V.6:9 (333-336): Day trading and short-term trading techniques Part 2 by Kent Calhoun
Product Description
Day trading and short-term trading techniques
Part 2
by Kent Calhoun
In my three years of day trading markets in Chicago, not one person who opened an account strictly for day trading purposes lasted more than six months. Yet, the most successful traders held positions for a short-term period. Many people were good day traders but commissions and market slippage eventually took their toll.
Consider the type of trading you will pursue to achieve commodity profits. The day trader and short-term trader, especially, must contend with significant physical and psychological adjustments.
To me, the market is always in the process of achieving new highs/lows on five distinct levels (Figure 1). These levels are defined by the length of time during which the high or low occurs:
•Major - 26 calendar weeks with lower/higher prices for at least 10 calendar weeks before and after the highest/lowest price.
•Intermediate - 6 calendar weeks with lower/higher prices for at least 12 trading days before and after the highest/lowest price.
•Minor - 12 trading days with lower/higher prices for at least 5 trading days before and after the highest/lowest price.
•Short-term - 5 trading days with lower/higher prices for at least 2 trading days before and after the highest/lowest price.
•Intraday - The high and low for each single trading day.
In my three years of day trading markets in Chicago, not one person who opened an account strictly for day trading purposes lasted more than six months. Yet, the most successful traders held positions for a short-term period. Many people were good day traders but commissions and market slippage eventually took their toll.
Consider the type of trading you will pursue to achieve commodity profits. The day trader and short-term trader, especially, must contend with significant physical and psychological adjustments.
To me, the market is always in the process of achieving new highs/lows on five distinct levels (Figure 1). These levels are defined by the length of time during which the high or low occurs:
•Major - 26 calendar weeks with lower/higher prices for at least 10 calendar weeks before and after the highest/lowest price.
•Intermediate - 6 calendar weeks with lower/higher prices for at least 12 trading days before and after the highest/lowest price.
•Minor - 12 trading days with lower/higher prices for at least 5 trading days before and after the highest/lowest price.
•Short-term - 5 trading days with lower/higher prices for at least 2 trading days before and after the highest/lowest price.
•Intraday - The high and low for each single trading day.
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