No matter how long you’ve been a trader, you always have to think about your day trading strategies.
Newbies often don’t know where to start. And smart, seasoned day traders are always on the lookout for ways to improve their skills.
Look, a lot of people think that trading has to be this big, scary, complex thing. But for some top traders, they go back to the same strategies again and again. They may change as the markets change, but the core is the same.
Today, we’ll check out 7 timeless day trading strategies that you can use in your trading session. Let’s get to it!
Table of Contents
- 1 What Is a Day Trading Strategy?
- 2 7 Solid Day Trading Strategies
- 3 Use StocksToTrade for Your Day Trading
- 4 Conclusion
- 5 One Platform. One System. Every Tool
What Is a Day Trading Strategy?
Before we begin, let’s talk about what exactly a day trading strategy is and why you need one.
It’s common for stock market newbies to open up a trading account, throw some capital into it, and randomly make some stock trades. But too often they blow it up — all on bad trades.
So what’s the biggest reason they lose? Usually, because newbie traders don’t take the time to study the market before they jump in. They don’t have a strategy for making smart, informed trades.
And if you go into the markets without a strategy, you’re basically gambling. Strategy is key — just like it is in any other activity whether it’s playing chess, building a shed, or playing golf. It’s just good practice to have a strategy, a plan for how you’re going to trade.
Now, in terms of day trading, a smart strategy for day trading will include your trading setups. You do the research to figure out when to enter a trade, where to place your stop loss. And you also plan for what to do if the trade either goes your way or blows up in your face.
The Best Day Trading Strategies
Newer day traders often look for shortcuts … They search for the absolute best strategy with the idea that they can achieve success quickly.
But here’s the reality: There are no ‘best’ day trading strategies for beginners … or for anyone really.
Markets change. People change. That means certain strategies will work better in certain market environments and for different types of stocks. And maybe more importantly, certain strategies are better suited to certain individuals…
It has a lot to do with lifestyle, daily responsibilities, and your mindset or psychology.
Some traders are suited to orderly moves in liquid large-cap stocks, others are suited to high-risk, low-float penny stocks that can see big percentage fluctuations in a day.
So when you’re picking a strategy, do your research, of course. And make sure you consider what will work best for you.
Day Trading Strategies for Beginners
I’m often asked what’s the single best strategy for newbie day traders … Honestly, it’s a tough question to answer.
There are so many factors to consider. Like I wrote above, it really depends on the current market action as well as each trader’s talents and mindset.
Some traders buy intraday breakouts, and some like to short overblown stocks. Others scalp in and out of large-cap stocks twenty times a day.
If I had to give you a rule of thumb for the perfect beginner strategy, it would be this: Less is more. Look for a strategy that allows you to watch the market and wait for the perfect setup. Don’t just dive right in the deep end only to drown!
7 Solid Day Trading Strategies
Over time, the markets constantly change. That means smart traders need to regularly evolve the strategies they use.
Thankfully, there are some core fundamentals in trading. Here’s a list of seven core strategies and techniques traders of all levels can build on.
#1. Watch Charts to Time Your Trades
If you look at day traders sitting in front of their screens, you probably notice that they almost always have a bunch of stock charts open.
A stock’s chart shows the recent price movements, key support and resistance levels, trend direction, and more.
When you day trade, you need to learn to time your trades so that you can ride the short-term price moves. So it’s important to keep an eye on the stock’s price action. The best way to do this is by looking at charts.
#2. Have a Trading Plan and Stick to It!
Think about building a house … You have blueprints. You plan for the whole project, including where everything will go and how it will all come together.
Smart traders also make a plan before they start trading.
A good trading plan will include nearly every decision that can come up while you’re analyzing and trading stocks.
That can include which setups you look for, which types of stocks you trade, how much you risk, where you place your stops, how you exit your winning trades, and much more.
It’s also a good idea to write down your entire trading plan. It may seem tedious, but having something to follow in the wild markets can help you stick to your plan.
#3. Having the Patience to Wait for the Best Setups
Average newbie day traders can often see potential trades everywhere. So they may jump in and out of all kinds of stocks hoping to make a profit. But that likely ends in a bunch of losses — and paying a ton in commissions.
Most professional traders don’t generally trade like this. Instead, they trade like a sniper.
Sometimes, that means sitting on the sidelines while you wait for the right risk-to-reward setup for your strategy.
If you can develop the patience to wait for those awesome setups, you’ll be well on the path to trading smarter.
#4. Try to Master Just a Few Setups
If you pick up a book on charting, you’ll quickly learn that there are a ton of chart patterns, technical indicators, and trade setups.
A lot of newbies think they need to try to memorize and know it all. Then they randomly look through charts for anything that looks similar to what they’ve memorized. So maybe they know twenty different setups or, but they won’t master any of them.
That can make for sub-par trades and add up to frustration.
Instead, start with learning a single trade setup. That may be a specific chart pattern or something you look for on the Level 2 quotes. When you find a trade setup that suits you, test it. Look at the charts and see how it performs. Maybe paper trade it.
Then trade only this setup. If your exact trade setup doesn’t happen on any given day. That’s OK. Just don’t trade that day.
By focusing on that single trade setup, you eventually learn to master it and internalize the pattern’s nuances.
A lot of successful traders only use a handful of setups at most — that’s what works for them. So take the time to find the right fit. You don’t have to master every move.
#5. Start Small
When learning to trade, you gotta learn to walk before you try to run.
What do I mean? When you’re just starting out, trade only small positions and only use a small amount of capital in your account.
There are plenty of stories of traders quickly blowing through wads of cash. They lose big money. And they could’ve learned the same lessons even if they’d only traded with a $1,000 or $2,000 account.
I think new traders should start trading with a small amount of capital and trade small positions. When you improve your skills, build confidence, and develop consistency, then think about upping your trading size.
#6. Do Your Homework
Some people (like me) hate homework and will look for any excuse to get out of it.
Now, don’t run away when I tell you this, but to be a smart trader, you gotta be comfortable with doing a bunch of homework…
And I’m not just saying this, but trading homework can actually be a lot of fun.
Your trading homework is done outside of market hours. It can include analyzing which stocks were the biggest percent movers and how you could have traded them. It can also be researching new trading setups, reviewing your track record and learning how to improve, working on your trading emotions, and so much more.
I can tell you that for me, doing my trading homework is one of the biggest reasons for my trading success. Find your groove and get comfortable with it!
#7. Learn From Other Traders
Trading can be a pretty isolated activity. You sit in front of your computer for hours each day. And often there’s no one to talk to about the crazy market action.
A big part of my success over the years has come from interacting with other traders … seeing what they’re doing and learning more about what’s currently working in the markets.
That’s why I recommend that you build a network of traders who you can relate to or join an online trader community. If your focus is trading U.S. stocks, consider joining StocksToTrade Pro, our elite trading community.
With StocksToTrade Pro, you can join me as I approach the market. I share my market analysis with members twice a day. It’s also a place for you to interact and share experiences with other traders in the chat room. Plus, you can attend regular cutting-edge educational webinars.
This can be a great way to get a crash course in day trading strategies and more. No more guessing at trades or even how to approach the market.
I honestly believe StocksToTrade Pro is one of the best trader educational resources around. Come and join us today!
Use StocksToTrade for Your Day Trading
No matter what style of day trading you prefer, you want to be able to watch the market action, analyze stocks, and place trades as quickly and efficiently as possible.
That’s exactly what StocksToTrade can help you do. It’s THE platform created BY active traders FOR active traders.
The StocksToTrade team and I spent years building the exact trading and analysis platform we needed to help make our trading days as smooth as possible.
We’ve added and perfected just about every feature under the sun, including things like:
- Beautiful, elegant charting features that can help you analyze price action, export charts, and overlay all your favorite technical indicators.
- Ultra-powerful, but easy-to-use stock scanning to help you quickly find trade setups as they’re about to move.
- Access to all the major exchanges in the U.S., including the OTC markets and pink sheets … you won’t have to look far for trading opportunities.
- News stories, SEC filings, and social media buzz to help you spot the latest hype on your favorite stocks.
That’s just a few of the many features included on the StocksToTrade platform.
But check it out for yourself. Grab your 14-day trial of StocksToTrade for just $7 today.
It seems like nearly everyone wants to be a day trader these days, but too many people just don’t know how to do it well.
If you follow the day trading strategies in this post, they can be your cheat sheet to and guide to being a smarter day trader.
Remember, trading doesn’t have to be complicated. It’s often better to keep things simple. But no matter what, make sure you’re really skilled in those simple activities. Focus on your fundamental skills.
Now go dive in! Fire up your trading platform and start mastering your go-to day trading style.
Don’t have a trading platform yet? We’ve got you covered. Get 14-day trial of StocksToTrade for just $7 and see how it can help boost your trading day.
Are you a day trader, swing trader, position trader, or investor? I mostly day trade since I love battling in the markets each day. Why and how did you choose your style? Tell me in the comments below!