Day trading is buying and selling shares within a single day, sometimes referred to as intraday trading. In this article, we will consider how you can trade intraday and catch positive returns trading both stocks and crypto.
Useful tools for day trading or How To Day Trade For a Living
Traders interested in making intraday trades may use Japanese candlesticks and learn to read candlestick patterns for forecasting possible trend changes and stock price movements. Try to memorize different patterns and open/close positions based on signals that patterns give you. But not only that; also use other great tools such as the VWAP indicator that can help you forecast the strength of the trend. You increase the accuracy of your analysis if you use VWAP, candlestick patterns, and volumes, together with support and resistance levels.
Another important tool that can help you find stocks to buy right now is an iOS app called Stocks 2 Buy. This app has the Candle Analyst screen. Go there, input the stock ticker, and hit the refresh button. The app spots useful and very important Japanese candlestick patterns and provides a forecast on where the stock trend may go intraday. This function is a great feature for intraday traders, and prices update every 5 minutes. So traders can spot useful trend changes and patterns every 5 minutes. Let's see in more detail how this app works.
CROX - Is it a good stock to buy right now? Intraday share analysis.
The first stock we will consider is CROX share. Open the Candle Analyst screen, input the stock ticker, and see useful patterns. Please note that patterns and prices update every 5 minutes, so it is useful to regularly update your results by hitting the Refresh button. By the time of my analysis, this is what the app shows me (the picture below).
The Stocks 2 Buy app sees two important candlestick patterns on the short-term chart interval. Each candle on the graph represents a 5-minute time frame. The first pattern is Bearish Engulfing spotted at 14:40. It shows a possible trend change (falling stock), and indeed, the next 4 candles show trend decline, meaning that the stock started falling for 20 minutes after Bearish Engulfing patterns. This was a good opportunity to open a short position or sell your shares. Then the stock starts rising, but the Stocks 2 Buy app is not showing a trend change, meaning that the possible downside probability is still high. It's a good choice to wait a bit and not open any long positions (not buy shares) on the short-term time frame. Then the app spotted another pattern at 15:45, the Shooting Star, meaning that the stock may fall further, and indeed, it started falling after this pattern. Also, a good time for selling shares or waiting until the app spots a good time to buy shares. It is also recommended to double-check with indicators such as VWAP or seeing volumes for more accurate signals. Now let's consider another share.
GOOGL - Is it a good stock to buy right now? Intraday share analysis.
Now let's consider GOOGL shares and see if it was a good buying opportunity on the shorter term (intraday). Input the stock ticker in the Candle Analyst screen and hit the Refresh button. Prices update every 5 minutes, so you should hit this button every 5 minutes to get fresh live prices and spot shorter-term trend changes. After hitting the refresh button, this is what the app shows us.
The app spotted two valuable patterns on the 5-minute intervals (each candle represents a 5-minute trading range). The app shows the Hammer pattern at 15:00, meaning that the trend can turn upside trajectory, and indeed, it started going upwards. Then, in 30 minutes, it spotted another pattern at 15:30, the Bullish Engulfing, meaning that the stock should keep going upwards. And indeed, we see stock upside movement. Then the stock started falling a bit, but we see no patterns, meaning that it's a good idea to keep holding the stock on the shorter term, without selling it.
This is how you can day trade for a living. Regularly update the screen and spot possible trend changes, and open/close positions accordingly, also use other indications to increase your forecasting accuracy. I hope my guide was useful. Please keep in mind that you should have your own custom reasons for buying/selling shares. I always tell my students, have 5 reasons to buy a share and 5 reasons to sell a share. For example, I like companies' future FCF projections and believe it can result in increased stock target price; I like stocks' high volatility that can allow me to catch quick profits while trading intraday and so forth. Another thing I always recommend to my students is to know exactly what you should be doing with a stock before you even bought it. Have a detailed strategy. This will help you be prepared for unexpected price movements. And use the Stocks 2 Buy app that will become your valuable helper in finding the best time to trade your chosen stock on intraday.
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