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This is the beginning of your education. You need to study the markets, analyze charts, and learn the strategies professional traders are using every day. A day trader is two things, a hunter of volatility and a manager of risk. The act of day trading is simply buying shares of a stock with the intention of selling those shares for a profit within minutes or hours. In order to profit in such a short window of time day traders will typically look for volatile stocks.
This often means trading shares of companies that have just released news, reported earnings, or have another fundamental catalyst that is resulting in above average retail interest. The type of stocks a day trader will focus on are typically much different from what a long term investor would look for. Day traders acknowledge the high levels of risk associated with trading volatile markets and they mitigate those risks by holding positions for very short periods of time.
Trading on Margin is when you trade with borrowed money click here to details. This is considered leveraging your account. The risk of course is that he will make a mistake that will cost him everything. Unfortunately, this the fate of 9 out of 10 traders. The cause of these career ending mistakes is a failure to manage risk. Trading with Cash is an option, but because it requires 3 days for each trade to settle most traders will trade with a margin account but choose not to use leverage.
This is a risk management technique. Imagine a trader who has just taken 9 successful traders. This means each trade had the potential to double the risk which is a great 2: So many beginners fall into this habit of having many small winners then letting one huge loss wipe out all their progress.
We will discuss in detail how to identify stocks and find good trade opportunities, but first we will focus on developing your understanding of risk management. Over my years as a trader and as a trading coach I have worked with thousands of students. The majority of those students experienced a devastating loss at some point due to an avoidable mistake.
The money to trade on margin is easily available and the allure of quick profits can lead both new and seasoned traders to ignore commonly accepted rules of risk management. They cap their losses. They accept that each trade has a pre-determined level of risk and the adhere to the rules they set for that trade. This is part of a well defined trading strategy. The Momentum and Reversal trading strategies are the 1 and 2 best trading strategies out there.
These two day trading strategies are being used by thousands of our students who have participated in the Warrior Trading Day Trading Courses. In short, both of these strategies are going to give you the framework for what type of stocks to trade, what time of day to trade, how to find stocks to trade, how to set your stop loss to have a max risk, and how to find your entry based on traditional chart patterns including Bull Flags and Rubber Band Snap Backs.
Once you choose the one that is a good match for your skill level, your risk management tolerance, and the time of day you plan to trade, you are ready to get started. Make a plan to trade this strategy in a Simulated Trading account for 1 month to test your skills.
You also must maintain a profit loss ratio of at least 1: If you can achieve these statistics, then you are positioned well to trade live.
During the 1 month of practice, try to take 6 trades per day. Nobody wants to lose, but the best traders are great losers. They accept their losses with grace and move on to the next trade. They never allow one trade the ability to destroy their account or their career.
I personally focus on accepting small losses, and not letting them get me frustrated. Learning this characteristic will keep them in business as a day trader for a long time. Your most important objective will be to follow your Max Loss rules so you never have a loss that exceeds a predetermined amount. The most important skill you need to learn is to cap your losses.
Learning how to scale in and scale out of your day trades is a critical still every trader must develop. When I have winning trades, I scale out of the positions to take profits and adjust stops to break even as quickly as possible. I never hold a position that has achieved my profit target and hope for a bigger winner. The reason is because all too often the price can drop and you will end up giving up that profit.
This method of scaling out ensures small profits on all trades that move in your favor, giving you a better percentage of success. That would give you a 2: Again, with 6 trades and a 2: With the same percentage of success, if you can increase your profit loss ratio you will make a lot more money! Finish the day green, and do it again tomorrow. Over time accuracy will improve and you will find yourself hitting winners right out of the gates.
If you plan to succeed, you must follow your trading plan. That means ONLY taking trades that fall into your strategy. Sometimes beginner traders start to gain confidence and then venture outside the strategy that works the best.
This causes their accuracy to drop and profit loss ratios to go negative. Focus on short term goals! Before you know it you will have months of consistent trading under your belt.
For most students, once his or her accuracy has improved the next step is increasing positions sizes to maximize profits. Remember that your daily goal is 2x your max loss per trade.
I would encourage you to join a live webinar with me so you can learn even more about my trading strategies. You can click here to join my next webinar, and make sure in the meantime you keep watching on YouTube!
I put out tons of free content to help beginner traders getting started. In Response to these awards, Warrior trading has been constantly pu in the spotlight as being an established educator in the finance sector. If you really want to learn from the pros, I can say from experience that Warrior Trading offers top notch training from very skilled, highly disciplined and successful instructors.
I promise you there isn't a chat room out there that has this level of experienced traders interacting daily to help one another out , you just can't beat it. For people that are serious about their trading, Warrior Trading is the place to be. I'm a Veteran trader Finance Degree from OSU and always still learning books audible and purchased Warrior Trading Program so much new and useful information that I bought monthly chat to watch them apply principles they teach and to get some new fresh Ideas.
I have been trading off and on for over 15 years and full time for the past year and a half. The transparency of Warrior Trading is one aspect that attracted me to them. They show you it all. They show you their losses as well as their gains. They are about showing you how to make a profit from the markets.
Trading is hard, but warrior trading makes it easier. They keep a consistently friendly atmosphere, which you will find that after trading for a few years, you will appreciate. Traders like consistency, and when you log on to Warrior Trading you can expect the same service as the day before.
There are no surprises. These things are valuable. They quietly establish an edge, make their money, and leave until the next day. Ross and his team are good guys, and if you were to subscribe to all the different services out there and compare them for 3 months, you would see WT at the top of the list. I've always been passionate about trading but never really imagined this passion would have turned in a real, full-time job. In fact, I've never found any service which I really felt that would help me become a professional trader.
That is, until I met Warrior Trading. In particular, Ross has been really inspirational while I'm on my path to become a full-time day trader. I always wanted to trade stocks but I saw all those numbers go up and down and I would always say to myself " I'm never going to get this". I looked at the free Youtube videos and I was hooked. It was the best investment i ever made. Now I know how to day trade and the scare part about it is gone, I mean, I listened to them and paid for their paper trade and now i feel confident on what I'm doing with stocks.
I really mean this, I took time to write this because I really feel it in my heart that you guys are helping me accomplish my dream and that is to be a daytrader I learn so many ways to help me save money and make money. Ross helps you understand how the losses happen, the psychology behind it and how to prevent it!
I feel a lot more comfortable trading, because now I understand what stocks to pick, when to get in and out and how to manage my risk!! Day Trading Strategies for Beginners. Check out my Trading Statistics. Day Trading with Cash vs. Margin Trading on Margin is when you trade with borrowed money click here to details. Momentum Day Trading Strategy. Reversal Day Trading Strategy. One Students Success Story.More...