How Day Trading Works According to Einstein by Dr. Barry Burns

One of the most common mistakes novice day traders make is thinking that there is any stable reality to trading the markets.

There isn't. It's all relative.
Knowing this can actually make your trading more simple and allow you to trade with more confidence and higher profits.

We'll explore the concept in this article by discussing one of the most basic concepts of technical analysis: trend.

Traditionally an up trend is defined as a market making higher highs and higher lows, and a down trend is defined as the market making lower highs and lower lows.

You could look at a 2 minute chart of any market and find a period of time during which the market is in a down trend. But does that mean that "the" trend is down? Not necessarily.

If you look at that same point in time on a 60 minute chart you may see that what looked like a down trend on the 2 minute chart was actually a very brief retrace in a strong up trend on the longer time frame.

And you can take it much further.

You can look at a 1 minute chart, a 2 minute chart, a 3 minute chart, a 5 minute chart, a 10 minute chart, a 15 minute chart, a 30 minute chart, a 60 minute chart and even a daily chart ... and they are all going to look a little different, giving you different perspectives on "trend."

So which one is the real trend?

None of them!

It's all relative.

I know people who trade with many computer monitors because they watch 4, 5, 6 or more time intervals of their market concurrently. This is a mistake because it only leads to confusion. It's too much information and completely disorienting.

Einstein said that we should make things as simple as possible, but not simpler.
While he wasn't' referring to day trading specifically of course, it's good advice for every area of life, including day trading.

Since everything is relative based on the point of reference you establish, what a trader must do is simply choose a time interval they are comfortable with (based on the speed of execution required, the risk involved, trade frequency, etc) and establish that as your set up chart.

Then I recommend that you also use one more chart of a higher time interval (I use one that is 3 times the length of my set up chart) so you can see the market from one other perspective. This gives you a bird's eye view of the market and allows you to witness a "bigger scale energy" so you know if it is working with you or against you.

This will keep your trading simple ... but not too simple.
Dr. Barry Burns is the owner of Top Dog Trading and writes a Day Trading Blog. He offers a 5-day free video trading course which provides more training on how day trading works to help traders become successful.

He started his study of the markets under the direction of his father, Patrick F. Burns, who became independently wealthy through trading and had over 70 years of trading experience before passing away in 2005.

He has been the featured speaker at DayTradersUSA, and developed a 5 Day Course for WorldWideTrders.

Dr. Burns has been a headlining guest speaker for the Market Analysts of Southern California, given seminars around the country at many Wealth Expos as well as many Traders Expos, been interviewed on the Robin Dayne "Elite Masters of Trading" Radio Show.

Dr. Barry Burns was the former lead moderator of FuturesTalk chat room where he would guide listeners through the open and close of each trading day.

He is has written many articles for various outlets including eSignal Central.
He is currently one of the featured Experts at TradersKingdom.

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Day Trading Tips to Turn Amateurs Into Pros By Dr. Barry Burns

Day trading can be a thrilling way to make money. But it's more challenging than most beginners think. Here are some day trading tips that can help the new trader as well as the more advanced trader to achieve your goals faster.

First: Be careful not to over trade. The majority of the time the market is a random walk - meaning that it's moving without any rhyme or reason. Amateur traders taking small positions in the market are behind these unpredictable movements.

These amateurs do not affect the long-term movement of the market. The professionals, with their large volume and their willingness to hold positions longer, are the ones who create sustainable moves in the market that can provide meaningful profits.

Many people are drawn to day trading because of the excitement of the business and the potential for big, fast profits. This attitude sets up the trader for failure. Day trading does not have the frantic energy of a video game. Most successful day traders sit by the sidelines for long periods of time simply waiting for a high-probability setup to occur. The pros trade much less frequently than the amateurs think.
 
Second: The trend is your friend ... sometimes.
The truth is that the trend is a fair weather friend!
It is your friend early on. But trends get run out of steam.
Therefore there are 2 times to trade when you can put statistics on your side:
When a new trend is just starting.
When a trend has run its course.

Trading only at these 2 times allows you to put the statistics of the "edge" of the bell curve on your side. Trading in the middle of a trend, puts you solidly in the middle of the bell curve where anything can happen.
 
Third: Join free trading rooms for day trading tips but do exactly the opposite of what you hear!
I've participated in many chat rooms over the years, and have received a tremendous benefit from them. But the benefit did not come from listening to the teacher. It came from watching the comments of the participants as they shared what they were doing at any given time in the market.
The vast majority of the time they were dead wrong in their approach.

They reveal the mind of the unprofitable retail traders. It's almost eerie how the amateurs think alike when it comes to trading the markets. If you listen to them long enough in the trading rooms you'll start to notice the patterns of the things they do consistently. Do the opposite and win.

As an example, one of the most common problems amateur traders have, is resisting the urge to fight the trend. You'll often hear comments such as: "The market can't go any higher than this." "This market just has to turn around at this point." "The market is definitely way over-extended now."

It is absolutely amazing to see how amateurs habitually trade against the trend in an effort to find tops and bottoms. They are constantly looking for the market to turn around. As is always the case, you can profit tremendously by taking the other side of their trades.

Day trading can be extremely rewarding, but to be successful you must stand aside from the masses and avoid the herd instinct that drives so many. These 3 day trading tips can help you be among the minority who succeeds.

Dr. Barry Burns is the owner of Top Dog Trading and writes a Day Trading Blog. He offers a 5-day free video trading course which provides more day trading tips to help traders become successful.
He started his study of the markets under the direction of his father, Patrick F. Burns, who became independently wealthy through trading and had over 70 years of trading experience before passing away in 2005.

He has been the featured speaker at DayTradersUSA, and developed a 5 Day Course for WorldWideTrders.

Dr. Burns has been a headlining guest speaker for the Market Analysts of Southern California, given seminars around the country at many Wealth Expos as well as many Traders Expos, been interviewed on the Robin Dayne "Elite Masters of Trading" Radio Show, and is the former moderator of the FuturesTalk chat room.

He has a doctorate in Hypnotherapy and is a certified NLP practitioner, and therefore able to help people with the psychology of trading.
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How to Trade Breakouts When Day Trading

How to Trade Breakouts When Day Trading: In trading, markets can go into a range where they seem to float back and forth between two price points. Once this range is broken though, that is what is known as a breakout. How you trade these breakouts and the strategies you use, can have a large impact on how successful of a trader you are.