Hi all, So I'm fairly new to day trading and I only trade cryptos at the moment with a small capital amount of capital ($3K). I've decided to switch to day-trading from swing-trading because to multiple my capital quicker, however, I am finding that I am still holding my trades for days/weeks because the market doesn't move much or it doesn't hit my targets. For example: https://www.tradingview.com/x/YEKuf2rE/ Entry was at the vertical line. Entry was based off the 15 minute timeframe. Target as per the chart with a 1:2 RR. Price didn't hit my target, so I did nothing. Stop Loss as per chart. Eventually price ran back down and hit my stop loss. Total trade was 13 days! I feel stupid even calling this a day trade when it obviously is not. What should I have done? Do I exit the trade when itwas in my favor? Or stick with my targets? Keeping in mind I want to day trade here. Sorry if this is a stupid question, but I would really appreciate some advice Thanks all Daniel
When the market moves in your favor by a certain percentage (or amount in points), move the stop to break-even. You can also put a fast moving average on the chart and exit if the price closes below that moving average, if you are long (and vice versa for short positions). Of course the optimal parameters for these break-even and exit strategies must be dictated by your backtest, you cannot simply initiate a trade, choose some arbitrary risk/reward ratio as a target, put a stop anywhere as long as you can "afford" the loss and call this process a system
Thanks Tradex, what percentage / MA would you'd recommend? And how about when the trade is not moving? When should I exit and allocate my capital elsewhere?
Why do you think day trading have more returns? I trade crypto too and actually swing trading has higher returns. Jesse Livermore became a billionaire not from going in and out of the market daily, he explicitly said it was his sitting that made him money.
My thinking is that I could compound my profits more often with day trading, since my capital is locked up with swing trading. And also with the altcoin market lately, I thought if I can capture 5-10% of a 50% move, that would be more than I make swing trading BTC/ETH since they are often in long periods of consolidation. I'd be keen to hear how you approach it? Why do you say it has higher returns? I'll be the first to admit that I don't exactly know what I'm doing yet and need help
In day trading if you keep going in and out of the market like a blind chicken you will get toast. You will be prone to overtrading which is no.1 reason why most beginners lose money. It is also very time consuming unless you program a bot. Like for e.g, on paper you may say the 5 min chart reaches this buy price and then goes higher and you sell 30 mins later. It seems easy on paper, but in reality the price may have just briefly touch the price for a few seconds and then head up so unless you are monitoring every second, your reaction must be very fast or else you can't even buy at the desired price. You are competing with algos for short term trading style. Also note that day trading can't scale like swing trading and crypto is a thin market unless you are talking about btc or eth. But you should find what suits your trading style. Day trading is more consistent but lesser returns while swing trading is volatile but higher returns imo.
the T-Line Exit sure is easy to put to work. throw an 8-ema on your chart and see how it behaved on five or ten exits, you may like it too. https://elitetrader.com/et/threads/...solid-trading-plan.340340/page-4#post-5031706
@HolyGrailSeeker Thanks, all good points and made we rethink if I even want to day trade. Swing trading is definitely more my style as I prefer not to be stuck to the screen all day, and I tend to be better at seeing the longer term trend, so perhaps I will just stick with that for now. How long would you say your average trade is? And do you just trade the large caps or also lower cap coins? @easymon1 Thanks man, I will give that a watch. I do use fib retrace and extensions a lot, but I somehow find them less reliable on the shorter timeframes, and finding myself stuck waiting in trades that don't hit my target.
I trade mostly lower to mid caps. I can sell on the same day or hold for several days it really depends on what happens. If you feel bored and want to try day trading you can use say $100 from your 3k account to day trade and the rest to swing. Compare and then conclude which is better yourself.