Likes ReceivedPractical Technical Strategy -- Day Trading
In the stock market, there is a practical technique called day trading, which allows you to continuously reduce your holding costs during fluctuations and even turn losses into gains during downturns. Many people have heard of day trading, but few truly master it. Today, let's discuss: what day trading is, how to do it, and the core techniques and precautions.
What is "Day Trading"?
"Day trading" refers to taking advantage of short-term fluctuations to buy low and sell high without changing the overall position, thereby reducing costs or increasing floating profits.
There are two types of day trading:
Positive T (sell first, buy later): Sell part of the position at a high price, then buy it back at a lower price when the stock falls.
Reverse T (buy first, sell later): First increase the position at a low price, then sell it at a higher price to profit from the difference.
Why Day Trade?
Reduce costs: When trapped in a position, gradually lower the average cost through fluctuations.
Improve capital efficiency: Idle funds from holding positions can participate in fluctuations to earn differences.
Increase initiative: In volatile markets, you no longer passively wait but can respond strategically.
Alleviate anxiety: Even if the stock price doesn't rise, day trading can build confidence.
How to Day Trade? (Using Positive T as an Example)
Assume you hold 1,000 shares of a stock, currently priced at $10:
Determine the short-term fluctuation range: e.g., expect today's range to be $9.8 - $10.4.
When the price rises to $10.3, sell 300 shares.
When it falls back to $10.0, buy back the 300 shares.
Result: You still hold 1,000 shares, but your cost is reduced, and you earn a $90 difference.
Key Techniques for Day Trading
1. Set the Fluctuation Range
Combine the previous day's fluctuations, the 5-day moving average, and trading volume to set reasonable high and low points.
2. Control Position Size
It is recommended that each day trade does not exceed 30%-50% of the total position to avoid missing major trends or increasing risks.
3. Pay Attention to Rhythm and Avoid Greed
Day trading is about capturing "range profits," not trying to catch tops or bottoms. Knowing when to stop is key.
4. Use Trading Volume to Assist Judgment
Be cautious about selling during high-volume rallies and consider buying during low-volume declines—rhythm is more important than prediction.
Which Market Conditions Suit Day Trading?
Sideways/volatile markets: Frequent fluctuations make them ideal for day trading.
Trapped positions: When you don't want to add to your position but want to optimize costs.
Which conditions are unsuitable?
One-sided uptrends: You might sell too early and miss big gains.
One-sided downtrends: You might end up trapped deeper, amplifying risks.
Common Misconceptions and Reminders
Frequent trading: Day trading isn't something to do every day—only when there's a clear range.
Over-leveraging: Don't disrupt your overall position for day trading, as it increases risks.
Losing sight of the main strategy: Day trading is just a supplement; don't deviate from your original trading plan.
Stock trading isn't about who's smarter but who's steadier and more disciplined. Day trading isn't about prediction but about discipline and understanding fluctuations. Experts don't stare at screens gambling on direction—they go with the flow and win with rhythm.
Remember this: Don't fight the trend, don't oppose the market—just befriend the fluctuations.
Day trading isn't magical, but when used well, it can help you regain control during volatility and turn fluctuations into opportunities. $Circle(CRCL.US) $Tesla(TSLA.US) $NVIDIA(NVDA.US) $AMD(AMD.US) $Super Micro Computer(SMCI.US) $SPDR S&P 500(SPY.US) $Netflix(NFLX.US) $Meta Platforms(META.US) $Apple(AAPL.US)
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