The Day Trader's Bible. Or My Secrets of Day Trading In Stocks. By Richard D. Wyckoff. [ Originally Published by Ticker Publishing, ]. Author's preface. This special issue is now available as an electronic, fully viewable *.pdf file Joe Duffy is a former trading contest champion and author of three books and. Enjoy reading the book and let me know if you have any questions. 2 The Simple Strategy is my favorite day trading strategy for the following reasons.
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Having said that, a PDF simply won't go into the level of detail that many books will. The books below offer detailed examples of intraday. Whether a beginner or an experienced trader, the best books can help everyone improve. You can also get books in pdf, as free downloads. Just like ebooks. Day Trading and Swing Trading the Currency - Trading Software A elP catalogue record for this book is available from the British Library. Publisher: Joannn.
A support level is usually the low point in any chart pattern hourly, weekly, or annually , whereas a resis- tance level is the high or the peak point of the pattern. But, before the stock hits the predicted exit price, the stock picking ser- vice starts selling or dumping the shares that they bought BEFORE they recommended it to you. Well, you could buy shares of the SPY stock. I know that there are many websites and late-night infomercials that try to tell you differently. By paying attention to only the close, intraday swings can be ignored.
The driving force is quantity.
You will look to sell as soon as the trade becomes profitable. This is a fast-paced and exciting way to trade, but it can be risky. You need a high trading probability to even out the low risk vs reward ratio. Be on the lookout for volatile instruments, attractive liquidity and be hot on timing. Popular amongst trading strategies for beginners, this strategy revolves around acting on news sources and identifying substantial trending moves with the support of high volume.
You simply hold onto your position until you see signs of reversal and then get out. Alternatively, you can fade the price drop. This way round your price target is as soon as volume starts to diminish.
This strategy is simple and effective if used correctly. Just a few seconds on each trade will make all the difference to your end of day profits.
Although hotly debated and potentially dangerous when used by beginners, reverse trading is used all over the world. This strategy defies basic logic as you aim to trade against the trend. You need to be able to accurately identify possible pullbacks, plus predict their strength. To do this effectively you need in-depth market knowledge and experience.
It is particularly useful in the forex market. A pivot point is defined as a point of rotation. Note that if you calculate a pivot point using price information from a relatively short time frame, accuracy is often reduced. You can then calculate support and resistance levels using the pivot point.
To do that you will need to use the following formulas:. When applied to the FX market, for example, you will find the trading range for the session often takes place between the pivot point and the first support and resistance levels. This is because a high number of traders play this range.
Requirements for which are usually high for day traders. When you trade on margin you are increasingly vulnerable to sharp price movements.
Yes, this means the potential for greater profit, but it also means the possibility of significant losses. Fortunately, you can employ stop-losses. The stop-loss controls your risk for you. In a short position, you can place a stop-loss above a recent high, for long positions you can place it below a recent low. You can also make it dependant on volatility. One popular strategy is to set up two stop-losses. Firstly, you place a physical stop-loss order at a specific price level.
This will be the most capital you can afford to lose. Secondly, you create a mental stop-loss. Place this at the point your entry criteria are breached. Forex strategies are risky by nature as you need to accumulate your profits in a short space of time. The exciting and unpredictable cryptocurrency market offers plenty of opportunities for the switched on day trader.
Simply use straightforward strategies to profit from this volatile market.
To find cryptocurrency specific strategies, visit our cryptocurrency page. Day trading strategies for stocks rely on many of the same principles outlined throughout this page, and you can use many of the strategies outlined above.
The same concept applies when trading forex: And that's why your broker is giving you the quotes for free: Take a look at these forex quotes. All three of the following screenshots were taken on Tuesday, January 1st, , at 3: Easter Time.
The first data source reports it at 1. The second data source shows 1. The third data source reports a high of 1. Do you see the problem? Forex prices are completely subjective. Although the capital requirements for trading the forex markets are al- ready low, "Mini-Forex Trading" has become very popular recently. On this account, you can trade up to 5 mini lots. Instead of trading in , units, you are trading in 10, units. Even with just a small stake involved, you still get to enjoy benefits such as a free trading platform — just like regular forex traders.
A few other benefits include state-of-the art trading software, charts, and resources. In this way, you can build up your confidence in your trading skills while slowly increasing your profits and trading position in the market. You get to manage your money on a small scale before going for the higher stakes in regular forex trading.
You can also develop a sound trading strategy without getting too emo- tionally involved in possible profits or losses. For practice, newbies can start with paper trading; in the real market, they can start small with mini-forex trading. Mini-forex trading requires a smaller amount of capital and less emo- tional investment, and it provides the perfect opportunity for you to slowly build up your skills and confidence as a trader.
In a way, it pre- pares you for the higher stakes of the more advanced world of foreign exchange trading. The typical leverage in the forex market is 1: Recently, forex brokers started offering leverage of 1: This is certainly not a problem in the forex market.
Here are the daily averages of turnover on the forex market over the last 15 years:. You will find decent volatility in the forex market.
Here are the average daily movements for three dif- ferent currency pairs:. The leverage is at least Overall, forex seems to be a good market to trade, but keep in mind that there are some disadvantages, too, as mentioned earlier in this section. Futures trading continues to grow in popularity, and many traders are jumping into this type of investing.
People often think that futures are extremely risky and difficult to trade. Thanks to high leverage, futures trading IS more risky than stock trading. So what are futures? Futures contracts, simply called futures, are ex- change-traded derivatives. Currencies — The currency market is probably the best-known commodity available, dealing in the British Pound, the American Dollar, the European Euro, etc.
Interest Rates — Interest rates are traded in two ways on this market: Energies — A variety of fuel commodities are traded on this mar- ket, including natural gas, heating oil, and crude oil futures. Food Sector — Sugar, coffee, and orange juice are just a few of the regular goods traded in this sector.
Metals — Commodities in this market are fairly well-known, such as copper, gold, and silver. Agricultural — Futures in this market include wheat, corn, cof- fee, and soybeans. Futures are not borrowed like stock, and therefore initiating a short posi- tion is just as common and easy as buying the futures. Trading on commodities began in early 18th century Japan, with the trading of rice and silk, and similarly in Holland, with tulip bulbs.
Trad- ing in the U. All contract trading began with traditional commodities such as grains, meat, and livestock. Exchange trading these days has expanded to include metals, energy, currencies, currency indices, equities, equity indices, government interest rates, and also private interest rates. Contracts on the financial instru- ments were introduced in the s by the Chicago Mercantile Ex- change. These instruments became hugely successful and quickly over- took commodities futures in terms of trading volume and global accessi- bility in the markets.
Each futures contract is characterized by a number of factors, including the nature of the underlying asset, when it must be delivered, the currency of the transaction, and at what date the contract stops trading, as well as the tick size, or minimum legal change in price.
It can be traded electronically five days a week, almost 24 hours a day. The margin amount required to trade is sig- nificantly smaller than a standard contract, and since not all traders have the funds to trade on the regular NASDAQ , this E-mini is the perfect solution.
Light Sweet Crude Oil — Oil futures are one of the most well-known commodities out there. Gold — The gold futures contract is also popular. Since that time, the gold price has gone through regular, dramatic changes, and those changes are usually in the opposite di- rection of the U. The gold futures contract follows the changes in price per ounce of gold, and gold investments are frequently used in hedge funds.
The growing popularity of futures trading stems from the fact that only a relatively small amount of money, known as initial margin, is required to. By definition, these futures margins are a good faith deposit to ensure that the market participants are legitimate. Whenever you open a position by buying or selling futures, you will pay a small initial margin.
The advantage is that the initial margin on a stock future is much less than the cost of buying the actual stock outright. This index could rise from to As of October 12th, , it is trading at around In order to make it affordable for pri- vate traders, the SPY is divided by ten. And how much capital is needed in order to trade one share? So, for dollars, you will be rewarded with a one dollar profit if the whole index moves by 10 points.
And, if you were trading shares of the SPY, then you would make dollars on a move of 10 points. Obviously, the capital needed for shares is much higher than for one share. The capital needed is actu- ally dollars per share times the shares that you would want to trade.
The thing to look at here is your return on investment, which is what most traders use to measure their success. If you make five hundred dollars after investing 78, dollars, the re- turn on that investment would be 0. This is exactly why we have the futures markets. And how much of an investment is required to make dollars off one contract in this move?
So, you can deposit 4, dollars and participate in a point move for a profit of dollars. Instead of 0. Of course, this can be a double-sided sword. You can easily make dollars, but if the trade goes against you, you would lose dollars. As you can see at the bottom of the previous chart, there are small Rs. These Rs indicate expiration dates. A futures contract is only valid for a certain period of time. You might know this concept from options. Op- tions also have an expiration date. After the expiration date, a new futures contract starts trading and the old contract expires.
You might have heard horror stories that if you are holding a position and the futures contract expires, then you will have to take delivery. So, according to these tales, if you are trading the grains — corn, for example — and the contract expires, you will get the corn deliv- ered to your doorstep. Basically, what will happen is this: We should get rid of this position or roll it over. So, you can see that it goes from to and a quarter, and a half, and three quarters, and then up to Very easy.
There are four quarters in one point, so you just have to divide the 50 dollars by four. So, why is that important? Keep in mind that you can also LOSE 50 dollars per point. Now, just think about this for a minute: Well, you could buy shares of the SPY stock. Or you could trade 20 futures contracts in the ES. You can see the difference. There are two types of margins. The initial margin sometimes called the original margin is the sum of money that the customer must deposit.
Initial margin is paid by both buyer and seller. Additionally, the maintenance margin is the minimum amount which an investor must keep on deposit in a margin account at all times for each open contract. Typically, the maintenance margin is smaller than the ini- tial margin. Another important thing to be aware of when dealing with margins is something called a margin call. If the margin drops below the margin maintenance requirement established by the exchange listing the futures, a margin call will be issued to bring the account back up to the required level.
Another difference in trading futures vs. Any day that profits accrue on your open positions, the profits will be added to the balance in your margin account automati- cally, not just when you close the position. When you are buying stocks, all the money that you make or lose will be either added or subtracted to your account only when you close the position.
So, when profits occur on your futures contracts, they will be added to the balance of your margin account, and on any day losses accrue, the losses will be deducted from the balance of your margin account. Keep in mind, if the funds remaining in your margin account dip below the maintenance margin requirement, your broker will require that you deposit additional funds to bring the account back to the level of the re- quired margin.
Again, this is called a margin call. Due to the low margin requirement, futures trading offers everyone an equal opportunity to make a fortune even with a small bank account. It allows traders to build up their accounts. But, as stated before, if you take futures trading lightly, you could also wipe out your trading account in a matter of days.
There are a lot of options! The best approach would probably be to start with the more popular commodities, until you have a better idea of which contracts most fit you and your trading. The more you know about the basics of futures contracts and commodi- ties like this, the better your chances of trading success. In order to trade a futures contract, you need to deposit an initial investment into your futures trading account. Each contract requires an initial mar- gin.
Here are some examples for the most popular contracts as of January Again, the liquidity depends on the futures contract you are trading. Here are some numbers:. As you can see, the liquidity varies, and therefore you MUST check the volume of the futures market you are plan- ning to trade. You will find decent volatility in the futures markets.
Like in the forex markets, the high leverage will allow you to make decent profits, even if the markets move just a few points. Here are some average daily moves:. The leverage is at least 1: Futures markets are regulated and the spread is typically 1 tick mini- mum movement of the contract.
Make sure to check the volume and liquidity of the market you want to trade, since there are huge differences between the markets. Stock options trading is quite similar to futures trading — they both in- volve the process of buying stocks at a pre-determined price and then selling them when the price rises above its original amount. When you buy an option you have the right — but not the obligation — to buy call or sell put a specific underlying asset at a prearranged price on or before a given date.
The reverse of this is a put right to sell option on an underlying asset. You might feel that the market is overheated at the present time, and you want to buy a put right to sell option. This will give the individual who bought the put option the right to sell that option at an agreed upon price strike price on or before a specific date expiration date.
Options are one of the oldest trading vehicles which man has ever used. Around B. When the harvest did in fact prove to be a great one, Thales was able to rent the presses out at a significant profit.
The leverage depends on the option you choose. Options are typically not very liquid. Even if you trade options on the Dow 30 stocks, you will notice that only a few thousand options are traded per day. The reason for the low volume is the broad choice of options: Fortunately, option prices are NOT subject to market manipula- tion since the value of an option is not determined by supply and demand, but by a mathematical formula created by Black and Scholes.
The liquid- ity is very low compared to the other markets, and the volatility is scary. Stock options are a fantastic instrument to trade when traded on daily or weekly charts. Day trading stock options is extremely risky and difficult, and not for the novice trader. Spend four more hours learning about the market you choose. Surf the Internet and read articles. Try to find out as much as you can about your preferred market without being overloaded with information.
Selecting a Timeframe. Popular intraday timeframes are minute, minute, minute, minute, 5-minute, 3-minute, and 1-minute. When you select a smaller timeframe less than 60 minutes , usually your average profit per trade is relatively low. On the other hand, you get more trading opportunities.
Smaller timeframes mean smaller profits, but usually smaller risk, too. You might think that you see an emerging trend just to realize that it was only a short manipulated move and that the trend is over as soon as you enter the market. Therefore I recommend using minute charts. When developing a trading strategy, you should always experiment with different timeframes. Selecting a Trading Approach. A fter selecting a market, you need to decide which trading ap- proach you would like to use.
A good deal of reliance is placed on annual and quarterly earn- ings reports, the economic, political and competitive environ- ment facing the company, as well as any current news items or rumors relating to the company's operations. In other words, fundamental analysis is the study of basic, underlying factors that affect the supply and demand of the contracts which are be-. In addition to this company-specific data, you need to take the overall economic environment into consideration and start looking at various macroeconomic indicators, such as economic growth rates, inter- est rates, inflation rates, and unemployment rates.
As an example, interest rate hikes are seldom good news for stock mar- kets. This is due to the fact that many investors will withdraw money from a country's stock market when there is a hike of interest rates, causing the country's currency to weaken.
Knowing which effect prevails can be tricky. When the Fed announced an interest rate cut in December of , the Dow Jones Index dropped points.
Fundamental analysis is not easy. Big trading companies like Goldman Sachs are employing analysts with Ph. Therefore technical analysis involves the study of a stock's trad- ing patterns through the use of charts, trendlines, support and resistance levels, and many other mathematical analysis tools, in order to predict future movements in a stock's price, and to help identify trading opportunities.
Market action discounts everything. Regardless of what the fundamentals are saying, the price you see is the price you get. All three of the points above are important, but the first is the most criti- cal. The markets are driven by greed and fear, and not by supply and demand.
An economic report itself is meaningless: IBM announces that it will meet the projected sales targets, and the shares drop like a rock, because traders hoped that IBM would exceed its goals. You can learn the basics by reading a couple of books, whereas you need to study micro- and macro-economics to master funda- mental analysis. And even then, you might be fooled by the mar- ket. On Friday, April 7th, , the unemployment rate for March was pub- lished.
The market expected an unemployment rate of 4. For Treasury traders, the in-line data essentially provided no evidence that the Fed will be inclined to soon end its monetary tightening cycle. So the stock traders thought there was good news and the market was moving up, but the treasury trader in the other room thought the un- employment data was bad news.
So treasury instruments were rallying, causing the stock market to drop like a rock. But don't stocks lead the treasuries? Or do treasuries lead stocks? And more important: Will they cease increasing interest rates or even lower the rates again? This would provide a boost for the stock market.
Or will traders fear that there's an economic slowdown which might re- sult in lower company earnings? This would move the market down. As you can see, it's not the news that moves the market — it's the reaction of the traders to the news that makes the prices jump up and down. You sim- ply believe that the factors which affect price — including fundamental, political, and psychological factors — have all been built into the price you see.
This means that anything which can affect the price of a financial in- strument has already been factored into the current price by the market participants. Technical analysts look at charts the same way a doctor would look at x-rays: The most basic charts are bar and line charts. These charts are simply indispensable. Any market has four different trading points throughout one day. They are: All of these points appear on the charts. The opening price O is the first trade of the day. The closing price C is the last trade of the day.
Unlike the opening price, the closing price will normally be representative of deci- sions made by reason and research — not gut feel.
The difference between the high and low on the charts is referred to as the Range. The fifth variable displayed on a chart is typically the volume V , speci- fying the number of shares, lots, or contracts traded during the time pe- riod between the open of the market and the close.
Purely looking at these five points on the charts will not be enough to plan future trades. You need to look at them over a series of time in order to evaluate trends in the market. Day traders use trading charts to watch the markets that they trade, and decide when to make their trades. There are several different types of trading charts, but they all show essentially the same trading information, such as the past and current prices. A bar chart, also known as a bar graph, is a chart with rectangular bars whose lengths are proportional to the value they represent.
Bar charts are used for comparing two or more values. The bar chart is one of the most common charting methods. A bar chart indicates a single bar that extends from the high to the low of the trading period it is meant to depict.
In addition, the opening and closing price levels could be displayed as small branches coming away from the main bar at the appropriate level. Closing prices are put on the right side of the bar. Opening prices are put on the left side. Bar charts consist of an opening foot, a vertical line, and a closing foot.
Each bar includes the open, high, low, and close of the timeframe, and also shows the direction upward or downward , and the range of the timeframe. Open — The open is the first price traded during the bar, and is indicated by the horizontal foot on the left side of the bar. High — The high is the highest price traded during the bar, and is indicated by the top of the vertical bar.
Low — The low is the lowest price traded during the bar, and is indicated by the bottom of the vertical bar. Close — The close is the last price traded during the bar, and is indicated by the horizontal foot on the right side of the bar.
Direction — The direction of the bar is indicated by the locations of the opening and closing feet. If the closing foot is above the opening foot, the bar is an upward bar, and if the closing foot is below the opening foot, the bar is a downward bar. Sometimes a charting software allows you to color these bars, in which case the upward bars are typically colored green, and the downward bars are colored red.
Range — The range of the bar is indicated by the locations of the top and bottom of the bar. In the s, Homma, a Japanese trader in rice, noticed how the price of rice was influenced by human psychology as much as by the supply and demand situation. Homma used candlestick charts to trade rice and amassed a huge fortune in the markets.
In fact, it was rumored that he never had a single losing trade! Human psychology has never changed; it has remained constant over time — candlestick charting is just as useful today as it was hundreds of years ago. Even though they may look a little complicated, there are some great rea- sons to use candlestick charts.
You can use candlestick charts as you would use the common bar chart, and you can combine them with traditional market in- dicators. Candlestick charts are a great way to spot opportunities, filter, and time trades with other indicators.
Because of the way candlestick charts are viewed, they can give you visual warnings of market reversals much more clearly than traditional bar charts. If you look at candlestick charting, the human psychology of the move literally jumps out of the page at you. The different candle names are also easy to remember. The way the candlestick chart is drawn not only gives the direc- tion of price, but also the momentum behind the move.
Candlestick charts consist of a wide vertical line, and a narrow vertical line. Each candlestick includes the open, high, low, and close of the time- frame, the direction upward or downward of the timeframe, and the range of the timeframe. Open — The open is the first price traded during the candlestick, and is indicated by either the top or bottom of the wide vertical line the bottom for an upward candlestick, and the top for a downward candlestick. High — The high is the highest price traded during the candle- stick, and is indicated by the top of the thin vertical bar the wick of the candlestick.
Low — The low is the lowest price traded during the candlestick, and is indicated by the bottom of the thin vertical bar the upside down wick of the candlestick.
Close — The close is the last price traded during the candlestick, and is indicated by either the top or bottom of the wide vertical line the top for an upward candlestick, and the bottom for a downward candlestick. Direction — The direction of the candlestick is indicated by the color of the candlestick specifically the wide vertical line.
Usu- ally, if the candlestick is green, the candlestick is an upward. In the following chart, the upward candlesticks are colored black, and the downward candlesticks are colored white. Range — The range of the candlestick is indicated by the loca- tions of the top and bottom of the thin vertical lines the wicks.
The candlestick has a wide part, called the "real body. If the real body is filled with red, it means the close was lower than the open. If the real body is green, it means the opposite — the close was higher than the open.
Above and below the real body we see the "shadows. The shadows actu- ally show the high and the low of the day's trading. If the upper shadow on the green filled-in body is short, it indicates that the open that day was closer to the high of the day. On the other hand, a short upper shadow on a red or unfilled body shows the close was near the high. Plus, they provide greater insight into market moves, along with the versatility to be used in any type of trading.
A simple line chart draws a line from one closing price to the next clos- ing price. Line charts show the general price movement over a period of time. Some investors and traders consider the closing level to be more important than the open, high, or low. By paying attention to only the close, intraday swings can be ignored. Line charts are also used when open, high, and low data points are not available. Sometimes only the closing data is available for certain indi- ces, thinly traded stocks, and intraday prices.
Line charts consist of individual points that are connected with straight lines. Usually, each point shows the close of the timeframe, but this can be modified to show any info — open, high, or low. Line charts also show the direction upward or downward of the timeframe. Most charting software supports bar, candlestick, and line charts.
Nor- mally, you can customize the display and colors according to your wish.
You can use any reliable online charting service you want. Just make sure they provide the basic analytical tools e. There are so many charting services out there that it would be hard to mention any one in particular. Charts do not foretell future market behaviors or predict market prices.
They offer you a concise and accurate history of the price movements of a particular market. In that history lays a trend, and it is from this trend that you can extrapolate data on which to base your future projections of probable market behaviors and price changes. Finding the prevailing trend will help you become aware of the overall market direction and offer you better visibility — especially when short- term movements tend to clutter the picture.
The rest of the time, prices will trade more or less in a sideways range. Our job is to recognize trends early, as they emerge from non-trends, or as reversals of prior trends.
Our goal is to buy or sell our security early in these new trends, exiting the trade profitably when the trend ends. This identification of trend, both its beginning and end, is the most important task we have as traders. A simple definition of trend is basically the general direction of price movements. An uptrend is present when prices make a series of higher highs and higher lows.
A downtrend is present when prices make a series of lower highs and lower lows. When prices move without such a discernible series, prices are said to be trading sideways in a range, or trading trend-less. Once a trend is dis- cernible, then trendlines can be drawn to define the lower limits of an uptrend or the upper limits of a downtrend.
It is essential that trendlines be drawn correctly. It is the recognition of the trendline and the violation of this trendline that is your key to suc- cessful trading and fortune building. I know that these simple definitions sound mundane, and that many trad- ers would like to jump right into complicated indicators and complex trading strategies.
Trading can be simple: So you MUST find an easy way to identify the direction of the market. The trading day is December 20th, As you can see, prices have been moving down all morning, and then they started moving sideways during the lunch break. Prices have found resistance at In an uptrend, trendlines are drawn below the prices, while in a downtrend, trendlines are drawn above the prices. In order to draw a line, we need two points.
The first point is the low of the day and the second point is the first retracement, when prices are no longer making higher lows. The first time prices are not making a higher low occurs at the The dark part of the line is the confirmed trend and the light part of the line is the projected trend. As a rule, trendlines can only become flatter, not steeper.
Adjusting the trendline to the second lower low would make a steeper trendline; therefore, no change is made. All previous prices are above the trendline, so the trend is still intact.
The next lower low occurs at 1: Ten minutes later, we get the next lower low, and we adjust the trendline accordingly. See how beautifully the previous lower lows are almost touching the trendline? A perfect trend.
Remember the rule: In this next chart, we see a series of lower lows, but only the lower low at 2: The series of lower lows indi- cates that the trend is coming to an end. Fifteen minutes later, we have another lower low, but at the same time, we are experiencing a higher high after a series of lower highs. It seems that our uptrend has come to an end.
The uptrend line is broken, and we have another higher high that confirms our downtrend line. The uptrend was in place from During this time, prices moved from The uptrend was broken at An uptrend line is always below the price bars. A downtrend line is constructed in a similar way to that of the uptrend line. The opening price is also the highest price, and 15 minutes after the opening, at 8: So we can draw our downtrend line.
The market keeps falling, and at 9: We see another higher high at 9: The 9: Ten minutes and two bars later, we have another higher high, and we can adjust our line. See how beautifully our trendline captures this downtrend?
The trend continues, and at The trendline is still very close to the previous higher highs. Fifteen minutes later, we get the next higher high, but if we adjust the trendline, it will move it too far away from the previous higher highs; the downtrend is broken.
Adjusting the trendline would move it too far away from previous higher highs, and we risk missing a change in the trend. The longer the trendline has been in effect and the more times it has been successfully tested, the more important the trendline becomes. Conse- quently, when a trendline of long duration — which has been successfully tested many times — is violated, then an important reversal of trend is likely to have occurred.
This is a trading pattern that occurs in between an uptrend and a down- trend. It points to equilibrium in supply and demand. Sideways trends follow a horizontal direction, where the price stays relatively constant. Trading patterns are also used in order to set support and resistance lev- els, which are very useful for the technical analysis of charts. Support and resistance levels are points where a chart experiences recur- ring upward or downward pressure.
A support level is usually the low point in any chart pattern hourly, weekly, or annually , whereas a resis- tance level is the high or the peak point of the pattern. These points are identified as support and resistance when they show a tendency to reappear.
Once these levels are broken, they invariably reverse their roles. Previous support becomes resistance and previous resistance becomes support.
In uptrends, every time the price drops to the uptrend line and then re- sumes its advance, the trendline has acted as support to the price uptrend. Support can also be found at prices of previous support or resistance. In downtrends, every time the price rises to the downtrend line and then resumes its decline, the downtrend line has acted as resistance to the up- ward move of market prices. Consider the following: Similar to support, a resistance level is the point at which bears the sell- ers take control of prices and prevent them from rising higher.
The price at which a trade takes place is the price at which a bull and bear agree to do business. One of the best selling day trading books, you get to benefit from the experience of one of the most highly regarded analysts in the forex world.
A lot of good books focus on technical analysis, strategy and risk management, but not so many focus on the complexities of trading psychology. The book details why not yielding to your emotions is harder than it sounds and offers you a multitude of tips for keeping calm and getting in the right headspace.
The author focuses on market philosophy and delves into his own trading psychology. The only thing to point out is that this book was written during the highly volatile period of the dotcom boom, so some information may be outdated.
If you want strategies you can take from the book and apply with ease then this is a good choice. You get a number of detailed strategies that cover entry and exit points, charts to use, patterns to identify, plus a number of other telling indicators. This book gets glowing reviews and is written in an engaging way, giving it appeal to a wide audience. The book explains why most strategies such as scalping struggle to overcome high intraday costs and fees. This is a self-proclaimed step by step guide, taking a complex system and making it easy to follow.
The success of this book comes from the clear instructions you get around entry and exit rules, how to capitalise on small intraday trends, plus advice on the software you do and do not need. The author also keeps it light-hearted and engaging throughout, making it one of the must read trading books. There are no mincing words, it offers you practical advice from page one on how to trade futures effectively.
You can also apply the philosophies and strategies found here to any number of intraday markets. ETX Capital are currently offering a range of educational tools to traders. They are free to enrol for any traders who have made a deposit of any size.
More details can be found here. Courses are delivered by in-house experts at ETX, and an independent trading company. This ensures a rounded service for those who have enrolled. Most courses and webinars are delivered online.
Thanks to the wonders of technology you can now get day trading audiobooks and ebooks.