We are excited to announce the launch of the next video in our beginners trading guide. In case you missed it, you can check out the first video from the learn how to day trade series.
Every couple of weeks, we will be releasing a new video with in-depth lessons about how to survive the stock market. We have a great lesson in store for you this week!
This Week's Day Trading Lesson Plan
This week, we cover a lot of important topics regarding technical analysis. Technical analysis is the foundation of all of the day trading we do so it's important to make sure you have a firm grasp on the basics. While this is a beginners series, there is still plenty to learn for traders of all skill levels.
Introduction to Candlestick Charting
If you have any experience with the stock market, you've probably seen a stock chart before. That said, not all stock charts are the same. Most casual investors use line charts, which give them access to basic data about a stock's price over time. As day traders, we are looking for a more informative chart. There are a lot of different types of stock charts to choose from, but one of the most popular types for day trading is candlestick charts. In this segment, we discuss the basics of reading charts and expand into the process of analyzing candlestick charts. Our goal is to make a seemingly overwhelming candlestick chart easier to read.
We will teach you how candlestick charts work and give you a visual representation of how the candles are formed. We will also explain how these charts can be used across different timeframes, which can day traders, swing traders, and investors.
In this segment, we explain what stock volume is. High volume trades allow us to get in and out of stocks with ease. We'll explain the purpose of volume and what you should look for.
Level 2 Analysis
Level 2 screens partner well with stock charts. If you haven't heard of Level 2 before, don't worry. Level 2 is a tool utilized mostly by day traders who are looking to get a better understanding of the supply and demand of the market. Level 2 screens provided and added layer of insight that can help you make better trades. Simply put, Level 2 screens show you how many people want to buy or sell a stock and at what price they'd like to do so.
In this section, we will also go over Time & Sales data. Time & Sales windows are generally shown next to a Level 2 screen and represent the live trades for a given stock. You can see how many people are buying/selling a stock, the price they buy/sell at, and the amount of shares.
After explaining how Level 2 works, we will also introduce some basic Level 2 analysis strategies such as understanding liquidity, spreads, and volume.
If you have any questions about this lesson, feel free to post them in the comments below or on YouTube!