The reason why , and how to day trade stocks, is discussed below. Before you start planning your retirement, look at a bunch of different price charts. Before you start day trading stocks, have a trading plan. It includes your strategies, when you will trade, what you will trade, how much you can risk per trade, and any personal guidelines you may wish to impose on yourself such as maximum daily losses or loss from top limits.

Consistently profitable day trading is not a destination. Let your mind lapse and discipline wane, and the market will give you a reality check. It gives insight into how the markets are shaping up for the open, major biases in the trend, and which stocks are moving if you opt to trade big movers—finding stocks is discussed next. At the open be ready to go. Trades can happen in a split second and you need to be on your game, not just logging in.

For many the window is even smaller: More is not necessarily better. The last hour, 3 PM to 4 PM EST is also a popular time for day traders. Through tracking my hourly stats for years, the open and close give you biggest bang for your buck. Trade the same stock s all the time. Have one, two, or possibly three stocks you become an expert in. If the stock is volatile one day, take smaller position sizes and trade with slightly larger stop losses and targets if required.

That way, you make a decent income regardless of volatility on a particular day. An example of a stock screen is looking for high volatility stocks with moderate to high volume, as discussed in How to Find Volatile Stocks for Day Trading in 20 Minutes or Less. Alter that stock screen to find stocks that suit your methodology.

Look for stocks to trade each day. This approach involves the most research. Each morning, and throughout the day, look for stocks that are moving big or moving well. This may include doing some homework the night before on stocks that may breakout the next day, or have earnings or news scheduled. It may also involve watching for stocks that are moving big in the pre-market. Whether your day trading involves homework and research depends on which stock picking method you choose see above.

Follow your strategy—or one of the strategies discussed below—and that is it. That strategy gives you a profitable edge, not watching news. Check your economic calendar and earnings calendar each morning.

Instead, stick to high-quality trade setups and take the easy money. Stay focused, watching for opportunities. To get into a lucrative trade quickly after the stock market open we need a method that will get us into a big move whether a trend develops or not. I use examples from volatile stocks, yet the same methods can be adapted to less volatile stocks; the concepts are the same. This is not a rule though, just a guideline. The alternative non-target method requires more practice.

It also depends on how much the stock is moving overall. You need to set your own threshold for when you consider the price moving against you, based on current market conditions. Trading during these time periods is more challenging. Use the same method discussed above to trade trends and reversal, but your reference points are no longer as clear.

And there will likely be another one or two trades in each stock between 3: By about 10 AM trends may start to develop this is often a reversal time: A downtrend is when the price makes consecutive lower swing highs and lower swing lows. An uptrend is when the price makes consecutive higher swing highs and higher swing lows.

Not every signal you get is a trade worth taking. What I like about my method above is that you have time to watch price waves unfold before acting. Say the price shoots higher after the open.

The pullback that follows drops a bit lower than the prior pullback but again, not far enough to signal a trade and rallies again. If the price pulls back into our trade area and consolidates, do you take the trade?

So if you take a long, you need to be aware of that. If the price action is showing buyers are getting weak, you may opt to avoid the trade, or you may still take the long trade, but at absolutely any sign of trouble you get out.

New price action is constantly revealed. Results will vary from trader to trader based on which trades they opt to take, and which ones they opt to avoid. Read Analyzing Price Action: Velocity and Magnitude so help determine which trades to take. Favor trades with sharp and big movements in the trending direction, and where the pullbacks are slow and choppy.

This shows that movement against the trend is hesitant, and the trend is more likely to continue. Waiting for a three-minute consolidation to form is recommended when you are starting out. It will keep you from getting into a lot of bad trades.

In fast-moving market conditions the price may not stay in one place for three minutes; it might only stay there for two.

Intraday Trading: The Basics of Intraday Trading - Angel Broking

Waiting for three minutes though, in most cases, works well. A lot can happen inside one minute. No longer is a pause of three bars relevant. This was a very high volume day though. Below is a 1-minute chart of the same day. Notice how the 1-minute shows less information.

The tick chart allows you to prepare for trades a bit more, as you can see them setting up before you can on the 1-minute. This leads to another weird thing you may notice. When there is very little volume in the pre-market, the 1-minute chart appears to show more data. It shows some see-saws back and forth before the big move higher. The tick chart just shows the big move higher. I actually like that. A target is a live order where your shares are visible to the market.

If you have to manually exit a winning or losing trade, before it reaches your target or stop loss, it becomes more complicated. If things look like they could turn ugly, get out…NOW, taking whatever liquidity you can get. If the price is slowly moving against you, you can likely get out on a minor fluctuation in your favor or at the bid or offer.

Subtle changes in how you act under these circumstances make a difference in your daily, weekly and monthly returns. The entry also requires a bit of finesse. Typically this will be a one or two cents outside the consolidation. It may also mean taking shares three or four cents outside the consolidation, but only if the potential reward justifies the slightly worse price. You need to be on your toes, and paying attention to what is happening in the stock.

This method also requires practice; a lot of it. Moves happen so fast that you need to be planning your trades before they even occur. That is how to day trade the stock market in two hours or less. Practice in a demo account until profitable. By Cory Mitchell, CMT. Thank you for the post Cory! Your article was very informative and I am looking forward to trying day trading.

Out of curiosity, what app are you using to create your charts and get real time stock info? Once you have an account the broker will provide real-time charts. In the meantime, here is an article that provides information on getting free real-time charts: Just wanna know which stock broker do you use? I found there are a lot of choices and each of them offer their own platform. Depends on where you live and capital available as brokers may offer different rates for various amounts of capital.

Also depends on whether you will be an active day trader, or just making a few trades every now again. Interactive Brokers is popular Speedtrader is solid SureTrader has become quite popular for day traders looking to get started with small amounts of capital….

LightSpeed trading is another option. Entering positions based solely on there set-up may work in this environment with tighter stops. Since I only make money off of the stock I am trading, the price action of that stock is really the only input into my trading decisions. Keeps it simple that way. If you try to incorporate the index then you have to analyze two things simultaneously.

It is more work, and unnecessary…in my opinion and experience and based on watching others who DO use the indexes a guide. Your opinion on good brokers for Canadians. I have heard of them, but have no experience with them. That said, if they are structured as a trading firm, and you are basically just trading under their name by putting down what amounts to a deposit, then it may be legal.

For markets with lower capital requirements, check out forex or futures…see: Thank you for this post. How do you do the trading? In other words do you use a margin account or cash account? I didnt find anything explaining the brokerage account setup in this article. Could you please direct me in the right direction? How is it that people day trade buy and sell the same stock frequently in the same day.

I prefer a margin account, as you need one to be able to short sell…which you should be comfortable doing as a day trader. I would contact them about the reason they are giving you, but the result is likely to be same the reason may change, but they will still prevent you from day trading regularly. Also, brokers are free to have more stringent requirements on day traders. Can I apply Truncated Price Swing Strategy to stocks which have gap up and down after the ring?

If so, should directional bias be short for gap down and long for gap up respectively? Any time you have a very strong movement lower you can use the truncated price swing strategy to look for shorts.

If there is a very strong move up, then you can look for truncated price swings to go long. Basically, you are just waiting for a pullback moving against the strong move.

As for gaps, yes you can use the strategy. I wrote about this particular situation here: In your opinion, if someone like me were to trade only SPY based on your technique every day, is it possible to become profitable?

I have heard that the VXX is inverse to the SPY but offers more volatility and possible higher profits and risk. I would much rather focus on these to become a better trader. I am too fearful of individual stocks at my beginning stage.

Hi Shaun, VXX is a measure of volatility. So when SPY is dropping VXX tends increase and be very active lots of volume and movement. But when SPY is rising for long periods of time VXX tends to sit at low levels and not have a lot of volume. It is worthwhile trading it sometimes, but not all the time. If you are going to pick one, trade SPY.

It is really all you need. Loads of volume, so you can start trading with shares, and as you get more consistent you can slowly increase your position size. In SPY you never need to change anything about your strategy or take more trades to make more money…. SPY offers enough trades and potential each day. So when starting out, trade something with some volatility and lots of volume…SPY offers that, as do some other major ETFs.

Yeah, pick one and trade it. Thanks for this post Cory. I have been practicing this strategy for a month now and showing a small profit. Since we are trading consolidation breaks, what kind of orders do you suggest for entering a trade? I plan to trade your Tuesday picks which seem rather liquid. Do you think a buy-stop market order would suffice since the spreads are small.

Would appreciate your expert opinion in this area. Looking forward to trading live. The most common order for this strategy would be a sell stop if going short placed just below consolidation , or a buy stop if going long just above consolidation.

If you are trading the higher volume stocks on the list then a market order should be fine…. That is pretty much all I use in the stock with lots of liquidity.

Intraday trading - your questions answered | A Beginner's guide to Stock Market and Personal Finance

As mentioned in the article I may cause the breakout myself or enter inside the consolidation if things are really moving prior to the consolidation and there is a good chance that there may be slippage on the entry once it breaks out.

So be adaptive to the market conditions, plan ahead, but the above order types should be fine in most cases. Thanks for the info Cory. I appreciate all your hard work, discipline, and dedication to trading. Trading has been such a captivating pursuit, I hope one day to be trading for a living. For now, trying to stay humble and continue to learn.

Learning How To Day Trade : The Day Trading Academy

A real food for thought there… I think it boils down to personality. Altucher may be a mad genius hedge fund manager, writer, computer programmer, business developer, chess enthusiast, media personality, etc.

That lends to making extreme, dangerous choices in trading. I agree with him that there are so many unknown, invisible forces in the trading world, some of which are beyond our control and totally manipulated by the powers that be. Like that time one of my trades was halted by the stock exchange because the stock was too volatile.

I lost a big chunk there. One moment of misjudgement can wipe out many moments of effort. I still think day trading casually is a good way to make money only if greed and emotion are checked.

That there are unknowns is absolutely true. Ironically keeping risk and losses small is the fastest way to a grow an account. It hurts, but it still leaves trading capital to work with. And those were pretty extreme moves.

Of course worse could happen, and I know that. Or spending years in an investment with having extracted nothing. But since I withdraw my profits every month, even if I did lose it all, I have already made way more than I could lose.

If I every did lose my account, maybe I would take a bit of time off, but I would do it again. I guess one difference between some traders and myself is that I never did it to get rich. I do it because I like it. There is no lure to growing my account as big I can, or gambling.

I simply enjoy trading and try to find good ways to do it. As you said, it does come down to personality, at least partially. I am in a good spot though. I glanced through the article and even somewhat agree with most of it. I am very open about the success rate in day trading being very low posted right near the top of this article. And yes, it is a zero sum game, so if I am making money someone else is losing. Once I was introduced to trading, there was no other option.

It had to be done. My mission was to trade, and 11 years later I have zero regrets. We need both voices so people can hear both sides and come to their own conclusion. All I can do is share what I have learnt and hopefully help a few people along the way…who also loving trading, and who are going to do it no matter what anyone says.

Personally, I think it comes down to personality — he is somewhat manic if you read his books. The man does not moderate. But he makes excellent points and tells the truth also. How to Day Trade Stocks In Two Hours or Less Extensive Guide Posted on August 26, by Cory Mitchell, CMT. Find stocks to day trade in one of three ways: Day Trading Stocks Between 9: First, the price must shoot either up or down, showing a clear bias in direction.

If the price seesaws back and forth, move on to another stock on your list. We want a sharp price move at or just after the open sometimes it may take a few minutes.

How to start doing intraday trading for beginners and new comers

If the stock went down initially from the open, we only consider a short sell if the pullback that follows consolidates below the open price, then breaks that consolidation to the downside. The chart below is more of an advanced example. You have to look at the overall price action to see that the direction bias is still down even though the price bounced above the prior short-term swing high on the second trade.

Sometimes it will drop below the open. In this case, we now view the direction bias as down, and we wait for a pullback higher to consolidate below the high of the initial wave.

We go short if the price breaks to the downside of that consolidation. If going long you may but not required place a target at or slightly above the highest price seen after the open. If going short you may but not required place a target at or slightly below the lowest price seen after the open. For other ideas on where to place a target, see Daily Range Day Trading Strategy.

Based on the entry, stop loss and target price, your potential reward should always be at least 1. If the reward is less than 1. Since these volatile stocks move so quickly, and change direction in a split second, you want to be in these stocks only for the good time, not a long time. So what is a signal to get out?

Just get out as soon as the price stops moving or the price moves against you. If the trend is down, only consider a short trade if the price made a lower swing low, pulls back, and consolidates below the prior swing high. Instead, we get a little pullback, then a bounce, then another pullback and consolidation our trade. For shorts it goes two cents above the consolidation high.

This ratio should be at least 1. The price would have to move beyond the prior low to fill the target, and I prefer not just assuming that will happen. November 15, at Cory Mitchell, CMT says: November 16, at October 31, at Hi Cory, Just wanna know which stock broker do you use?

September 14, at June 30, at June 8, at Cory, Thank you for this post. Thanks for your help.

June 9, at Cory, Thank you for your prompt response. Cory, Thank you again for your prompt response. Your feedback really helps.

March 9, at Thank you for your great information. November 17, at October 20, at Hi Adam, Good job. August 27, at August 26, at A few of my thoughts on that. A very informative post as always! Leave a Reply Cancel reply document. Sign Up for Our Free Trading Newsletter.

How to Day Trade Stocks In Two Hours or Less Extensive Guide How Much Money Do I Need to Trade Forex? Why Most Traders Lose Money and Why the Market Requires It Day Trading Stock Picks for Week of June Trading Courses Trading Tutorials Free Trading eBooks Canadian Investor Forex Stats About Us.