📈

Day Trading Guide

Jul 6, 2025

View transcript

Overview

This lecture provides a comprehensive guide to becoming a profitable day trader, covering foundational concepts, technical and fundamental analysis, trading strategies, risk management, trading psychology, and essential steps for getting started, even for complete beginners.

Introduction to Day Trading

  • Day trading is predicting short-term price movements in assets like stocks, forex, crypto, or futures to profit from both rising and falling markets.
  • Unlike investing, day trading aims for quicker profits without holding positions for long periods.
  • Day trading offers financial, time, and location freedom, and can be started with small funds ($10+).
  • Common myths: requires huge capital, special equipment, years to learn, or many hours daily—these are false.

Types of Markets & What to Trade

  • Five main markets: Forex (currencies), Futures (commodities, indices, energies), Stocks, Options, Crypto.
  • Forex: trading currency pairs (e.g., EUR/USD), highly liquid, 24/5.
  • Futures: contracts to buy/sell assets at a set price in the future; highly regulated, often lower fees.
  • Beginners often start with Forex or Futures due to lower capital requirements and accessibility.
  • Most popular pairs/assets: Forex—EUR/USD, USD/JPY; Futures—ES (S&P500), NQ (Nasdaq), CL (Crude Oil).

Trading Sessions & When to Trade

  • Key sessions: Asian (7pm–4am EST, least volatile), London (3am–12pm EST, moderate), New York (8am–5pm EST, most volume).
  • Best trading times are during London/New York session overlaps (8am–12pm EST).

Market Analysis: Fundamental vs Technical

  • Fundamental analysis: evaluates how news and world events affect markets; check sites like forexfactory.com for scheduled impactful news.
  • Technical analysis: uses charts and patterns from past price movements to predict future direction.
  • TradingView is the main platform for chart analysis; learn to use time frames, indicators, and drawing tools.

Understanding Candlesticks

  • Each candlestick shows price movement within a set time frame; green (bullish) = up, red (bearish) = down.
  • The body shows open/close prices; wicks show high/low during the interval.
  • Key candlestick patterns: shooting star (reversal, bearish), hammer (reversal, bullish), doji (trend indecision/reversal), engulfing (trend continuation/change).

Key Technical Tools: Support & Resistance, Trendlines, Patterns

  • Support: price area where asset tends to stop falling (look for buy opportunities).
  • Resistance: area where price tends to stop rising (look for sell opportunities).
  • Trendlines: diagonal lines showing market direction; price often bounces along trendlines.
  • Key levels: major turning points in price trends; draw lines at market’s major changes in direction.
  • Three market phases: consolidation (sideways), trending (up/down), breakout (sharp movement after sideways).

Indicators & Chart Tools

  • Use indicators sparingly; main useful ones:
    • Killzones: visualizes trading sessions.
    • VWAP (Volume Weighted Average Price): shows average price by volume—trade in line with VWAP.
    • EMA (Exponential Moving Average): shows trends, can set to different time periods.
    • Volume: shows how much is being traded during each candlestick.
  • Too many indicators cause confusion; focus on core ones.

Trading Strategies

  • Three primary trader types: scalpers (quick trades, seconds-minutes), intraday (trades within the day), swing traders (hold for days/weeks).
  • Top 3 strategies:
    1. Ultimate Support & Resistance: Wait for price to hit zone, confirm with a pattern, enter on break of recent high/low, use stop-loss below/above recent swing.
    2. Squeeze Strategy: Identify converging trendlines (“squeeze” zone), enter on breakout above/below with confirmation, use stop-losses and take-profits at recent swings.
    3. Heikin-Ashi Scalping: Use Heikin-Ashi candles for clarity; on 1min timeframe, take trades after “clean” pullbacks and a strong doji reversal candle, only in VWAP direction, always use a 1:1 risk/reward.

Backtesting & Journaling

  • Backtest strategies using TradingView’s replay mode or fxreplay.com to practice and gather data.
  • Journal every trade: record entry/exit, reason, result, win/loss, and notes to identify patterns and improve.
  • Backtest at least 50 days to gather accurate win rates and optimize strategies.

Creating a Trading Plan

  • Define your trading type, timeframes, instruments, strategies, risk per trade/day, entry/exit criteria, and rules for trading during news.
  • Include real-life consequences for breaking the plan; accountability is critical.

Brokers and Platforms

  • Broker = where your trading funds are held; platform = software where you place trades.
  • Forex: Osprey FX + TradeLocker (for charting and execution).
  • Futures: Tradeovate (broker and platform).
  • Always use real-time data subscriptions for accurate market prices.

Risk Management & Using Prop Firms

  • Never risk more than 3% per trade as a beginner.
  • Start with demo accounts, then small live accounts, scaling up slowly.
  • Prop firms let you trade with large capital for a small fee/challenge—great for scaling after you prove consistency.

Trading Psychology & Core Principles

  • Trading success is 80% psychology: control emotions, avoid impulsive decisions, focus on probabilities, not one-trade outcomes.
  • Key principles: trade A+ setups, follow the trend, journal everything, don’t overtrade, don’t overleverage, always use stop-losses, trust your plan, pay yourself regularly.

Key Terms & Definitions

  • Support Zone — area where price tends to stop falling and may reverse
  • Resistance Zone — area where price tends to stop rising and may reverse
  • Trendline — diagonal line connecting highs/lows to show market direction
  • VWAP — Volume Weighted Average Price, a key indicator for trend direction
  • Heikin-Ashi — type of candlestick that smooths out price action for clarity
  • Backtesting — practicing a strategy on past market data to verify its results
  • Prop Firm — a company that funds traders with large accounts for a fee or after a challenge
  • Stop-Loss — predefined price level to limit losses on a trade
  • Take-Profit — predefined price level to exit a trade in profit
  • A+ Setup — trade that meets all your strategy criteria exactly

Action Items / Next Steps

  • Register for a demo account and practice charting and placing trades.
  • Backtest your chosen strategy for at least 50 days and journal every trade.
  • Create a detailed trading plan with clear rules and set real-world consequences for breaking them.
  • Sign up with a recommended broker/platform (Osprey FX + TradeLocker for forex; Tradeovate for futures).
  • Begin live trading with small risk after consistent backtesting and journaling.
  • Periodically review your journal and trading plan and make adjustments as needed.

Full transcript