How to Win at Day Trading as a Beginner

Introduction

• The lecture focuses on winning at day trading, especially for beginners.
• It is broken down into three simple steps.
• Recommended reading and tool links will be provided.

Understanding the Difficulty

• Trading is challenging; the hardest part is consistency.
• Turning $583 into $10 million started with making just 10 cents a day.
• Once consistent, you can scale up profits.

Characteristics of Professional Traders

• Accumulated market knowledge over years (books, movies, etc.).
• Understand the best tools and software for trading.
• Follow a rule-based system or strategy.
• Have a proven track record and community/peer support.
• Experience big emotional ranges and have learned discipline.
• Develop educated intuition after years of experience.

The Importance of Candlestick Charts

• Candlestick charts are a universal language in the market.
• They help identify buy and sell signals.

Step 1: Acquire General Market Knowledge

• Determine your learning style: videos, books, hands-on.
• Suggested hands-on learning involves opening a simulated trading account.

Step 2: Develop or Adopt a System

• Every successful trader has a system or strategy.
• Options: develop your own or adopt a proven one.
• Ensure the strategy you adopt is from a verified profitable source.

Personal Strategy Overview

• Market Focus: US Stock Market, particularly small cap stocks.
• Time of Day: 7:00 a.m. to 11:00 a.m.
• Account Capital: Start with as little as $500.
• Stock Selection Criteria:
  • Price between $2 and $20.
  • Relative volume 5x or higher.
  • Percent change 10% or higher.
  • News catalyst present.
  • Float less than 20 million shares.

Step 3: Risk Management

• Manage risk by setting stop losses and determining potential loss per trade.
• Aim for a 2:1 profit-to-loss ratio.
• Focus on accuracy to improve the ratio and consistency.

When to Stop Trading

• Set a max loss for the day.
• Stop after hitting daily goal or giving back half.
• Walk away if emotional triggers arise.

Building Discipline

• Discipline is a muscle that strengthens with use.
• Engage in disciplined activities outside of trading.

Practice and Review

• Practice in a simulator and review metrics.
• Identify the gap between current performance and professional levels.

Conclusion

• Trading is difficult, especially achieving consistency.
• Discipline and practice are vital for success.
• Recommended reading includes books by Annie Duke and others on technical analysis and mindset development.

Additional Resources

• Recommended Reading:

  • "How to Day Trade" by Ross Cameron.
  • "Thinking in Bets" by Annie Duke.
  • "The Power of Knowing When to Walk Away" by Annie Duke.
  • "The Candlestick Course" by Steve Nison.
  • "The Happiness Advantage" by Shawn Achor.

• Tools and Further Learning:

  • Two-week trial at Warrior Trading.
  • Engage in trading communities for support and growth.