Day trading strategies for income feature Fibonacci numbers that can be used to pursue profits with the help of seasoned investment guides.
The day trading strategies for income include Fibonacci numbers that can be used to help make investment decisions in a three-step process. Successful day trading for income starts with a daily routine that is conducive to investing profitably.
The process can differ for each investor, but should include the two time-tested tools of preparation and guidance. But investors also need to guard against letting emotions interfere with the process.
For example, a City Index survey between November 23 and December 4, 2023, queried 3,000 participants and found the traders who responded to the questions sometimes let emotions cause them to become over-confident, revealing a need to integrate robust risk management practices and a disciplined approach in trading strategies. Whatever one’s level of confidence, effective risk management is pivotal for safeguarding financial capital amid market uncertainties, the survey found.
Day Trading Strategies for Income Feature Fibonacci Numbers: Retracement Lines
Day-trading sherpa Ahren Stephens, co-leader of the Trading Room advisory service, is available to help those who seek assistance. Stephens told attendees at the recent Las Vegas MoneyShow that they should create a daily routine to put them in a position to succeed.
Ahren Stephens co-heads of Pick of the Day and the Trading Room.
The Fibonacci retracement lines can be used in trend-trading strategies. If a retracement occurs within a trend, the Fibonacci levels can be used to put a trade in the direction of the underlying trend. The reasoning is that a heightened chance exists that a security’s price will rise from the Fibonacci level back in the direction of an initial trend.
Fibonacci levels can be used if a trader aims to buy a particular security but missed out on a recent uptrend. In such instances, a trader can wait for a pullback. Fibonacci ratios such as 61.8%, 38.2% and 23.6% can be plotted on a chart for traders to identify possible retracement levels and enter new trading positions.
Day Trading Strategies for Income Feature Fibonacci Numbers: Daily Routine
As co-leader of the Trading Room advisory service, Stephens uses Fibonacci strategies regularly. He told attendees at the recent Las Vegas MoneyShow that they could follow an ABCD pattern in an intraday chart pattern to show when a stock spikes, retreats, then ascends to break out at a new high of the day. A letter from the ABCD sequence is identified with each of the four major price movements, he explained.
The A is associated with a morning rally to new high. The B is for an intraday retreat and consolidation, with the C associated with a rise and break out through the morning’s high. The D reflects a rally to a new high.
The ABCD legs are usually either identical in size or nearly identical in size, Stephens told me. Fibonacci retracements and extensions are used to measure these areas and find extension points, he explained.
Day Trading Strategies for Income Feature Fibonacci Numbers: Know Your Pivots
“When making observations of current price action, we identify support, resistance and Fibonacci levels when coming up with our Pick of the Day service, which is great for traders who don’t have a lot of time to analyze charts,” Stephens said. “We also use these levels from time to time in our Inner Circle subscription, where we provide support and resistance levels before the market opens and identify retracement and extension targets.
“You have to define the major highs and lows on higher time frames to predict where the markets may go, using basic patterns such as the ABCD pattern. Fibonacci is a term derived from a mathematical sequence that starts with 0, 1, 1, 2, 3, 5, 8, 13, 21, and so on. It was named after the famous Italian mathematician Leonardo of Pisa. He introduced it to the Western world in his 1202 book ‘Liber Abaci’.”
Day Trading Strategies for Income Feature Fibonacci Numbers: Know Your Ratios
“By using the correct Fibonacci ratios, you can identify where the Market Makers, Whales, and institutions are buying or selling, and ride on their backs,” Stephens said. “We like to use the 38.2%, 50%, 61.8%, 78.6%, and the extensions of 127.2%, 161.8%, and 200% or double the range.
“Many traders get too involved in choosing the right Fibonacci ratios. Using the major Fibonacci ratios will put you in the same field as the bigger traders.”
Day Trading Strategies for Income Feature Fibonacci Numbers: Enter at Retracements
“By identifying clear reversal points, it is possible to catch a trade all the way to an extension point,” Stephens said. “By identifying clear retracement areas in a wave, we are able to take a trade all the way up to an extension many times and capture most of a move.
“For example, on a recent chart, we identified a Fibonacci retracement area near $495.36, and we were able to take the trade well up into the $510 area to complete an up wave ABCD pattern. Now, some may have sold earlier than that, but by finding these levels, we can ride on the backs of larger traders as well as trade in the direction of the major trend.”
Day Trading Strategies Include Fibonacci Number: Ultimate Trading Workshop
Senior partner Hugh Grossman teams up with Stephens to offer their Ultimate Training Workshop about how to day trade successfully. They created a set of training videos based on a live event held a few months ago, teaching everything they thought would help day traders.
Hugh Grossman is senior partner in DayTradeSpy’s Trading Room.
“No stone is left unturned,” Grossman said. “If you have never traded options before, this is what you need. Even if you are a seasoned trader, the nuances, tips, tricks and traps you will pick up from this series of 11 sessions, each roughly an hour and a half in length, will benefit you immensely.”
The two investment gurus share their “deep in the trenches” experience with concepts that cannot be found anywhere else, Grossman said. Key topics include setting up Schwab (formerly TD Ameritrade) Think or Swim charts to visualize patterns, identifying key indicators and strategies, “repairing trades,” money management and more, he added.
Stephens provides a deep-dive analysis can answer many questions in the Q&A section, Grossman said.
“It’s all there,” Grossman told me. “Of course, there may be other updated information only available through our trading room sessions, but the Ultimate Training Workshop will provide you the launch pad you need to get started day trading SPY options.”
The videos are available for at least six months and they can be viewed as often as desired, Grossman said.
“Fast forward, pause and rewind,” Grossman continued. “We recommend going through them at least once completely, even if you are an experienced trader. It’s the little subtleties that can make all the difference in your trading. Take advantage of 40+ combined years of Hugh and Ahren’s market participation… master the UltimateTraining Workshop.”
Scalping Strategy Involves Buying ‘at the Money’ Calls
The duo also uses a scalping strategy that involves buying ‘at the money’ options for the best balance of price and delta, Grossman told me.
“I like to buy 30 to 100 contracts, investing up to $20,000 per trade, depending on expiration dates,” Grossman said. “While it sounds like a high-risk trade, and it could be, by using our proven indicators, we minimize the risk. We make our gains quickly, and of course, see a prompt return of our capital in the process.
“I generally earn $500 to $1,000 on such trades. Repeating the process delivers several thousand dollars before most of corporate America takes its first coffee break.”
Further out expirations, of three to six days, offer a measure of stability and security, Grossman said. They also give traders high liquidity, he added.
Rocketing Geopolitical Risk
Geopolitical risk is mounting amid worsening wars. The threat may spur interest in day trading to avoid the risk from buying and holding for the long haul during turbulent times.
North Korean leader Kim Jong Un on March 7 to intensify drills to prepare for war, the country’s state-run media reported, as U.S. and South Korean forces conducted a joint military exercise. Kim, accompanied by high-ranking defense officials at a military base in the western region of North Korea, oversaw drills that were little different from actual war, the Korean Central News Agency reported.
With Congress in a stalemate about providing foreign aid, Ukraine is running low on ammunition and other military equipment needed to repel intensified attacks by Russian forces that invaded the neighboring nation in February 2022. U.S. Congressional leaders have been not found a compromise that would protect America’s southern border to win support from House Republicans to provide fresh funding of $95.3 billion mainly for Ukraine and Israel.
House Speaker Mike Johnson (R-La.) has stated his top priorities are to secure the southern border of the United States and to fund the operation of the U.S. government. The latter issue received a reprieve last week with passage of a continuing resolution to avoid a default on the country’s debt.
Poisoning Suspected as Cause of Navalny’s Death
Ukraine’s forces have needed to pull back from strategically important places within its sovereign borders in the face of Russia’s superior manpower and military supplies. The invasion, which Russia’s President Vladimir Putin still calls a “special military operation” more than two years later, has entered its third year and shows no signs of waning. Political opposition leader Alexei Navalny was imprisoned by Putin and transferred to an Artic prison where he died suddenly on Feb. 16 under mysterious circumstances after appearing in good health at a court hearing the previous day.
After initially refusing to release Navalny’s body to his mother for a funeral, Putin relented days later once enough time had passed to prevent the detection of any traces of poison. The burial, held on Friday, March 1, attracted thousands of mourners. Despite risking arrest by Russian authorities, mourners chanted anti-Putin slogans as they paid final respects to Navalny, who was serving a 19-year prison term for what Westerners would describe as publicly offering alternative views about Russia’s future direction.
Geopolitical Risk Rises in the Middle East
Meanwhile, the Middle East remains combustible with Hamas militants and the Israeli Defense Force (IDF) battling in a war that reportedly has led to more than 30,800 deaths in Gaza alone. The war began on Oct. 7 when Hamas fighters invaded southern Israel in a murderous assault that reportedly killed 1,163. Other barbarous acts included rapes, torture and the abduction of at least 250 others.
Israel responded with a military assault on the Gaza Strip to destroy tunnels used in attacks against its civilians and to pursue the perpetrators of the Oct. 7 butchery. IDF officials report that at least 242 of its soldiers have been killed in Gaza during its military response.
A week-long truce in late November led to Hamas freeing more than 100 Israeli and foreign hostages in exchange for Israel releasing about 240 Palestinian prisoners. However, talks aimed at securing the release of additional hostages have not produced tangible results.
President Biden approved and initiated a humanitarian airdrop of relief supplies for beleaguered Palestinian civilians in Gaza. Roughly 130 hostages abducted on Oct. 7 by Hamas remain trapped in Gaza. However, Israeli officials say about a quarter of them are dead.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Easter Season Sale! Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is great gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for reduced pricing on multiple-book purchases.
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