Page 6 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

Trading Frequency

(Select one “trading frequency” level that describes your current time frame or
frequency of trades):

1. Day Trader

The classic “day trader” opens and closes all his trades when the market is open during
the trading period and does not hold positions overnight. Day traders usually use 1-
minute to 5-minute charts. They can either use scalping” techniques or can be intra-day
“trend traders.”.

Day traders must keep their eyes on the ball and stay glued to their computer screens
all trading day so that they don’t miss an important entry or exit. This is a “full time” job.

There are three main reasons why day trading should be attempted by “master” traders
rather than “novice” traders:

• When day trading, trading time is compressed. Losses and wins come at you
faster and more often, which requires a mature, developed trading psychology.
• You must have the psychology to resist being seduced by the open market. You
must remain emotionless and objective.
• Day-trading results can be highly impacted by others trading on higher time
frames; and the lower your time frame, the greater the effect this has on you.

With that said, for “novice traders” paper trading an intraday time frame and day trading,
they will learn faster because they are getting more “simulated” trades under their belt
and are more likely to encounter a variety of market cycles and market surprises. This
experience creates a more confident and experience trader when they move from
simulated to live trading.

2. Position Trader

These traders usually use daily charts, weekly charts, and 60-minute interval charts to
base their trading decisions on. Primarily “trend traders” these “position traders” will
hold positions until the trend is exhausted, and therefore they may hold a position for a
few days, a few weeks, or even a few months if the trend continues.
Position traders have more freedom than day traders and do not have to keep their
eyes on their computer screens all day long. They can check their positions once a day
in the evenings after a regular full-time job. This can be a “part time” job.

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