Foundations — the craft

Day trading, mechanics first.

Before indicators and strategies: what the business actually is, how to read raw price structure without a single indicator, candlestick literacy, order types and execution, the CFD mechanics that silently eat your edge — and the daily routine that holds it all together.

1 · The business you're actually in ↑ top

Day trading is not "predicting the market". It is running a high-frequency, small-edge business where the edge is measured in fractions of a percent per trade and survival depends entirely on cost control and repetition. Get the arithmetic straight before anything else.

Style	Hold time	Chart	Trades / week	Edge comes from	Killed by
Scalping	Seconds–minutes	1m / tick	50–200+	Speed, liquidity, tiny repeatable inefficiencies	Spread & commission; one oversized loss
Day trading	Minutes–hours, flat by close	5m / 15m	5–25	Session structure, levels, intraday trend	Overtrading in chop; revenge trades
Swing	Days–weeks	H1 / D1	1–5	Higher-timeframe structure, patience	Overnight gaps; position sizing on leverage

Fig F1. The only equation that matters. Most losing day traders have a small positive gross edge and a larger friction bill.

The uncomfortable base rate
Broker disclosures across EU/UK regulated CFD providers consistently report that ~70–80% of retail accounts lose money. That statistic isn't about intelligence — it's about the equation above: undersized edges, oversized positions, and friction on high trade counts. Everything on this site is aimed at the three controllable terms: raise expectancy (better setups), lower frequency (selectivity), and cut friction (execution and instrument choice).

2 · Market structure — reading price with no indicators ↑ top

Every indicator on this site is a derivative of price. Structure is price itself: the sequence of swing highs and lows that tells you whether buyers or sellers are in control, and the precise moment that control changes hands.

Fig F2. Structure in one picture. The circled break of the last higher low is the earliest objective evidence the uptrend is over.

Support & resistance are zones, not lines — and why they work

A level matters because orders sit there, not because it's a round number on your chart. Three mechanical reasons price reacts at a level:

Unfilled interest: buyers who missed the last rally place limit orders at the price where it started. Their orders create the bounce.
Trapped traders: people short from a failed breakdown must buy back to exit. Their stops are fuel for the move against them.
Stop clusters: everyone puts stops just beyond obvious levels — which is exactly why price so often wicks through before reversing.

Fig F3. The sweep-and-reverse. Enter on the reclaim of the zone, not on the first touch — this single habit changes stop placement forever.

Practical rule
Draw zones from wick to body of the reaction candles, roughly 0.25–0.5 × ATR thick. Then demand a reclaim: price wicks through and closes back inside. That's the failed-break entry used in Strategy 4 and combination C8 — and it converts the stop-hunt from your enemy into your trigger.

Multi-timeframe alignment — the 3-chart rule

One timeframe lies. Three tell the truth. Use a consistent ratio of roughly 4–5× between them:

Chart	Question it answers	What you do with it
H1 (context)	Which way is the day biased? Where are the big levels?	Sets permission — you only take trades in this direction unless the structure has flipped
15m (setup)	Is a setup forming? Where's the zone?	Marks the entry zone and the invalidation level before price arrives
5m (trigger)	Is the zone holding right now?	Provides the entry candle and the precise stop

The alignment test: if you can't state your H1 bias in one sentence, you're not ready to take a 5m entry. When the timeframes disagree, the correct trade size is zero — disagreement is the signal that this is chop.

3 · Candlestick literacy ↑ top

A candle is a story about a fight: who pushed, who won, who got trapped. You only need six shapes — and each one only means something at a level. In the middle of nowhere, a hammer is just a candle.

Fig F4. Anatomy. Wick length relative to body is the whole message.

The six candles worth knowing (and what each one means)

Fig F5. The working set. Everything else in candlestick literature is a variation on rejection, engulfment or indecision.

The candle traps
1 — Context-free candles. A hammer mid-range means nothing; a hammer at a level with confluence is a trigger. Always ask "where is this candle?" before "what is this candle?"
2 — Size relative to ATR. A "big engulfing candle" that's 0.3 × ATR is not big. Judge candles against current volatility, not against the last three bars.
3 — Timeframe arbitrariness. Your 5m hammer is just a 15m candle's lower wick. Before acting, check what the higher timeframe candle looks like — often the "reversal" hasn't happened there at all.

4 · Orders & execution ↑ top

Analysis is free; execution costs money. Knowing exactly which order type does what — and where it will and won't protect you — is the difference between a planned loss and a surprise.

Fig F6. The four working orders. A stop-loss is a sell stop below a long — it becomes a market order when touched, which is why gaps can fill it worse than your level.

Spread, slippage and the real cost of a trade

Every trade starts underwater by the spread. On a 15-point stop that's tolerable; on a 4-point scalp it's most of your edge. Compute cost as a percentage of your stop distance — that number decides whether a setup is even worth taking.

Situation	Typical spread	On a 10-pt stop	Verdict
US500, US cash hours	0.4–0.8 pt	4–8% of risk	Fine — scalping viable
GER40, 08:00–16:30 CET	0.8–1.5 pt	8–15% of risk	Acceptable for 15m+ setups
Gold, COMEX hours	0.2–0.4 pt	2–4% of risk	Good
Silver, quiet hours	2–5× gold's	Can exceed 25%	Halve size or skip
Any market, 2 min before news	3–10× normal	Unpredictable	Stand aside

Slippage hits hardest exactly when you need protection: gaps, news, and the first seconds of a session. Assume your stop fills 1–3 points worse than its level on volatile instruments, and size for that.
Guaranteed stops (offered by most CFD brokers for a premium) remove gap risk. They are worth it for overnight or event-risk positions and wasteful for ordinary intraday trades.
Never use a market order into an illiquid moment. Use limits at your zone and accept the missed trades — a missed trade costs nothing; a 6-point slip on every entry compounds into your whole edge.

CFD mechanics — leverage, margin, financing, and what a "point" is worth

A CFD is a contract mirroring the index or commodity price. You never own anything; you settle the difference. Three mechanics matter daily:

Point value: your P&L per point per contract. Know it cold for every instrument you trade — this is the multiplier in every sizing calculation (see position sizing).
Margin ≠ risk. Margin is what the broker holds; your risk is stop distance × point value × size. Confusing the two is the single most common way accounts die: a position that "only uses 5% margin" can risk 40% of the account.
Overnight financing: index/commodity CFDs charge a daily financing fee on the full notional. Irrelevant if you're flat by the close — which is one more argument for actually being a day trader rather than a reluctant swing trader.

Leverage is a size decision, not a feature
Available leverage (e.g. 1:20 on major indices under EU/UK retail rules) tells you the maximum position you could open. It has no bearing on the position you should open. Your size comes from your stop distance and risk budget — full stop. If the resulting position happens to use 2% of available leverage, that's correct, not timid.

5 · The trading day, end to end ↑ top

Fig F7. The routine. Note that two of six phases are explicitly about not trading — that's deliberate.

The pre-trade checklist — five questions, every single time

Regime: is the market trending or rotating right now, and does my setup belong in that regime? (ADX / structure / VWAP slope)
Location: is price at a level I marked before it got here? If I drew it in the last 60 seconds, it doesn't count.
Trigger: has the entry candle actually closed, or am I anticipating? Anticipation is a different (worse) strategy.
Risk: where exactly is the stop, what's the R:R to the nearest real obstacle, and is it ≥ 1.5R? Is size correct for my risk budget?
Condition: am I calm, on plan, and within my daily loss limit? If I'm chasing a loss, the answer to every question above is irrelevant.

Print it. Five seconds per trade. The traders who survive their first year are almost always the ones who mechanised this list instead of trusting their state of mind.

6 · How day traders actually blow up ↑ top

Failure mode	What it looks like	The structural fix
Oversizing	"High conviction" trade at 3× normal size — one loss erases a month	Fixed fractional risk, no exceptions. Conviction is not a sizing input.
Revenge trading	Immediate re-entry after a loss, worse setup, bigger size	Mandatory 10-minute cooldown after any loss; hard daily loss limit
Moving stops	Stop widened "just this once" to avoid being wrong	Stop is set at entry and only ever moves toward profit. Broker-side, not mental.
Overtrading chop	15 trades on a range day, all small losses, death by friction	Regime filter as a gate: ADX < 20 = fade-only or no-trade
No edge, just activity	Different setup every day, nothing measured	Trade 2–3 named setups only; tag every trade; review by tag
Winner too small, loser too big	Cutting wins at +0.4R, holding losses to −2R	Pre-defined partials and a mechanical trail; measure average win vs average loss in R
Trading the news	Entering seconds before data, filled at a terrible price	Flat 5 minutes before scheduled high-impact releases, always

The pattern behind the pattern
Every row above is the same failure: a decision made during the trade instead of before it. That's why the next two pages exist — risk maths converts your rules into numbers you can't argue with, and process makes those numbers stick when you're emotional. Read them in that order.