The Complete Guide to Day Trading

Table of Contents
PREFACE………………………………………………………………………………………….. IX
INTRODUCTION:WHY DAY TRADING? ………………………………………………. XIII
HOW TO GET THE MOST OUT OF THIS BOOK………………………………………. XIX
PART 1: DAY TRADING BASICS – WHAT YOU SHOULD KNOW…….1
WHAT IS DAY TRADING?……………………………………………………………………… 3
WHO SHOULD BE DAY TRADING? …………………………………………………………. 5
IS IT REALLY POSSIBLE TO MAKE A LIVING AS A DAY TRADER?……………….. 9
HOW TO GET STARTED – DEFINE YOUR GOALS AND MAKE A PLAN………….. 17
1.) Define Your SMART Goal………………………………………………………… 18
2.) Make a Plan…………………………………………………………………………… 19
3.) Execute the Plan …………………………………………………………………….. 20
HOW MUCH MONEY DO YOU NEED TO GET STARTED? ………………………….. 23
DETERMINING YOUR RISK TOLERANCE………………………………………………… 27
WHAT YOU NEED TO BEGIN TRADING …………………………………………………. 29
A Computer …………………………………………………………………………………. 29
An Internet Connection …………………………………………………………………. 30
A Charting Software……………………………………………………………………… 30
A Broker ……………………………………………………………………………………… 39
A Properly Funded Trading Account ………………………………………………. 42
A Trading Strategy ……………………………………………………………………….. 43
PART 2: YOUR TRADING STRATEGY –
THE CORNERSTONE TO YOUR TRADING SUCCESS ……………………..47
HOW TO DEVELOP YOUR OWN PROFITABLE DAY TRADING STRATEGY…….. 49
STEP 1: SELECTING A MARKET ……………………………………………………………. 51
Trading Stocks……………………………………………………………………………… 52
Trading Forex ……………………………………………………………………………… 57
Trading Futures …………………………………………………………………………… 65
Trading Stock Options…………………………………………………………………… 80
STEP 2: SELECTING A TIMEFRAME……………………………………………………….. 85
STEP 3: SELECTING A TRADING APPROACH …………………………………………… 87
Fundamental Analysis …………………………………………………………………… 87
Technical Analysis ……………………………………………………………………….. 90
Day Trading Charts ……………………………………………………………………… 93
Technical Indicators……………………………………………………………………. 103
Popular Trading Approaches……………………………………………………….. 135
STEP 4: DEFINING ENTRY POINTS ………………………………………………………. 149
STEP 5: DEFINING EXIT POINTS …………………………………………………………. 151
Stop Losses ………………………………………………………………………………… 152
Profit-Taking Exits ……………………………………………………………………… 160
Trailing Stops …………………………………………………………………………….. 167
Taking Partial Profits………………………………………………………………….. 169
Time-Stops…………………………………………………………………………………. 169
STEP 6: EVALUATING YOUR STRATEGY………………………………………………. 171
How to Read and Understand a Performance Report………………………. 176
STEP 7: IMPROVING YOUR STRATEGY ………………………………………………… 183
THE 10 POWER PRINCIPLES –
MAKING SURE THAT YOUR TRADING PLAN WORKS …………………………….. 191
Principle #1: Use Few Rules – Make It Easy to Understand…………….. 192
Principle #2: Trade Electronic and Liquid Markets ………………………… 193
Principle #3: Have Realistic Expectations……………………………………… 193
Principle #4: Maintain a Healthy Balance Between Risk and Reward.. 194
Principle #5: Find a System That Produces
at Least Five Trades per Week ……………………. 195
Principle #6: Start Small – Grow Big…………………………………………….. 195
Principle #7: Automate Your Exits………………………………………………… 197
Principle #8: Have a High Percentage of Winning Trades……………….. 198
Principle #9: Test Your Strategy on at Least 200 Trades …………………. 198
Principle #10: Choose a Valid Back-Testing Period ……………………….. 199
PART 3: THE SECRETS TO DAY TRADING SUCCESS…………………..203
THERE’S MORE TO TRADING THAN JUST HAVING A STRATEGY……………… 205
THE SEVEN MISTAKES OF TRADERS AND HOW TO AVOID THEM…………….. 209
Mistake #1: Struggling To Identify the Direction of the Market ………… 212
Mistake #2: Not Taking Profits …………………………………………………….. 213
Mistake #3: Not Limiting Your Losses …………………………………………… 214
Mistake #4: Trading the Wrong Market…………………………………………. 215
Mistake #5: Lack of a Trading Strategy …………………………………………. 216
Mistake #6: Not Controlling Your Emotions…………………………………… 217
Mistake #7: Overtrading ……………………………………………………………… 218
THE TRADER’S PSYCHE ……………………………………………………………………. 221
THE THREE “SECRETS” TO DAY TRADING SUCCESS ……………………………… 227
THE TENETS OF DAY TRADING………………………………………………………….. 231
HOW TO START TRADING WITHOUT RISKING A SINGLE PENNY ……………… 235
BONUS MATERIALS ………………………………………………………………………..241
APPENDICES…………………………………………………………………………………….243
APPENDIX A – TRADING PLAN TEMPLATE…………………………………………… 245
APPENDIX B – BROKER CHECKLIST……………………………………………………. 249
APPENDIX C – ADDITIONAL RESOURCES …………………………………………….. 251
APPENDIX D – READING RESOURCES …………………………………………………. 253
APPENDIX E – GLOSSARY…………………………………………………………………. 257
APPENDIX F – ABOUT MARKUS HEITKOETTER…………………………………….. 271
APPENDIX G – COACHING PROGRAMS………………………………………………… 273

The Complete Guide to Day Trading

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