7 Rules from Making $12,374,892 as a Day Trader

Summary

In this episode, a successful momentum day trader shares key strategies derived from over 24,000 trades, emphasizing disciplined trading practices. He outlines essential rules, including the best days and times to trade, the importance of focusing on stocks priced between $5 and $10, and simplifying technical analysis to avoid confusion. The trader highlights the necessity of adhering to personal trading rules to mitigate losses and stresses the value of tracking metrics to improve performance. Ultimately, he encourages traders to remain disciplined and continuously refine their strategies for sustained success.

Takeaways

• 😀 Focus on consistent weekly, monthly, and yearly profits by managing your trades throughout the week.
• 📈 Start trading conservatively on Mondays to build a cushion for the week ahead.
• ⏰ The best trading window is now between 8:00 a.m. and 10:00 a.m., with a focus on high-volume stocks.
• 💡 Identify your 'sweet spot' for trading, typically in stocks priced between $5 and $10 for optimal gains.
• 🚫 Limit the use of technical indicators; focus on the basics to avoid analysis paralysis.
• ✋ Stick to your trading rules; breaking them increases the risk of larger losses.
• 🔍 Only trade when there's a clear and obvious setup that meets your criteria.
• 📊 Track your trading metrics to identify successful patterns and areas for improvement.
• 🌱 Trading is a long-term journey; continuous learning and adaptation are key to success.
• 🚶‍♂️ Know when to walk away; securing profits early is often better than risking them later.

Q & A

What is the primary goal of the trader discussed in the video?

The primary goal is to finish each week, month, and year in the green, meaning to achieve consistent profits.

What strategy does the trader use on Mondays?

On Mondays, the trader eases into the market with a few trades to build a cushion for the week, typically producing smaller profits.

What are the optimal trading hours according to the trader?

The optimal trading hours are between 8:00 a.m. and 10:00 a.m., as this is when the market reacts most actively to news.

How does the trader determine when to walk away from trading for the day?

The trader walks away if they give back more than half of their profits for the day, ensuring they still leave with some gains.

What is the trader's 'sweet spot' for stock prices?

The sweet spot for trading stocks is generally between $5 and $10, although they may also trade stocks priced between $2 and $20.

Why does the trader suggest simplifying technical indicators?

The trader suggests simplifying indicators to avoid analysis paralysis and to focus on the most important aspects of trading, like candlestick patterns.

What happens when the trader breaks their trading rules?

When the trader breaks their rules, they have an 80% likelihood of losing twice as much as they would have if they had adhered to their rules.

What criteria does the trader use for stock selection?

The trader looks for stocks that are between $2 and $20, have news, high relative volume, are up at least 10%, and have a float under 20 million shares.

What is the importance of tracking trading metrics?

Tracking trading metrics is crucial for identifying profitable patterns and areas for improvement, helping the trader refine their strategies.

What is the overall perspective on trading expressed by the trader?

The trader views trading as a long-term endeavor that requires continuous learning, discipline, and a focus on data to achieve success.