Why Do People Day Trade?
Just because we had a recent day where we broke new highs, that does not mean we should expect fast activity for the rest of the week and beyond. In fact, this video shows John Paul from DayTradeToWin trading the Trade Scalper and Atlas Line in relatively normal to slow market conditions. Why is it important that all of these Trade Scalper and Atlas Line, etc. video exist? People want to see the methods actually working in real-time conditions. Other than conducting time-consuming webinars day after day, the best way to get a sense of how the methods work is to record videos to watch so people can watch (and stumble upon them) at their leisure.
The significance of this video is the pure speed of this trade. We’re talking in and out in approximately one minute. John Paul uses NinjaTrader 8’s chart trader in combination with an ATM Strategy to get the green profit target and red stop lines on his chart. In gold, you’ll see the entry price. Because eight or so contracts are used, each tick up or down represents $100. If one point of profit was made, that’s $400 using eight contracts. Keep in mind, this is before any broker, exchange, or other potential feeds are applied. If you’re having difficulty with the calculation, each tick of the E-mini S&P 500 is worth $12.50.
The ATR is the main free tool that determines how long to stay in the trade, how much profit to go for, how much to risk for the stop loss, etc. It can be found in most trading platforms. If you want to follow DayTradeToWin’s trading style, set the ATR value (the period value in NinjaTrader) to four. This means the last four price bars, candles, etc. are used for the calculation. By default, NinjaTrader uses 14, which would cause the ATR to perform its calculation based on over an hour’s worth of price action. Is what happened an hour ago indicative of what’s happening at the moment? No, in fact, the market can be very much different in an hour’s time. A setting of four is much more realistic in establishing a more up to date of moment/price action potential considering current market conditions.
Yes, it is exciting to see price quickly or slowing approach a profit target. It may be even more exciting (and stressful) for price to nearly hit your stop loss and then retrace into victory. This excitement is what draws many traders to their charts every day aside from the income possibility. If trading was entirely boring, you would not find the enthusiasm across the industry, as can be seen in many testimonials and presenters giving their take on various stocks, news, politics, and how markets are expected to respond.