Best Trading Advice from the professional himself

Summary

The video emphasizes the importance of having a solid trading plan, focusing on price action or technical analysis before entering a trade. It stresses the necessity of using stop orders to protect profits and limit losses. Traders are advised to take profits early and use trailing stops to maximize gains. The speaker warns against revenge trading after losses, recommending that traders take a break after a series of unsuccessful trades. The key takeaways include never turning a winning trade into a loss and knowing when to step away from the market to avoid detrimental decisions.

Takeaways

• 📈 Have a clear plan before entering a trade, asking yourself why you're buying or shorting a stock.
• 📊 Base your trading decisions on price action or technical analysis.
• 🚫 Always use a stop order for every trade to manage risk effectively.
• 🔄 If a trade goes against you, stick to your stop order and move on to the next opportunity.
• 💰 Take profits when trades are successful by adjusting your stop order to break even.
• 📉 Use a trailing stop to maximize gains from winning trades while minimizing losses from losing trades.
• 🔌 If you experience three consecutive losing trades, consider turning off your trading platform for the day.
• 👎 Don't engage in revenge trading, as it can lead to significant losses.
• 💪 Remember that bad days and weeks are part of trading; avoid letting them affect your strategy.
• 🚀 Never allow a winning trade to turn into a losing trade by managing your trades wisely.

Q & A

What is the first step to take when becoming a day trader?

The first step is to have a clear plan before entering a trade. You should ask yourself why you are buying or shorting a stock.

What are the two main reasons for entering a trade?

The two main reasons are price action and technical analysis.

Why is it important to have a stop order?

Having a stop order ensures that you exit a trade if it goes against you, helping to limit losses.

What should you do if a trade becomes successful?

If a trade becomes successful, take profits while you can, and consider moving your stop order up to break even to avoid turning a winning trade into a losing one.

What is a trailing stop and why should it be used?

A trailing stop is a type of stop order that moves with the market price. It should be used to maximize profits on winning trades while minimizing losses on losing trades.

What should a trader do after three consecutive losing trades?

If a trader experiences three losing trades in a row, it's advised to turn off the trading machine and go home to avoid further losses.

What is 'revenge trading' and why is it risky?

Revenge trading is attempting to recover losses by making impulsive trades, which can lead to significant losses, such as turning a $4,000 profit into a $20,000 loss.

How can a trader prevent turning a winning day into a losing day?

To prevent this, a trader should stick to their plan, take profits when available, and avoid making emotional decisions after winning trades.

What is the significance of a mental stop versus a stop order?

A mental stop is less reliable than a stop order, as it can lead to indecision and emotional trading. A stop order is a commitment to exit a trade at a specific price.

What mindset should a trader adopt after a bad trading day?

A trader should view a bad day as a normal part of trading, maintain a positive mindset, and not engage in revenge trading to recover losses.