In this short video I want to give you 3 tips to finding which charts to day trade.
This is a topic that comes up a lot in our day trade rooms. We get this question all the time and it is a daunting task or at least on the surface it seems like it is but there are three simple steps that you can follow that will help you narrow the field and focus in on the best charts to trade.
Before we begin let’s establish some basic objectives:
- Our daily goal should be to quit with a positive result with minimal trading a majority of the time.
- We want to make sure we have a trade plan in mind. For the sake of this video our plan is very simple.
Our Simplified Day Trading Plan
We are going to keep our day trading plan quite simple to avoid the risk of trading paralysis.
- We’re going to start when the US market opens,
- Our trading objective is to hit a target “2”which I’ll show you as we go through these examples or two break even targets.
- We must have a positive result and we’re going to limit our trading to five trades total or we’re going to quit at noon, whichever happens first.
It’s a very simple basic trade plan and I find that if you keep it simple like this you’re going to have more steady success.
What Day Trading Strategy Will We Use?
We can use any strategy we want. For this video, I’m going to focus on a brand new strategy that I’ve been working on.
You can use a strategy you have designed, one you have purchased, or one you pick up from a trading forum. The key is that you have tested your trading strategy before committing any real money to it.
Which Charts Will We Day Trade?
Now that we have our basic framework in place, how do we go about determining the best charts to trade?
I’ve boiled it down to answering yes to three simple questions.
- Are there enough trades in a session?
- Is the trade profile adequate? What I mean by that is are the targets worth it? Is the risk acceptable? Everyone’s different, it depends on your capital. You might love a chart but perhaps you’re just under-capitalized and you can’t afford to trade it.
- Can I quit with a positive result a majority of the time? That is the main goal, right?
If you can answer yes to all three of these questions then you’ve found yourself a chart that’s probably worth trading.
To learn more about the day trading strategy used on these charts, get in touch with us!