Learn How to Day Trade Successfully

PREFER TO READ IT?

Full Transcript

Welcome to today’s lesson on how to day trade. And today, I am going to be focusing on how you could earn one hundred dollars more in less than 15 minutes of day trading. I know this sounds a little bit crazy and unrealistic, but once you understand how the market moves and how to day trade you’ll be amazed how it can be done, right?

It’s not an easy process. Don’t get me wrong, and it is a lot of work to do. As in studying and understanding what the market is. But it’s the same thing as when you learn how to speak a new language, right?

You practice words for a long time until it becomes a normal way of talking. Even with babies, right. They practice a lot until it becomes natural. At this point, watching the market for me is quite natural, right? I understand. Right away I get the gist of what’s happening and I’m always on the lookout for the higher probability traits.

So here is the breakdown of this particular trade. The trade is right here, which I’m going to go over in a little bit more detail. I don’t want to overwhelm you because this is a very beginner lesson so you can understand better how to day trade.

Learn How to Day Trade Successfully

But I do want to show you what we end up, what we learn, what you will learn. Once you start learning how to deal trade and actually all comes down to learning what the market is telling you, the different language of the market, which is The Indicators, The Patterns, The Movements.

OK, so we’re going to go back to the basics, which was part of the lingo class, the day trading lingo. And I’ve touched upon some of the vocabulary that we used often in the majority of that vocabulary is actually watching the market.

So let’s go here. This is pretty much an entire day. It’s worth this actually into the evening port, like the morning hours. And this is where the day really begins. I am on Central Time. I think we’re Mountain Time. I’m not sure I’m two hours behind Eastern New York City time. So seven thirty is actually nine thirty a.m., which is market open.

However, for day trading, you do want to look a little bit ahead, like a little bit behind.

Like it’s nice to see what’s been going on, but it’s not too important because we like to look at the overall movement that is happening right now. So as I mentioned before, the market runs in three ways.

We have a sideways market here and then it goes into a downtrend. Right. Saw three trends in trading. We don’t have an uptrend coming here at all. So we have a sideways trend and we have a downtrend now.

I also mentioned that there is areas at the market hits over and over and over again. These particular areas are very important to watch and they are not good to trade in because it’s so uncertain. So I mentioned that the market hits an area at the top several times in this case. It’s right here.

This is called a resistance area. And then the market hits an area at the bottom and that’s called a support area. So this would be like the ceiling area, right?

Which we call a ceiling. And this here is the support area, which we call a floor, and the overall movement here is a sideways trend.

Right. So when we’re seeing the sideways trend, we know, like I mentioned before, it’s not a good place to enter because in sideways markets, the.

Probability of it going where you wanted to go is really low. So you don’t wanna get in to the sideways market. I showed you before of that the resistance area was not the same place, a support ar

It could happen like that, does not have to be together in this case. It just is. Right. Because think of it like this. This is what we’re seeing when we’re looking at the live market. Right. We’re seeing an area here that is being what we call it, respect it, because it’s been he is being hit over and over again. Resistance areas are not precise. Right. So basically, we just want to go where the most amount of hits are happening, which is right here in the same year.

This is a support area. It’s an area where the market is constantly respecting and hitting over and over again.

Right. So when I see sideways movement, I sit back. I do not do anything right.

OK, so what I am seeing is that finally here I am seeing a definite break in the area.

You never want to speculate when the break is going to happen, even when there is strength showing in the market. You never, ever want to be oh, it’s going to happen here. I’m getting in. Never, ever. That is the curse of death. The kiss of death, I should say, for day trading.

You need to have confirmation. And now I am seeing the definite confirmation. The market has been going in a sideways movement for a long time. When we do the Bootcamp for day trading, I go over and break down the trends really well, because even though we’re seeing a trend, there are elements inside a trend that you understand how a trend works.

A trend never just runs down. That never happens. Right.

There will always be a run, a retracement, and a continuation. How far the continuation is? We don’t know. So in this case, I explain this again, much more in detail and a lot more about market movements in my beginners bootcamp for day trading.

So what I see and what I read, I am looking at a sideways market and seeing a break.

I use two indicators, right?

You’re seeing these lines. These lines are actually one sort of indicator for different timeframes. Right now I am on one chart and I just put these three different they are the moving averages and I use the Mac D.

Again, I go into this a lot more in the camp. I don’t want to overwhelm you. I just want to show you that it’s really simple to read. Once you know what you are reading, right. So here I am. This is the MACD’s. Show me strength in the market.

So the market is showing me that it’s running down and then it retraces, so the retracement is what I look for for my entry.

Just a good idea when you think of archery. Right. When you have a target when you want to shoot your bow into the bull’s eye. You need a place to stand, right. If you can’t just do it from wherever. And how to day trade. You need a place to take your trades.

There are many different systems. I’m going to show you mine right now. My system is this solid red line. This is where I stand for my trade entries. When it hits all of my green lights.

So this is definitely a big green light for me. Excuse me. So here we are. I’m just going to open it up a little bit more so we can focus on the trade. So I had this big run and then retracement. And this is where I entered. I entered with two contracts. It just gives me a little bit more money entry. So you could also see right here these little white boxes.

These are points. Here’s the price range and points. I’m not going to go into the future setups because that will just confuse you. But one point in futures is 50 dollars per one contract. So if I go in with two contracts, it’s two hundred dollars per point. So here I am. I answered right here and I automatically will have.

So I entered at this line. I automatically have a little bit more than a point as my risk and my first contract is the same amount of reward. Okay. Because I go in with two, I normally have a one to one with my first contract and a one to two with my second contract. So here it is. My first so what happens is when I was filled and this a little red arrow right here that’s showing you that I was filled there.

Now, with that, I actually came out with sixty two dollars and fifty cents because it’s a little bit more than one point. The second I get filled with one contract there, I automatically move my risk, which is right here.

I automatically move my risk.

To break even for my where I first entered because I still have one more contract to go, so I automatically put it here. Now, my second target and I mentioned before, you really need to have your targets in place because greed can get you. My second target is always around where the last pivot is, and that’s right here. So now I’m in another contract. So I have almost two points. It’s almost two points. It’s actually eighty seven dollars and fifty cents that this came out to be for my second target right here.

Where that second arrow is this entire trade. Took started at. Hang on one second. Let me show you the exact time. So right here I entered at 10:05 and I exit it.

My last one at ten twenty-four. This was a little bit longer than I usually like to be in, but my first target was out of 10:20. So it’s exactly 15 minutes after that after I moved my risk down, didn’t even care because there is absolutely no more risk even if it retraces and does not continue and goes back. Nothing to lose here. I already am sitting on sixty two dollars and fifty cent reward.

So this is what the market tells me. It’s showing me ok. You have been in a sideways area the whole time. The sellers, which means that they’re the ones that pushed the market to go into a downtrend have won over. Because what happens here?

It’s a battle between buyers. Buyers are the people that want the traders that want the market to go up. And the sellers are the traders that say the market is going to go down. So the sellers won. And like I said, the trend has components to it. And this year is the run.

This is a retracement of the first retracement. Usually is their best entry point is the strongest one. And then it’s usually a continuation. How far it goes. I don’t know. But the market usually comes back to where it once was, which was here. That’s why this is a safe exit point for me.

Once I got my first contract out, I moved my risk. I don’t have any more risk on the table and I just let it go to the last point here and that is one hundred and thirty seven dollars and fifty cents in fifteen minutes. This can happen over and over and over again. The market tells you what is happening.

Sure, there will be times when it’s going to tell you, OK, it’s going down and then it doesn’t go down and retraces but continues in the other direction.

But the probabilities of that are much lower. My trades right now. I focus on 70 percent when the average. When probability for trades, the average traders wins are usually around 55, 60, so 70 percent is really conservative because I don’t take as many trades either.

Now I have two contracts here, right? I’m not going to go too far into explaining what contracts are or what not. But the more contracts you have in the exact same trade, the higher the money you can have. Right. So if I went in with 10 contracts, I would probably be able to come out with around five hundred dollars, maybe even more.

Understanding the Market

I’m not going to do the math right now because it’s been broken up. But I just want you to understand. So yet once you get the way the market moves, understand how to day trade, and feel confident enough, you could go in with a higher position to give you a higher reward. Again, if you have a 70 percent probability rate with your trades, which is part of your trading plan and you have to have a trading plan when you start to trade live.

Think of it 70 percent. I mean, seven out of 10 trades are winners. That means you only lose three trades, right? Obviously, you’re going to be coming out with more profit than losses, but if you do not have your risk in place, the second you enter, you will lose everything because you don’t have a clue how far it will retrace. And here, this is a support area.

This market can very well go back here to a lower probability because of this strong run here. But I’m just letting you know that without the first component of your trading plan, which is having your risk management. Done. You can lose it all. So that is your number one thing to do. Number one thing in a trading plan is know how much you want to risk per trade.

As I mentioned before in the Boot Camp for Day Trading, I go over much more what the market really tells you. The market has many, many different, I guess, indications and patterns that tell you what it’s going to do. I do not want to confuse you right now of explaining them all. What I want to show you is how to day trade and how the market talks to you. And all you need to do is understand the language and you can trade.

As well.