Day Trading was Hard, until I Found this SECRET
Summary
TLDRThis video shares seven crucial lessons learned over five years of day trading, transforming from a consistent loser to a profitable trader risking up to $1,000 per trade. Key insights include focusing on market inflection points rather than just following trends, understanding the significance of support and resistance levels, and recognizing fake-outs. The speaker emphasizes the importance of having a plan, trading with an edge, and maintaining a consistent routine. Additionally, the video highlights the benefits of trading futures and provides resources for further learning, including a free guide on reversal patterns.
Takeaways
- 📈 Start Small: Begin trading with a small amount and gradually increase risk as you gain experience.
- 🔍 Find Your Edge: Look for inflection points in the market where trends change direction to identify potential trading opportunities.
- 🏁 Risk-Reward Ratio: Aim for trades with a favorable risk-reward ratio, risking a small amount for a potentially larger return.
- 📊 Support and Resistance: Utilize key support or resistance levels to identify potential shifts in market direction.
- 🚀 Breakouts and Pullbacks: Recognize breakouts as potential inflection points, but be cautious and wait for a pullback to confirm the trend.
- 🕒 Market Timing: Be aware of specific times in the market day that can present opportunities, such as the first 30 minutes after the market opens.
- 📉 Watch for Fakeouts: Be cautious of fake breakouts which can signal a reversal in the market direction.
- 📈 Market Modes: Understand that the market has periods of high and low volatility, and trade accordingly.
- 📊 Candlestick Patterns: Learn to read candlestick charts to interpret pure price movement without the need for indicators.
- 🌐 Futures Trading: Consider trading futures for greater flexibility and leverage, which can be advantageous for smaller accounts.
- 📝 Have a Plan: Develop a consistent trading plan and stick to it, focusing on specific strategies rather than reacting to every market movement.
Q & A
What is the main focus of the video script?
-The video script focuses on the speaker's journey and learnings in day trading, emphasizing the importance of finding an edge in the market, particularly at inflection points, and sharing key lessons to help viewers avoid common pitfalls.
What does the speaker suggest is the most effective way to make money in trading?
-The speaker suggests that the most effective way to make money in trading is by identifying inflection points in the market where there is a change in direction or mode, and capitalizing on these points for potentially high profit trades.
What is an 'inflection point' in trading as described by the speaker?
-An 'inflection point' in trading, as described by the speaker, is a moment when the market changes direction or mode, such as shifting from a sideways trend to an upward or downward trend, indicating a potential edge in the market.
Why does the speaker advise against simply buying into an uptrend?
-The speaker advises against simply buying into an uptrend because it lacks an edge; the market could reverse at any time, and there is no certainty that the trend will continue higher.
Outlines
📈 Finding Trading Edges at Market Inflection Points
The speaker shares their journey from losing money to making consistent profits in day trading. They emphasize the importance of identifying inflection points in the market where trends change direction, as these points offer a trading edge. The speaker explains that simply following the trend is not enough and that traders should look for opportunities where the market is shifting from one trend to another. They also discuss the potential for high profit margins by entering trades at these points, as the market imbalances can lead to favorable risk-reward ratios.
🚀 Understanding Breakouts and Fakeouts in Trading
This paragraph delves into the concept of breakouts and the potential for inflection points when resistance levels are breached. The speaker mentions that while breakouts can signal new trends, they are not always reliable indicators of continued movement in the same direction. They introduce the idea of 'fake outs,' which are deceptive breakouts that can lead to reversals. The speaker also discusses the importance of recognizing when the market is moving too quickly, as this can indicate a lack of support levels and a potential for a rapid reversal back to the starting point of a trend.
🔍 Recognizing Market Modes and Trading Timing
The speaker discusses the concept of market modes, explaining that there are times when the market is more conducive to trading due to better risk-reward opportunities. They highlight the importance of distinguishing between days with significant movement and those with minimal action. The speaker also introduces the idea of timing in the market, particularly focusing on the first 30 minutes after the market opens as a critical period when major market shifts can occur. They share personal experiences and observations, suggesting that this timing can be a consistent indicator of potential trading opportunities.
💡 Transitioning to Futures Trading for Flexibility and Leverage
The speaker shares their personal transition from trading stocks, options, and Forex to focusing on futures trading. They highlight the benefits of futures, such as the ability to start with a smaller amount of capital and the high leverage available. The speaker also discusses how this transition allowed them to focus on reversal opportunities and capture significant market moves with a smaller risk. They mention the growing trend towards futures trading and offer to provide more in-depth information on how futures work for interested traders.
⏰ Establishing a Consistent Trading Routine and Strategy
In this paragraph, the speaker emphasizes the importance of having a consistent trading routine and sticking to a single strategy. They discuss the pitfalls of trying to capture every market move and the dangers of being overly reactionary. The speaker shares their experience of narrowing their focus to reversals during a specific time window each day, which has led to profitability. They stress the importance of having a plan and waiting for the market to present opportunities that fit this plan, rather than chasing the market and attempting to trade on every fluctuation.
🎯 The Importance of Focusing on Quality Trades Over Quantity
The speaker concludes by reinforcing the idea that successful day trading does not require a high volume of trades. They argue against the notion that day trading means making money every day or taking a trade every day. Instead, they advocate for a patient approach, waiting for the right opportunities that align with a well-defined strategy. The speaker shares their personal strategy for growth, which involves risking a small amount per trade and capturing larger profits when the market presents the right conditions. They offer a free guide with their favorite reversal patterns and encourage traders to adopt a disciplined approach to trading.
Mindmap
Keywords
💡Day Trading
💡Risk Management
💡Inflection Points
💡Support and Resistance
💡Breakouts
💡Candlesticks
💡Fake Outs
💡Market Modes
💡Timing
💡Futures Trading
💡Consistent Routine
Highlights
The importance of finding an edge in the market, particularly at inflection points where the market changes direction.
The challenge of making profits by simply following an uptrend, and the need for a more strategic approach.
The concept of inflection points as areas where the market changes direction or mode, offering potential for higher profits.
The advantage of trading at inflection points for a better risk-reward ratio.
The strategy of waiting for the market to reach key support or resistance levels for potential shifts.
Transcripts
day trading can be overwhelming and
really complicated when you first start
out and so I want to walk you through
the seven reasons that took me from
risking a small amount not making money
losing money consistently to now making
consistent money risking almost ,000 per
trade it took me about 5 years to kind
of figure out trading and so I want to
help save you that time and money lost
with these key lessons that I learned
and towards the end I'm going to share
with you something that I've only
recently really discovered that has
started to Skyrocket by trading now the
first thing you often learn when trading
is you hear that the trend is your
friend and you should always be trading
in the direction of the trend so if you
see an uptrend you should probably be
buying because the trend will continue
higher now what I realized is instead
the way to actually make money trading
is you need to find an edge in the
market and the most of the time where I
found that edge is actually in
inflection points and what I mean by
this is you want to be finding out where
the market is changing anytime the
market is changing directions or modes
that is an inflection point anytime you
see the market go from a sideways Trend
to a downwards Trend or to a sideways
Trend to an upwards Trend these are
inflection points and where there is an
actual Edge in the market you do not
have an Edge in the market just buying
in an uptrend thinking that it's going
to keep going higher because you don't
know when that market is going to
reverse on you now you totally can make
money catching swings for a while but
what I've realized is that's really hard
to actually profitably do and instead
looking for where those potential
inflection points are in the market is
going to make you way more money because
a lot of the time you can jump in on a
trade get out for a potentially High
profit because there is a turning point
happening in the market which means
there's an imbalance in the market and
so it makes it so the risk versus reward
ratio is in your favor to where a lot of
the times you can risk something like
let's say $100 and you can make3 or $400
in return you're getting a three times
or four times return and so this is the
way to make money trading is is learning
how to spot where these areas are so the
best way to take advantage of these
inflection points is waiting for the
market to come down to a key area of
support or resistance or supply and
demand and waiting for that shift to
change because that's where there is a
good Edge in the market of a potential
for that really good risk reward ratio
where you can get in in this trade I'm
risking about $600 and then over the
course of this trade I make close to
$3,000 and so that's where the risk
reward really comes into play and allows
you to have an edge in the market and
make money over time because that's what
trading is all about because that's the
only thing we're trying to do when it
comes to trading is make money and
finding where those inflection points
are is how you want to do it now another
type of inflection point is breakouts
now I don't personally trade these and
I'll talk more about why later but if
you have something like a resistance
level here you can see the Market's
bounced up here a couple of times and
it's eventually going to come up here
and break it now what happens when it
does this is it can be a potential
inflection point where the market or
whatever stock or chart you're trading
comes up to this level and the
resistance area fails and it breaks out
the better ways to trade these is
generally making waiting for it to come
back and test the level you'll often
hear this called a breakout pullback
where it kind of breaks out comes back
and shoots up and that's where the big
Trend play can be made and so that's
where you can see there's clearly an
inflection point here and that's another
way you can make money trading but the
key here is you are focusing on that as
a key level once you see the market kind
of break out here there's no place to
get in a lot of the times a big mistake
I did a lot of the time and I see people
do as I've started to teach this stuff
is that they will see this inflection
point miss this initial entry and then
they'll try and get in somewhere up here
now you can see if you got in anywhere
in this trend in this case you would
have made money because it kept going up
but you don't know where you are in the
trend when the Market's trading right
here right here you don't know if it's
going to go up or down it could go
either way and that's where focusing on
these inflection points gives you that
edge because the risk vers reward is way
more in your favor right here you have
the potential for the market to go up a
lot or right here you have the potential
for the market to break and keep going
lower like it has done in the past now
one thing about breakout trades which I
want you to think about is just because
you see the market break out does not
mean it's going to now continue higher
in a massive way like over here as the
market moved up here came into a
sideways range broke higher made that
pullback and it kept going higher so as
we go forwards we can see the market
kind of does that again where it makes a
nice move up now it's going into a
sideways range for a few days we're
actually looking at a 5 minute chart
right now and so you would assume okay
we've broke up here I'm going to wait
for it to pull back to the previous
highs wait for that breakout pullback
and then buy it and so you can see that
that actually worked pretty nicely to
make new highs right here but that
doesn't necessarily mean you can now bet
that okay well it's going to just make
another massive move up what the market
will do sometimes and this when I say
Market I mean any chart you're looking
at that's something I realized too is if
you can learn to read candlesticks you
do not need any indicators and you can
just apply it to any chart or Market
there is because candlesticks just
reflect that pure of price movement and
price always tells you what you want to
know about the market and so what
happens here is what I like to call a
fake out sometimes you can have
breakouts and you can also have fake
outs and so this is something I actually
realize as well throughout my trading is
when you see a fake out it's actually an
amazing signal of a reversal because
just like we talked about if you think
about it you have these people over here
that are looking for this exact thing
again and so they come up here they see
the market do this you know you think
well we could be right here and I could
expect the market to make a massive move
up and so they buy and you know the
trade let's say you get in here trades
looking good for a little while and then
all of a sudden Boom the market just
reverses and so all those people are now
trapped and they have to get out of
their trade and so it pushes the market
lower and you have people like me
looking for this trap to happen because
it's pretty clear it it works a lot I
would say this is the biggest signal I
found for reversals is these fake outs
and then it just makes a massive push
lower and it actually goes down to the
previous level right here that's
something else I've actually realized
over time too is if you see a move like
this and it kind of goes like this if
the market makes a very fast-paced Trend
and it starts to give that back up it'll
generally give that back up as a really
good Target is where it initially
started of where that Trend up started
and so once this trend starts going down
and starts breaking through this support
here I pretty confidently look at the
chart and say yeah we are going down to
here because there is air between here
and there there's no clean support
levels because when the market moves so
rapidly it doesn't have time to be in a
healthy Trend and essentially stair step
and make support levels as it goes up
when it just kind of moves up in one
direction it'll often if it starts to
give it back up it'll just move down in
One Direction too as well
and so you can see that's what happens
here it starts to move down SS around a
little bit and then just pukes lower now
as well something that took me years to
figure out and it still might take you
months to figure out and really learn is
the market has modes is looking and
zooming out here is the market has times
where it's really good to trade and
there is really good risk reward
potential and it has times where it just
kind of sucks and so you know you can
see right here on this day capturing a
kind of move like this that has insane
good risk reward ratio versus something
like this over here you can see this is
a really small move and there's a lot
worse risk W ratio in terms of this move
down a day like this you don't have as
good risk to reward ratio versus this
day like over here where you can get in
somewhere here and you can make a
massive potential trade and so the
hardest part is learning how to decipher
between days where the market is just
chopping around not doing much you can
see this day right here is the market
was just kind of sitting around really
not doing much and the way to really
look at that is look at the Candlestick
is you can see that they are just
stacking on top of each other there's no
actual movement back and forth and so
even though the price here you can see
is at a key resistance Zone it
definitely can tell you though that
there is just not much potential
movement in the market and same with
kind of a day like this where you know
the the price here it broke up and then
just kind of sat there for a long time
and then eventually kind of sold off but
it still kind of just sat there and so
you can see here that rule kind of
Applied again in terms of the market
kind of made a big Trend up here kind of
sat there for a while and then once it
started to give that back up it gave it
back very quickly it started to find
support there at that low area again and
so that's something really pay attention
to cuz you can see that applies a lot
you can see it basically happened right
here as well is shot up came back to
that area found some support and so how
you decipher between kind of volatile
days where there's good Movement Like
This Day great movement and days where
it doesn't have good movement can be
challenging and so this is where kind of
experience comes into play but knowing
how to deal with that is really
important and so probably the biggest
thing that took me years of just
watching charts to realize was a timing
in market and so this is mainly focused
on the S&P 500 or the NASDAQ or the Dow
Jones you know mainly the key us indexes
is that there is a timing 30 minutes
after the market open and so to show you
what I mean let's look at a NASDAQ chart
on a one minute and so I am on the west
coast of the US and so the market
actually opens at 6:30 for me versus the
normal 930 standard new New York Stock
Exchange time and so 30 minutes after
the open is 7:00 for me and so what I've
realized at this time is this is when
the big money comes into the market and
will cause the market to shift in a big
way a lot of the time the first 30
minutes of the market it's kind of
figuring out what it wants to do there's
potentially news going on and so the big
Banks or whatever you know I don't
really know what goes on in those places
but this is their timing for potentially
starting to move the market and what I
often see happens and again it doesn't
really matter why it happens all that
matters that it does happen and so you
can see at 7:00 the market has sold off
and now it's start it's reversing and
that's my biggest thing I've realized is
it basically this is an inflection point
in the market it's where there is a
potential Edge to happen and so on this
day Market comes down pretty much around
7 you know it doesn't have to be exactly
at 7 you know of course there's some
wiggle room in this it's not exactly at
7 but I like to think about you know 10
minutes before 10 minutes after
something like that in this area it's
going to potentially have a bounce if it
sells off into that area and so this is
one example if I actually just scroll
back to the previous day and we look at
the market opening here at 6:00 you know
the market Rockets right at the open and
then actually sells off comes into our
7:00 window finds some kind of support
in this area and then you this one kind
of takes a little while to get going but
it's pretty much finding that support at
7:00 and then you can see from there it
just massive uptrend for the day and so
that's kind of where it's okay it's
solidifying it's finding its Trend that
it wants to do and you could have easily
come in here and put in an order here
put your stop loss below kind of this
area and captured a massive potential
move as the market moved up in this
direction sadly I wasn't trading on this
day I just don't trade Mondays and so
that's that's a rough opportunity Miss
and then another one is if we just go
back to the previous day again this is
kind of showing you how consistent this
can be is again here 6:30 Market kind of
opens it's kind of choppy and then 7:00
boom it opens up pushes the highs and
then starts a trend from there and so
this one isn't that great I would say
because you can see again the Market's
kind of choppy and so going back to that
rule of knowing okay when's the
volatility that's you know volatility
gives you good risk reward gives you
that edge and here you know there's just
not really that much volatility there is
there is volatility back and forth but
quite often when I see that I think well
okay it's choppy it's it's just kind of
moving back and forth so it's more
likely to keep doing this I always find
that the market is more likely to
continue what it's doing and so if
you're ever not sure about a read or
what the Market's doing just think about
it's likely to repeat what it was doing
I don't know percentage you know I've
heard 80% sometimes thrown out there but
you know that's that's just kind of a
random number but again versus this one
over here you can see there that boom
there's volatility in this market way
more and so then it comes down here it
does sit here to chop for a little while
but you can see that it's had this type
of movement recently in the day which
gives it more likelihood for it to
happen again and so what all this has
done for me is it has narrowed my focus
trading now one thing that really helped
with my trading was switching to two
Futures and so this is a trade from
years ago of me starting a smaller
account with a smaller account of
trading Futures now I used to trade
stocks I used to I tried to trade
options even some Forex and I realized
that trading Futures allowed you to
start with way smaller amount and then
allowed you to have a lot more
flexibility as well and the Leverage is
honestly insane I think it's somewhere
like 450 times it might even be 500
times leverage it goes up as the market
goes up in price and so it allowed me to
start looking for these you know
reversal opportunities where I jump in
and a trade here and then I capture a
massive move down and you can see here
I'm up $770 in this trade and in this
one trade I think I was risking about
$150 and so this is a massive win for my
you know smaller account that I was
starting with at the time and so I would
highly suggest looking into trading
Futures if you haven't
because it's been super helpful for me
and I've actually realized there's a
massive Trend shifting towards them I
think as people realize how much more
beneficial they are so I have a video
that I'll link that goes way more in
depth to talking about Futures and
explaining how they work if you want to
check that out and so switching to
Futures were really really helpful and
so what figuring out this 7 Minute
timing also did for me is allowed me to
really narrow my focus the biggest
mistake I see so many new Traders do and
I did myself was going into the market
and being reactionary and saying you
know watching the market play out and
seeing you know oh wow the Market's
shooting up let me buy here you know I
got to get in on this move look how fast
it's going and you know you're trying to
essentially capture every move and so
you know again if you if you jumped in
right there you know you you bought in
right at the top and then now you're
seeing it go down okay I got to get in
this is this is reversing and then the
market sits there right and so it's
having five different strategies you're
trying to do or five different patterns
you're trying to trade and essentially
trying to capture out on every move it
is not about capturing every move in the
market you don't need to be trading
breakouts reversals continuation trades
scalping for smaller things and then
swing trading on a larger time frame
that honestly kept me stuck in a cycle
of losing for 5 years straight because I
wasn't focusing on one specific thing
and in instead starting to just focus on
okay I come in every day open my charts
look at a larger time frame and see okay
where are the big ranges in the market
today looks like we have a big
resistance level up here big support
level down here and then going into a
smaller time frame chart and looking for
a reversal at that timing window of 7:00
and so this doesn't happen every day but
when it does I I'm there and I'm able to
capture on that move so instead of
following what the Market's doing and
trying to chase what the Market's doing
I'm sitting and I'm waiting for the
market to essentially come to me I have
a plan and then when it does that I'm
able to execute and take advantage of
that plan and the move that it
potentially has you want to go into
trading with that plan in mind because
otherwise you're just going to be
chasing your own tail and it's not going
to work out in the long run you might
have wins here or there because again at
the end of the day there's some luck
involved it's trading you know you can
always make money in the short term you
know a lot of the ways it's like
gambling right you can always go into
the casino and make money in a day or
two or even a week but over the long run
the casino is going to win every time
because they have a plan and they
consistently execute it the same way
every time that's what you want to think
about like with trading and so the
biggest thing that made me profitable
was narrowing my focus and focusing on
just reversals and so I actually have a
14-page free guide you can get that has
all my favorite reversal patterns in it
you can get that in the link of this
video and so I've been trading this
strategy for years and through this
strategy I was able to start with a
really small account risking something
like $100 per trade you can even start
smaller if you want you could probably
risk $20 per trade at the smallest size
and then you know capturing moves like
this where you're risking a smaller
amount and capturing a larger amount
where I'm getting about $300 on a win
here and so that's about three times my
risk and you're able to get in and be
able to have a plan and consistently be
taking profits out of this you can see
this trade is from 2022 and check this
out 7:00 there is a reversal happening
I'm telling you this has it's there it
happened consistently and you're able to
take advantage of it and now over time
you know I'm risking way larger amounts
you can see again this is another trade
way more recent 2024 again 7:00 I'm
looking for a reversal to happen so it's
allowed me to grow that account and the
thing is what you want to realize is
when it comes to trading you do not need
to be taking 10 trades a day probably
the biggest thing that loses people
money trading is falling into that trap
of day trading and realizing that you do
not need to be making 50 trades a day to
be making money day trading day trading
doesn't mean you're making money every
day it doesn't mean you're taking a
trade every day day trading just means
you're taking a trade on a really small
time frame entering in on that day and
getting out on the same day when it
comes to finding that edge in the market
that edge is going to be found only so
often and when you're trading properly
you're sitting there and waiting for the
market to come to you to find that
opport opportunity you're not trying to
capture every move and make money every
day if you try and make money every day
you're going to be forcing trades on bad
trading days and you don't want to be
doing that you want to be taking trades
only when it fits your plan because you
know I've tried it where you try and
have different plans for different types
of trading days or different modes the
markets in you know have a reversal
strategy have a breakout strategy and
I've realized that you know what just
keep it simple stick to one Str strategy
and wait for the market to come to you
take action when it does and if it
doesn't be done for the day and so
that's why I've started to do this kind
of trade where I I really only show up
for an hour in the morning once I you
know I I start watching the market
around 6:30 but I then take a trade you
know a reversal trade and then once that
happens I'm done trading for the day
because again that opportunity is around
that 7:00 time and so I only trade for
60 to 90 minutes minutes and then move
on with my day and so that's the biggest
thing that's helped me really become way
better at this is having that consistent
routine that you just do every day
trading almost really repetitive and
boring because at the end of the day
that's what makes money trading it's not
here to make you have you know an
adrenaline rush or anything it's here to
make you money and so if you want to
learn the strategy that I've been using
to start to grow an account and you know
start to be taking massive trades like
you can see here check out this video
right here I go into a full step process
on how to start with an account risking
as little as $50 to growing and having a
growth process and steps to increase
your account size and increase your
trading risk size and as well as a
five-step checklist that you really need
to follow to confirm reversals at the
7:00 time and you can't be jumping in to
this timing randomly thinking that it
will reverse because that's just a
really good way to lose your money
consistently
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