Day trading advice isn’t hard to find.
And that’s the problem. That’s what is holding you back.
If you are struggling to find your groove as a day trader, you don’t need another trading e-book or another Google search. You need structure. You need rules and criteria.
And then you need to make a commitment.
Real-World Day Trading Advice
You aren’t alone. Most traders go through this vicious circle of wanting more information. Wanting the day trading nugget that will turn you into a stock trading money-machine.
I feel your pain. I was there for a long time. Too long actually. I felt “close” for a few years. You don’t want to go there. It sucks.
You have yourself convinced that your trading success will turn around in a flash once you “get it.”
That’s not how it works. Just to be fair and completely honest. I was you. I own every trading book you can think of. Trading psychology books too.
None of them helped me become a better trader other than a basic grasp of technical analysis. None of them.
As a matter of fact reading too much made it worse. I kept thinking the next book would have the missing piece.
Stop reading book-after-book and stop looking in forums for the answer.
None of those people have your unique experience and resources.
Why Day Trading Advice from Me?
Good question. Very fair.
I have personally traded tens of millions of shares of stock. I have traded with the biggest, baddest proprietary traders in NYC.
But again, that is my experience. You don’t want that experience. You want the other lessons I have for you —>
For just over 12 years I managed and mentored close to 500 traders. Mostly newbies.
This distinction is important. If you aren’t making money. You are a newbie.
I have witnessed talented and smart men and women fail, in a slow unwinding of a perfectly funded trading account. Time-after-time, day traders would listen to advice, but never apply the lesson.
Why is the obvious question…
It’s because the advice was in direct contrast to their goals. They needed to make money quickly and with very little loss of capital. I have never witnessed this happen (post internet boom).
Most of these traders had a mental clock of time versus money. It was a race to make a living before their trading stake ran out.
That in itself wasn’t the problem. The problem was trading too big before you learn how to manage risk. Before you commit to an edge.
Even if you admit there is a learning curve, you have absolute control over the cost of that training period. Yet traders still traded too big relative to their track record.
It’s like signing a lease for a 10,000 square foot office but you don’t have any sales yet. Every business, and trading is a business, needs to have money factored in to learn how to run the business.
Give yourself a chance to learn. Keep your share size down until you can produce a track record. A P&L of at least 3 net profitable months in a row.
Best Day Trading Advice that Gets Immediate Results
- The best day trading advice is strategic. It’s not tactical. It’s edge over entry. The best entries are worthless in the wrong trade.
- Make a 3 month commitment to one strategy. One edge. It doesn’t matter if it’s moving averages or simple trends lines. Pick one and clearly outline the criteria (or back-test). I use trend lines on the weekly chart and moving averages on the daily chart. This is called multiple time-frame analysis.
- Pick a side. Force yourself to be a buyer or short-seller for the day and under no circumstances do you deviate when day trading. There will be days when it is tempting to short-sell a weak stock. Don’t. In the long-run it is a losing concept.
- Never justify a bad idea with fewer shares. It is still a bad idea. Strive to lose money on your best trading scenarios.
- Learn to be OK with doing very little or nothing some days. It’s not hard to make money when the stock market is obvious. It’s very easy to throw it away because you are bored.
- Start judging your strategy over a large sample of trades. Stop viewing your strategy on a trade-by-trade basis. The very definition of probability is “over many samples.”
- Start reviewing your trading skills on a trade-by-trade basis. Be brutally honest about whether or not you followed your plan.
- Have strict criteria that tell you when to be more aggressive. I use a top down approach: market analysis, sectors and then stocks. I also read market indicators sch as the breadth, $tick, $trin and $vix. Quite simply, every trade is not the same, there are better probabilities. The more that “lines up” the better the odds of follow-through. NOTE—> I said odds…you can have 3 aces in poker and still lose but betting more is the correct play.
- Know your trade management and trade expectation before the trade. This is easy when you have criteria for probabilities.
- Expect to trade poorly when you begin to trade bigger. The new risk levels need a new mindset. You are now out of your comfort zone. When this happens trust your strategy and skills.
- Learn how to craft a daily game plan. Go the market with a list. Don’t look for ideas after the market opens. This is an area that can dramatically improve your trading, sometimes over night. Be completely OK with letting everything else go.
- Always have stocks ready to go if the market direction changes. If the market was strong and is now trading weak, go to your list of weak stocks. Do not short-sell the strong ones.
- After you assess probability, determine of the profit potential is worth the risk you need to accept. Never take one-to-one trades. This makes you a break-even trader- “Marc Sperling”
- If you don’t have a profit target on the charts, use average true range for a potential exit. (Or at least as a guide to set trailing stops)
- Keep your technical analysis and candlestick analysis simple, but make it definite.
- Keep a trading journal both during the day and especially right at the close. Make the focus of your entries on; the quality of your game plan and how well you followed your plan. The results are secondary to the process. If you are losing money do your best to determine if it’s you, your edge or a tough market. There are many days I trade well and lose money. Remember that, there isn;t always a “reason” you lost money. Sometimes you just don’t get follow-through.
- Track your losing days and expenses over a 3 month period. Then divide by 3. This will give you your monthly break-even # to run your business.
- Seek out a mentor to talk strategy. Entries are not that complicate. Focus your talks on edge. Learn good entries, but don’t obsess. You only need one entry signal. Pick one.
- If the tape doesn’t make sense, stay in cash.
Final Day Trading Advice
Trading success is a gradual progression-if you pay attention.
The biggest hurdle you will face is time. Time to learn. Time to run out of money. Time to need money. Time to allow your probabilities to work. Time to tweak your system so you get a solid edge.
Never ask “why didn’t that trade make money?” This is the wrong question. It shows you are time crunched or lacking a strategy. The sooner you get your edge, the sooner you can get to trading it.
Ask me if it was good idea; then we can break the trade down. If it was, then we can discuss and review your trade management.
Your path to profitable six-figure trading is at your finger-tips. Conquer the time obstacles and and ask the right questions. Trade small until you learn and the time crunch never becomes an issue.