Restarting Your Day Trading Journey: Key Steps and Tips

Introduction

• Objective: Provide a checklist for starting or revamping a day trading journey.
• Background: Self-taught, many mistakes, significant financial cost, and wasted time.
• Target Audience: Both experienced traders and complete beginners.

Common Beginner Trap

• Initial Phase: Trying a trading pattern, experiencing early success.
• Second Phase: Position goes against you, reluctance to sell, waiting for recovery.
• Third Phase: Catastrophic loss, reinforces wrong psychology.

Psychological Aspect

• Key Insight: Traditional intuition fails in trading.
• Failure Rate: 90% of traders fail due to psychological errors.

Trading Mathematics

• Basic Statistics:
  • Risk-Reward Ratio: Amount earned per unit of risk.
  • Winning Percentage: Ratio of winning trades to losing trades.
• Example Calculation:
  • Starting Account: $500
  • Risk per Trade: 1%
  • Risk-Reward Ratio: 1:2.5
  • Winning Percentage: 35%
  • Result: 37% account growth over 100 trades.

Risk-Reward Calculation

• Concept: Manage risk-reward ratio to ensure profits even with low win rate.
• Illustration:
  • Risk Factor: One unit of risk defined by entry and stop loss.
  • Reward: 3 units of profit if target is met.
• Key Message: It's about risk management, not winning every trade.

Improving Trading Process

• Software: TradingView
  • Tool: Fibonacci analysis to identify market reversals.
• Position Sizing: Key strategy for risk management.
  • Example: $100 risk, $356 reward.

Leverage and Position Sizing

• Leverage: Use to amplify trading capital.
  • Example: $3,688 position can be controlled with $78 using 50x leverage on Femx.
  • Safety Check: Ensure stop loss is within liquidation level.

Self-Review and Improvement

• Trade Backtesting:
  • Tools: Trade position calculator and backtesting sheet.
  • Data Logging: Review and refine strategies based on logged trades.
  • Faster Learning: Use TradingView's bar replay to simulate trades.

Resource for Traders

• Backtesting Sheet:
  • Features: Logs trade details, computes stats for longs and shorts.
  • Utility: Identifies winning and losing patterns.

Community Feedback

• Success Stories:
  • Examples: Positive testimonials from private trading team members.

Conclusion

• Final Thoughts: Emphasize on the importance of a systematic approach.
• Call to Action: Engage with the provided resources and follow on social media.

Author: Fancy Joe

Note: The notes above summarize the key points and steps for restarting a day trading journey, focusing on avoiding common traps, understanding trading math, and leveraging tools and resources effectively.