It’s important to note there’s a different level of risk for each day’s trades. The lower the risk the greater the potential rewards. So for example, on a Monday night I will generally be trading long and short term options, since my daily risk will be lower. A Saturday is generally the night for option trades, since my daily risk will typically be larger, and therefore I am likely to get some profit. But then, it’s just a matter of luck what day that happens.
I prefer to use the average of the previous 5 days, rather than the best of the previous 5 days. So if I have 10 days of data, I would keep the 10th day average long, and the 10th day average short since that’s generally the longest since I know exactly how much of a potential profit I’ll get.
The important thing is to understand that for each specific day, risk is highest and reward is lowest. So if I go long on Monday, and I get a $5 dollar profit, that’s the best I ever did. If I went long on Friday, I will likely only get $1 dollar.
For example, if you have 2,000 shares and you trade at $80 per share, you should trade at $40 per share for the 5th day. If you go long on the 5th day, you would get $16 (8% increase) and if you go long on Monday, you would likely get a $30 (12% decrease) profit.
It’s also important to note that some days will be higher risk days for you and there are some trades where you may choose to go long or short for each individual share, but only do so based on your long/short philosophy.
How to get started
If you want to get started with swing trading, it really just involves the following simple steps:
Create up to 10 market alerts (default for day traders is two daily and two weekly). Create any alerts you want, which allows you to quickly access the data from the exchanges.
This can be done through trading programs, but also through the API provided by exchange websites, and is explained here.
For the purposes of this article, we’ll assume you have the APIs set up to receive alerts.
When trading, we want to know just how much of a margin we can get. So, if we want to sell an asset, we need to get the total leverage we can gain,
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