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Day Trading Strategies: Class Summary
Jul 6, 2024
Day Trading Strategies: Class Summary
Introduction
Background of Lecturer
: 10 years of experience, struggled initially but discovered a life-changing trading pattern
Objective
: Share pattern and strategy to help new traders
Initial Success
: Account grew from $583.15 to $17,000 in a month, averaging $893.24 per day with 87.8% accuracy
Key Concepts in Day Trading
Importance of Simplicity
Simple Strategy
: Find a trending stock, enter with a 5% stop loss, and sell half when up 10%, adjust remaining to a trailing 5% stop
Goal
: 10% account growth in one day, with one trade
Types of Stocks to Trade
Criteria
: Stocks that can go up 10% in one day, priced between $1 and $20 to maximize potential returns
Indicators
: 5 times relative volume, news catalyst (earnings, FDA approval, etc.), and high volatility
Finding Stocks
Scanning
: Identify stocks with high relative volume, news catalysts, and those up 10% or more
Tools
: Stock scanners, such as Finviz or custom tools
Example
: Stocks with 3.8 million to 39 million float are ideal targets
Trading Patterns and Setups
High-Relative Volume and Bull Flag Pattern
Pattern
: Stock moves higher, pulls back (not more than 50% of the move), buy at the first candle making a new high
Stop Loss
: Low of pullback
Profit Target
: New high
Real-Time Signs of Strength
Indicators
: Green on the tape, decreasing sell orders, jumping up levels on the ask price
Weakness
: Large sell orders, bursts of red on the tape, or dramatic reversals
Practical Examples
Significant Moves
: Examples showing stocks moving from $1.60 to $3.50, or $5.60 to $8.50
Pattern Success
: Utilizing pullback patterns to capitalize on significant stock movements
Print & Recognize Patterns
: Take screenshots and place them around your trading desk
Risk Management and Psychology
Cutting Losses Quickly
Mindset
: Successful traders lose quickly and then move on
Risk Management
: Tight stops, avoid averaging down
Common Mistakes
Fear-Based Trading
: Selling winners too soon, holding onto losers
Solution
: Scale into winners, cutting losers, capture FOMO without falling victim to it
Discipline and Recovery
Rules
: Max loss per day, position sizes, types of stocks traded
Recovering from Losses
: Taking 1-2 high-quality trades per day after a big loss
Minimizing Risk
: Walk away after small wins, avoid over-trading
Trading Tools and Platforms
US Broker-Dealers
: Require $25k for margin account (Charles Schwab, Lightspeed, Interactive Brokers)
Offshore Broker-Dealers
: Lower minimums, higher leverage (TradeZero, CMEG)
Platform Requirements
: Fast executions, stable performance, hotkeys
Plan for New Traders
Morning Routine
: Use scanners, research news, study charts
Entries & Exits
: Look for pullbacks, 2:1 profit/loss ratio, trail stops
Consistent Growth
: 4-6 weeks of profitability, focus on quality trades
Conclusion
Expectations
: It takes time to make consistent profits
Scaling Up
: Once consistent, increasing share sizes can significantly increase returns
Discipline is Key
: Follow rules, manage risk, and consistently apply strategies
📄
Full transcript