Why daytrading?

First, let's assume that there is time to do day trading, 1 to 2 hours per trading day at the beginning of the day is all that is needed, perhaps as a minimum. Without that the whole idea is useless.



I was thinking at lunch why I ended up back at the day trading doorstep. I like the minute by minute decisions, figuring out the trades on the fly, the instant results, good or bad, not having to worry about the next day opening taking out a stop order, over night gaps etc...but those aren't the reasons. I had actually tried to stay away from daytrading intentionally and am back almost by accident.



After trying larger time frames and styles of trading I have found that the loss allowance for a trade must be fairly large with respect to my working capital. With day trading I can limit my losses and can even work a bad trade back to breakeven if I am careful and quick...not always though.

Like any of my other trials this still has some testing to go before I can call it successful. I would still like to return to the CTP plan that I set out earlier but I cannot do that until I have more capital to work with.

Worth noting, I have mentioned in the past that price patterns are similar from timeframe to time frame...a one minute chart looks very much like a daily chart if you remove the scales of time and price. Working these one minute charts gives a very quick representation of how the price moves. Support and resistance lines work well, trending patterns, consolidation triangles volume, MACD and almost any other indicator or technique are all useable. The advantage is that doing this in a one minute scale gives me experience doing lot's of trades and making lot's of decisions quickly. One 2 hour session is similar to trading a stock on a daily basis over the course of 4 months...compressed learning curve. I think that this may be a valuable learning tool for those interested in doing any sort of trading if only for that compressed learning.

I may try to get a chart up here tomorrow to show one stock that I faked today and some of the support and resistance lines that were key in making trades and how they can be used to make good entry and exit decisions.

JD.