quickly make profits.
Since you want to make quick money, you should choose active currency pairs.
02 Choose Time Framework: Intraday short-term trading is also divided into several types: some use the 1-minute chart for scalping; some use the 3-minute chart for small waves; some use the 15-minute chart for intraday trends.
Therefore, to do well in day trading, you must first set a time framework for yourself.
If you have abundant energy but poor psychological resilience, you can only choose the 1-minute chart;
If you do not want to trade too frequently, you can choose the 3-minute chart;
If you just do not want to hold overnight and need to trade once or twice a day, the 15-minute chart is sufficient.
03 Building a System: Whether for long or short-term trading, you must have a system that at least covers the following aspects:
1 Timing of Entry — Under what conditions to enter?
Regarding this point, here is a model reference:
Do not operate in the first half hour after the market opens;
Go long if the price breaks above the highest price in the half-hour, go short if the price breaks below the lowest price in the half-hour;
This is a very simple trading system regarding entry, just an example; another model could be:
Do not go long if the price gaps up, do not go short if the price gaps down;
Go short if the price gaps up and breaks yesterday's high, go long if the price gaps down and breaks yesterday's low;
You can enter based on your experience plus other conditions like 3, 4, 5, 6, 7, etc.; enter if conditions are met, do not trade if conditions are not met.
2 Capital Management — How much money to use for opening positions?
Intraday short-term trading also requires capital management, and the management principles cannot be the same for different currency pairs.
Using a uniform opening capital will inevitably result in the profits from one currency pair not being enough to cover the losses from another currency pair.
[Suggestion]: Individual losses should not exceed 2% of total capital.
The reasoning is simple: different entry points will lead to different stop-loss settings, and different instruments also have different volatility.
If you can set a loss within a fixed range, it is different; as long as you maintain the 2:1 principle, meaning that if a trade is worth trying, its profit target should be at least twice that of the stop-loss. This way, even if a trader is correct only once in three trades, they can break even (losing money considering fees).
If you can achieve a 50% accuracy rate, you will make a profit.
If you do this, you will find it difficult to incur long-term losses.
3 Risk Control — What to do if you go against the trend?
Traders who do not understand risk control or do not know how to use stop-loss orders have not even stepped through the door of trading.
Whenever you enter the market, the stop-loss order should be set. If you go against the trend, the stop-loss will take you out, preventing unbearable losses; otherwise, prepare for the day you face a margin call. 4 Exit Mechanism — When to exit?
The profit model of day trading is to achieve cumulative wealth through multiple small profits.
Therefore, since you chose intraday, you must constantly remind yourself not to be greedy; when you make money, you must know when to leave. Profits should be twice the stop-loss, which is a principle for exiting. Additionally, as soon as there is a sign of a trend pause, close the position.
In day trading, one must remember: take profits when there are gains!
04 Preparations After the Market Opens
1 Judging whether today's market is trending or oscillating.
If the price fluctuates between the 30-minute highest and lowest prices on the 3-minute chart, it is considered oscillation, and a breakout may indicate a trend.
2 Judging the Medium-term Trend
If the trend on the 60-minute chart is upward, try to go long; conversely, go short.
Short-term experts do not have to stick to this rule. For inexperienced beginners, the transition between bullish and bearish thinking does not happen quickly, so it is recommended to follow the trend on the 60-minute chart.
3 Find Key Levels
Draw the pressure, support, trend lines, and Fibonacci retracement lines on the chart. Act quickly when the price reaches or breaks these key levels.
Day Trading Profit Techniques
1
It is best to choose only one currency pair for trading.
It is best for traders to operate only one currency pair during a certain period, and they must continuously track the currency pair until it no longer has speculative value.
When trading, at least open 3 different time period windows:
1 Minute Window — This is prepared for grasping entry and exit timing;
3 Minute Window — This is used to monitor the wave situation after entering the market;
30 Minute or 60 Minute Window — Used to monitor changes in intraday trends at any time.
2
Evaluate profits and stop-losses.
When traders ambush the target currency pair, they must quickly assess the potential winning and losing situations both beforehand and during execution through technical analysis.
Only when the probability of winning is greater than 80% and the ratio of stop-loss to profit target is at least 1:2 should capital be allocated.
3
Several key elements to pay attention to when conducting short-term ambushes:
Pay attention to the support, resistance, trend lines, and Fibonacci retracement lines on various time period charts;
Pay attention to the position patterns on the daily chart for comprehensive assessment;
Pay attention to the health and stability of waves on the intraday chart;
Pay attention to the shape of candlestick bodies and changes in volume;
Traders must maintain a cold strategic mindset:
Exit when the stop-loss is hit, leave when the profit target is reached, regardless of whether it goes up or down afterward; prioritize making money. Opportunities will arise anytime, anywhere, so never be greedy.When the market is doubtful, exit decisively, even if it hasn't reached the stop-loss; absolutely do not drag it out.
Opportunities for operations are available every day; if you are stopped out, do not rush to recover immediately.
Once you have stopped out of this trade, it is completed. The next trade is a new one; earn as much as you can without letting previous operations dictate the target for the next operation, or you will lose every time.Only by treating each trade as a new one can you maintain a good mindset for battle.
Above, are the trading methods of the master. However, I do not hope that everyone blindly copies others' methods, as each person's situation is different.
Old Seven hopes everyone can extract beneficial experiences from this and combine them with their own situation, ultimately developing a trading system that belongs to them. Only then can they achieve success in future trades!
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