Dr Barry Burns - How to Day Trade - Secret Bar Intervals

How to Day Trade - Secret Bar Intervals
By Barry Burns

When most people first learn how to day trade, they do so on minute-increment charts. Each bar represents some increment of TIME - 1 minute, 5 minute, 15 minute, etc.

While this is certainly a viable way to setup your charts for a day trading system, there are other bar-increment options that are not based on time. Many new day traders are unaware of these.

For clarity, let's begin by defining terms. When referring to bar "increments," we are referring to how long a bar will continue to plot, from open to close, until that bar finishes and the next bar begins.

Even those who already know how to day trade are sometimes lacking in a complete trading education that would have provided them with the specific advantages and disadvantages of these various types of bars.

The 4 most common types of bars are these:

1. Minute increment bars: Each bar lasts for a certain number of minutes. As an example - a 5 minute bar would last for 5 minutes.
2. Tick increment bars: In this context a "tick" is a trade execution (regardless of the number of shares, lots or contracts involved in that trade execution). As an example - a 100 tick bar would last until 100 trades went through the market and when trade number 101 is executed, then a new bar would begin.
3. Volume increment bars: Each bar lasts until the volume parameter is met. As an example - a 10,000 volume bar on a stock would last until 10,000 share were traded on that stock; after that the next bar would begin.
4. Range increment bars: Each bar lasts until the market breaks out of a certain price range. As an example, an 8 tick range bar on the emini (8 ticks is 2 points) would last until the emini's would break out of a 2 point price range and then a new bar would form.

Whatever trading system you're learning how to day trade, it's worth running independent tests on it using all 4 of these bar interval choices. One is likely to out-perform the others, and making this simple adjustment may even make the difference between being profitable or not.

Dr. Barry Burns teaches traders how to day trade, is the owner of Top Dog Trading and was featured as a case study in the book "Using Candlestick Charting - How to Earn High Rates of Return Safely."

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.

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Join at http://www.topdogtrading.com

How To Trade Breakouts

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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Day Trading Rules to Live By Dr. Barry Burns

Most people looking to make money in the markets believe that the answer lies in finding some simple technical analysis strategies that will catapult them to profitability.

The truth is that trading is not as simple as beginners believe. It is a profession, and like any profession it requires a learning curve. Reading a book or getting a few simple "tips" is not going to turn you into a professional trader.

After studying for a length of time, it's not uncommon for students to begin their search for the "holy grail."

They search for more indicators, chart patterns, gurus, alert services or the latest secret day trading strategies and other things that will provide their answer to becoming successful.

But here's the fact. Success lies within you .. and it won't come easy.

In fact, one of my favorite success principles is this:

"Successful people do what unsuccessful people are unwilling to do."

Let's apply this to trading in the form of my list of "Day Trading Rules to Live By" ... all of which have to do more with you than with the market.

1. The consistency you need is in your mind, not in the market. Many in the market get frustrated because the market often behaves differently than they expect. You can't rely on the market to be consistent. It is largely a random walk. But there are times when the market does setup with a probability scenario that gives you an edge. Your job is be consistent in trading those probability setups and trade them every time they occur.
2. Trade like a cat. Most beginners over trade. It's one of the most common trading sins. Your job is to be better than other day traders in having the discipline to wait like a cat in the brush until just the right moment (your high probability setup) and then jump on the trade without hesitation.
3. Successful trading is simply a game of not making mistakes. Keep a list of your day trading rules posted on the wall or on your monitor and then follow those rules perfectly. You must be more disciplined than the average trader. Never depart from your rules no matter how good a trade "looks" or "feels" to you if it violates your objective and back-tested rules.
4. Only trade when you are in an optimal emotional state. Never trade when you are tired or are in an emotionally unstable situation (after a fight with a spouse or friend for example). Day trading is more like athletics than academics. Trading on such a short time frame requires you to be able to make split second decisions, and you're risking a lot of money when you do. Make sure your mind is sharp and your emotions are centered.
5. Keep a detailed trading log. Every day trading course I've seen has a trading log. Yet my experience in dealing with trading students demonstrates that less than 10% of them actually use it. This is a huge mistake. Not only should you log every trade, but you should also record how you felt and what you were thinking as you took the trade. In this way your logs will become a type of "biofeedback" mechanism for you. Personally, this was the difference that made all the difference for me.

These 5 day trading rules are not the type of rules that you were probably looking for. The masses want rules about indicators, price bars, where you get in and where you get out.

Granted, you definitely need clear objective rules about those things as well. Yet thousands of traders have those types of rules, and yet continue to fail because those rules are about market action.

They fail because they don't have, or don't follow, the more important rules the rules about their own action.

If you find yourself resisting the importance of these rules about your own behavior, realize that you are one of the masses who feels the same way. But since the masses fail at day trading, you must set yourself apart and do something different than them.

Following these 5 day trading rules are what the retail traders fail to do. Not because they can't do them, but because they are unwilling to do them. And remember, "Successful people do what unsuccessful people are unwilling to do."

Dr. Barry Burns is the owner of Top Dog Trading which teaches people how to avoid the long learning curve in day trading

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.

Article Source: http://EzineArticles.com/?expert=Dr._Barry_Burns

Forex and Stock Trading

Dr. Barry Burn's Favorite Set Up