Day Trading Strategies for New/Beginner Traders
– New Divergence Method
– When do I use the Pink line on my Trade Management Chart? When do I leave the stop alone?
o Look for divergence, and then tighten the stop
– What’s the best way to learn these patterns?
– How do you find your Support and Resistance
o The AUTO-Levels indicator plots all of the s/r levels for me automatically
o I also use a swing-high/low indicator to confirm the exact entry location
– Where do you place your stops?
o Are they dynamic?
Scalping = 6-8 tick stop
• Same profit targets and same trade management
Day Traders will use different trade management
• Stops and targets are placed at the next level of support and resistance
– What do these Range Charts = time charts?
o 34-range = 15-minute
o 21-range = 10-13m
o 13-range = 5-10m
o 8-range = 3-5m
o 4-range =1-2m
o My job is easier to learn when ALL the same patterns LOOK the same
o Range charts always use the same # of ticks of range/candlestick
o Each pattern has the EXACT SAME LOOK
Compare that to a tick, minute, volume chart and all the patterns are a little different.
– Why do we use tick charts instead of range charts for your trade management?
o I use tick charts because im more focused on measuring volume with my MACD indicator on my trade management chart.
– Average True Range, how do we use it?
o Used on a time chart (James 2-min Range Template)
o Compare the ATR at specific times of the day and see if its rising or falling
o I don’t pay attention to the reading of the ATR indicator
o All I care about is rising or falling
o Are we above/below the ATR 5mins ago…10 mins ago…1 day ago…
o Simple and streamlined trading method
o Uses 1/1 risk/reward ratio (vital to new trader)
Risk 10 ticks to earn 10 ticks
10 tick stop and 10 tick target
o Easy entries with resting limit orders
o Sale-able to fit any traders needs
1 contract or 100 contracts
No trade management for a beginner, or advanced trade management for experienced traders.
o Use the same high % patterns we use here in the room
– What account size do you need to trade like this?
o I only need 1 contract to start
o $1,000-$2,000usd per contract
o Start on a DEMO and then once you know how to trade we have accounts for you to manage!
o 1 contract = $2k
o 2 contracts = $4k
Tax advantages for different types of traders:
– Stocks, Forex, treated as securities, means your income is 100% short term capital gains
o I earn $100,000 (USA) x 35% = $35,000
– Futures are classified as commodities, hefty tax discounts, 60/40 short-term and long-term capital gains.
o $100,000 (USA)
60,000 (60%) x 15% = long term = 9,000
40,000 (40%) x 35% = short term = 14,000
Total = 23,000
Savings = $12,00/year/100k
23% savings
Corporations and LLCs speak with yout tax person
• LLC is a pass-through corporation
o 1-member LLC’s
o 2-members LLCs
