How to Day Trade - Option Trading

To day trade, you must implement this thing into your trading life, which I have explained in detail in this article.

Analyzed the Chart Pattern Before the Market,

It is essential to see the chart pattern before the market opens because it will give an idea about the market direction. Also, it will help you to make good decisions about your day trading plan.

 

Make a Plan when the Market is Open

As the market opens, look for the 5-minute timeframe candle to close. If you are an option buyer, you should wait to close any 15-minute timeframe candle to close since the market will be volatile. Also, see if there is any price action created in the chart. The time frame will be anything, and it can be five, fifteen and 1 hour.

If you are an option seller, you must look for the opportunity because you have the advantage of time decay.

 

Look at Trade Opportunity in 15 minutes Frame

No matter whatever strategy you choose, you can think of to take a trade if a bullish or bearish candle appears in the 15-minute candlestick pattern. Only use the 1-minute and 5-minute time frames for intraday trading if you are an experienced trader.

Nonetheless, you can use them to observe the target. It requires patience and a good mindset to take a trade on a 5-minute frame. If you cannot keep your emotions under control, you can incur losses and regret your decision to abandon the position while the market is heading in the right direction.

 

Look at Trade Opportunities in 1 hour Frame

For intraday trades, you can also choose a larger time frame, but as the time frame gets longer, the stop loss also gets longer. Stop loss is relatively large, but the target will be extensive. As long as you're a successful trader, you can create your breakout theory, as I did.

In general, using the technical indicators in the first place will create confusion; instead, stick to using support, resistance and price action. After all, if you are unaware of the most crucial details, simple tasks will quickly become complicated.

 

Do Not Trade without Stop Loss or Trailing Stop Loss

The trailing stop loss will protect your profit while stopping you from suffering significant losses. Individual people make this mistake and end up closing their position with loss. Avoid making this kind of mistake because nobody knows the market direction. You can keep the profit you made during intraday trading sessions by using a trailing stop loss.

 

Always Avoid to Trade All Day

Aside from all those people who make good money in the trading sessions, at the same time, some people trade all day to the end but do not make any money, so it's better to avoid over-trading.

Most of the time, momentum begins within an hour and fifteen minutes after the market opening. Most markets then move sideways.

Nonetheless, most professionals trade in the morning hours. Every major participant follows the same strategy since everyone needs liquidity to buy and sell. Until and unless there is any news in the market, the momentum is rare during non-trading hours. Also, there is a second momentum after midday.