This is the page where I'll be covering my short term investing (for me, it'll be investing from a week or so down to day trading). I'll also add my past trades and thought processes for each of the trades below. 

 

Here's my main strategy when it comes to day trading, and it's a strategy that I created: I tested this strategy on Tradingview over past days of trading on at least 15 different stocks I think it's worked about 85% of the time so far.

 

To explain how it works, I first have to explain candlestick charts. Stock charts are usually shown in a line that tracks the price over time, but candlestick charts show price changes over time intervals as well as the general changes over time. You can change the time interval on the individual candles from 1 minute to 5 minutes to even year and more. The skinny part of the candle (the wick) shows the highest and lowest the stock price reached over the interval. The thicker part (the body of the candle) shows where the price started at and where it ended at over the interval. The color of the candle (usually red or green) shows if the stock price went up or down during that time. Traders also switch between time periods often to notice certain patterns over time, such as fair value gaps (an imbalance in the price of a stock, but I highly recommend researching it a bit since it is too difficult to explain without diagrams and examples) or other chart movements that can signal a certain future move: liquidity sweeps, inverse fair value gaps, fair value gaps, trend lines, support, resistance, breakout, break of structure, or even a false breakout, etc (look up a list of technical analysis tools and patterns, and find ones that work for you, since everyone uses different ones, but I personally just use the ones I listed out here).

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Now that you have an idea of how a candlestick chart works, here is the strategy that I created: the strategy is mainly for stock options but it can work for buying or shorting stock, but it just isn’t as profitable. My first step before actually using the strategy is picking a stock for the day. I choose a stock with a lot of news or not a lot of news depending on what's going on in the rest of the market (I'll explain the difference in strategy below). But for my strategy, I first make each candle 5 minutes long, and wait for the first candle of the day to be established. Using a drawing tool (again, I use Tradingview, which has a lot of helpful drawing tools) to draw out a horizontal line from the midpoint of the first candle. Then switch the chart so that each candle is 1 minute long, but keep the line. Move the candle horizontally so that it is anchored to the 5th 1 minute candle. Wait for the first candle in either direction in the 1 minute time frame to form (after the 5th one) and at some point during the day, the price will make a move (can be big or small and it could be in 5 minutes or in a couple hours) in that same direction above or below the line you drew out depending on if the 6th candle was up or down (a candle going up means a stock price move going up, and a candle going down means shows a later negative move). The move is separate from the move of the candle. For an example of a trade I would take, let's say that the 6th candle is down, but the stock price is $1.00 above the line you drew out. The stock price will then drop at least $1.00 to below the line you drew. Buy a call/put (depending on if the 6th candle was up or down) as close to the price at where that line is drawn out as possible, benefiting largely from the jump in price for the option when it goes from out of the money to in the money [Here's an example for a trade that I wouldn't take: let's say that the stock price is already above the line by $1.00 and the stock goes up in the 6th candle. The strategy is pretty unreliable from there. Also, read about out of the money vs. in the money on the options page]; hold the option for however long you want, but I sell my option after the stock makes the move that I expect and for signs for the price moving in the opposite direction start to show. If the stock price is staying right around the price that you drew the line at, it may not be worth it to take the trade (you might not make that much), but with bigger moves in price, the strategy is really helpful. Signs for the reversal can be shown from a range of chart patterns, but look at some of the ones I listed out right before this strategy. Also, once the stock moves in the way you're looking for, use the same drawing tool to mark out the high and the low of the first 5 minute candle. These lines act as support and resistance. Support and resistance are when there is a certain price level that the price struggles to get past, so it tends to bounce back in the opposite direction. For example, there may be a point of resistance at $35 when the stock is at $34.95. If the stock reaches $35, it is more likely than not that the stock price will drop back down. Support works the same way but for a price lower than the stock price. If the stock breaks through the support or resistance level, it may break out (have a big price move) past that level. Back to the resistance example, the price could surge all the way up to $35.25, depending on the stock and its beta (volatility measured relatively to the market; a beta higher than one is more volatile while a beta lower than one is less volatile, but a negative beta is a stock that moves in the opposite direction of the market). There also may be some false breakouts too, which is why you should wait for the price to move a good bit first before taking your trade, since false breakouts happen when the price moves just past a key level. So the high, the low, and the midpoint of the first 5 minute candles are each individual support and resistance levels depending on where the price is. For the strategy: don't get too greedy; just take your gains once the stock makes the move that you expect. Lastly, this strategy only works with stocks that trade with reason. Stocks that have a negative earnings per share (they are trading entirely off of hope for the future not even what they're actually worth right now), days when big news is released (since there are usually big price swings and a lot of trading without reason), or stocks that are involved in crypto (since it's always really volatile) are typically unreliable for this strategy. 

Here's a picture to make sense of the strategy in real life: 

 

 

 

 

 

 

 

 

 

 

As you can see, the 6th candle was down, and the price ended up moving below the midpoint of the first five minutes of trading. 

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When there are big news days (for the whole market or for an individual stock), the market/stock will likely make a big move in a certain direction, so I take a different strategy. To find out the direction, mark out the high and low of the first 5 minute candle. Whichever direction the price breaks out to is the direction that the market will continue trending in for a while during the day. ​​

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Other than those main strategies, I use various Smart Money Concepts (which is analyzing chart structure to predict future changes in price) that work across every candle time interval that I'll explain here. I'll usually first look at the 1 hour candle (to see any major price moves and see any possible moves that could come from the strategies below on a large scale, which is easier to trade because of more room for error, more time to take profit, and it offers the best profits), but I'll go down to the 30 minute, 15 minute, 10 minute, 5 minute, and 3 minute to get a better idea for the smaller price moves and to see the general trends a little easier. I'll hold my position anywhere from 10 or so minutes to a few hours (I'll just set my stop loss and take profit and leave my computer. Also see below for more stop loss and take profit tips). 

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​Liquidity sweeps/grabs: These are large, sharp moves of price either up or down which is said to be caused by big banks triggering stop loss orders to then drive the price in the opposite direction later on. The banks use all the new liquidity (the available shares that the bank can pick up) from the stop loss orders to drive the price in the opposite direction of the sweep/grab. A grab is a shorter move (but still sharp), while a sweep is longer and more drawn out. There is a big difference between price dropping from bad news and a liquidity sweep. A liquidity sweep usually happens when there is no news so you know there is not a logical reason for the price to move in that way. Once a liquidity sweep happens, you'd want to pick up whatever stock/ETF/futures/commodity (the list goes on) that you're trading to hold while the price moves in the opposite direction after the sweep. However, there are also breakouts which look like liquidity sweeps, but they continue the trend shown. If there is a lot of momentum in one direction, I may take the trade in the same direction to benefit off of that, even though it is not clear yet if it is a breakout of the beginning of a liquidity sweep. After the move is over, you will be able to see if the price is somewhat stable (the breakout is over) or it is beginning to reverse (you can now tell that it was a liquidity sweep and you can now take the trade to benefit off of the price moving back in the opposite direction).

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Fair value gaps: A fair value gap formed between 3 candles on a chart where a gap is no overlap between the 1st and the 3rd candle. It happens when price moves too quickly, and usually the price then moves back into the "gap" in the area of the 2nd candle before continuing in the same direction as the 2nd candle. Fair value gaps work in both the positive and negative directions.

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Inverse fair value gaps: This is less common, but when the price of a 

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Support/Resistance levels----can be swing high, swing low, other key points that can either offer a price point that is hard to cross for both positive and negative moves. To mark them, draw out a line from either the wick or the body of a candle (but you definitely want it to be a group of candles) that clearly show a stopping point for price. If price reaches one of these levels, it usually will reverse back, but wait for some confirmation in the chart before entering a trade. If it moves past one of these levels, get ready to see if there's a breakout or a false breakout (see below). These are the usual strategies for trading support and resistance levels. Just know that they are very common, so they offer a lot of trading opportunities. Support and resistance levels are also seen in consolidation, which is when price bounces back and forth between a support and a resistance level. There will be a huge move in whichever level the price breaks through. 

 

 

Breakout

 

False Breakout: It's the same thing as a liquidity grab, but it's just a more general term for what is happening. To tell the difference between an actual breakout and a false breakout in a live market, I think a big part of it is just having to trade based on the look of the chart and really determine by on your own if the move is big enough to develop into a breakout or if you should still wait before entering a trade since it could reverse into a false breakout. But you should always wait for a candle to end past the support/resistance level before entering a trade. I thinks it's also best to wait for one more candle to end after that first candle that broke through the key level before entering a trade. If the candle is decent size moving in the same direction as the first candle it's very likely to be a breakout. If it's moving in the opposite direction a decent amount, it's a false breakout. If the price is staying about the same, wait for another candle or two or just mostly confirmation of the way the price is about to move. But no matter what, whichever way the price takes, be ready for a big price swing since it's trading around a key support or resistance level. 
 

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Wedge patterns:

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​It's not a specific pattern to trade, but here's some important investing ideas/strategies:​

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• When day trading, it is best to set a stop loss (every trading platform has a way to set one) and a price where you take profit (it's much more common in day trading platforms than in regular brokerage accounts) that you usually don't change to help rule out emotions in trading. But know that you can take profit whenever you want, so if you start to lose confidence in your trade, you can easily exit. 

• However, if price is moving towards your take profit mark, sometimes I move my stop loss a little bit closer to my take profit to keep my losses even smaller in the case of a quick change in the trade

• ​Also for my main strategy, I sometimes do a sort of dollar cost averaging. Like I explain in my Long Term Trading page, dollar cost averaging can help maximize gain when you're feeling good about the trade you've taken. So when a stock (and the strategy is mainly for stocks, not commodities or anything, which I usually use the other strategies for) doesn't look like it's going to make the move I expect, I usually buy more of the option, still not giving up on the trade and hopefully making even more when the price moves how I think it will. 

• When setting a stop loss and a take profit, it is very important to look at the past price moves of a security to get an idea for the general trend and for what kind of price moves are possible. For example, if the price of something is crashing and I see a small inverse fair value gap form, I may be a bit hesitant before entering the trade. I'll probably wait for a couple more candles. I'm saying that you should look at a larger trend first before entering in a trade on just a few candles. Also look at the larger trends to get an idea for where you should place your stop loss and take profit. For example, let's say that a breakout is happening to the positive direction past a point of resistance. But then let's say that there is another resistance point a little higher up that was created by price a while earlier. I would set my take profit at that point of resistance because I'm not sure if price will break through that point as well. It works the same way with the stop loss. 

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Looking the price in the past to get an idea for your stop loss and TP

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For short term trading, I'm currently using a funded account that has futures, commodities, and forex (currencies) available to trade. It's much easier to trade on the account than a regular youth trading account, since there is margin activated (so I don't have to wait for cash to settle), and the tools available for analyzing charts on the site are similar to Tradingview, which is what I'm used to. ________________

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