What do you think?
Rate this book
Advanced Techniques in Day Trading: A Practical Guide to High Probability Strategies and Methods
This well-thought-out training regimen begins with an in-depth look at the necessary tools of the trade including your scanner, software and platform; and then moves to practical advice on subjects such as how to find the right stocks to trade, how to define support and resistance levels, and how to best manage your trades in the stress of the moment. An extensive review of proven trading strategies follows, all amply illustrated with real examples from recent trades. Risk management is addressed including tips on how to determine proper entry, profit targets and stop losses. Lastly, to bring it all together, there's a "behind the scenes" look at the author's thought process as he walks you through a number of trades. While aimed at the reader with some exposure to day trading, the novice trader will also find much useful information, easily explained, on the pages within. In this book, you'll learn... - How to start day trading as a business - How to day trade stocks, not gamble on them - How to choose a direct access broker, and required tools and platforms - How to plan important day trading strategies - How to execute each trading strategies in detail: entry, exit, stop loss - How to manage the trading plan
420 pages, Paperback
First published July 28, 2016
3749 people are currently reading
6697 people want to read
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 30 of 341 reviews
September 23, 2018
I’m more experienced with position and swing trading. Before reading this book, I’d done some day trading on my own, with mixed success, but hadn’t really thought of trying to make a living from it. Yet, there are people in the trading group I belong to who do just that. They look for the stocks that are getting the most attention in the pre-market (sometimes ones that no sane person would buy and hold in any great quantity -- see recent insanity in marijuana stocks), watch them carefully at the open, then spend the day’s session getting in and out of positions, sometimes making hundreds or thousands of dollars a day. It’s not a profession without some bad days, but for people who know what they’re doing, the good days seem to outnumber them. And boy oh boy, does the idea of not holding positions overnight sound appealing.
Of course, “knowing what you’re doing” is the big asterisk here. If you don’t know what you’re doing, then you’re essentially just some random schmuck(-ette) trying to play a full-contact sport on a field full of well-drilled professionals who have no compunctions against body-checking you into the mud. That’s the metaphor that Andrew Aziz, the author of this book, uses and, in my experience, it’s an apt one. Trading is hard and really does require the discipline, focus, and nerve of a career athlete. The learning curve is very steep. I suspect that for every day trading millionaire, there’s at least one person that gambles away everything and swallows a gun.
You can find lots of “stock gurus” plying you with expensive courses that promise can’t-fail formulas for pulling riches from the markets, but if it were that easy, a computer could do it, dontcha think? This is a short, no-frills, no-bullshit book that, for a lot less money, promises you that you *might* be able to make it as a day trader, if you have the right basic makeup as a person, as well as the time and capital that it takes to put in a good six months of practice sessions in front of a screen. If you don’t, Aziz states, well, tough luck, this isn’t for you. I figured I’d include that “spoiler”, to save you the expense of buying this book if you don’t meet that criteria. Also, I’d add that you probably shouldn’t day trade with less than $50k (US) of capital that you don’t need for anything else, the first $25k of which is required in order to not be handcuffed by the PDT rule (Aziz, a Canadian resident, isn’t subject to it).
Anyway, most of the advice here, as measured in page count, focuses on setting the right expectations and attitude. Everything he says in terms of the broad picture, I can confirm. Yes, you need to treat trading like a job, not a hobby, and get up early in the morning. Yes, it’s strongly recommended that you have an exercise routine. Yes, you’re going to do stupid things sometimes, even though you know better. And, most importantly (I think), you need a community of fellow traders. Without “teammates”, even ones in a chat room, you’ll miss a lot of opportunities and insights. And you’ll go completely nuts.
The core of the book covers, at a pretty brisk pace, the essential tools, techniques, strategies, and best practices. Aziz discusses the psychology of the markets, the concept of “stocks in play” (those that traders are converging on, often over some piece of news or an earnings report), and the reality of an environment in which computers are doing a lot of the trading. He goes into charting, trendlines, candlesticks, key indicators (I agree that the VWAP is essential), and significant chart patterns. He provides a quick overview of about ten popular strategies (e.g. ABCD patterns, Bull Flag, Reversal, Moving Average, ORB) and some thoughts on when each makes sense. He emphasizes (correctly) that the strategies aren't algorithms, but are more like chess strategies, football plays, or military tactics -- you have to have the gut sense for which is appropriate to a given situation and there's no way to develop that except through practice. He offers some good tips on how to prepare a trading plan in the morning, with contingencies based on the stock’s initial moves.
I felt that the book could have covered certain topics in a little more depth. Aziz mentions using stock scanners, but says very little about how he configures his. That was a bit annoying. He repeatedly emphasizes that swing trading and day trading are different, therefore he doesn’t need to discuss the former, but my experience tells me that monitoring stock for swing trade setups often leads to day trade opportunities (e.g. a stock that has a sharp bounce day after a crash day, or a trending stock that pulls back to test support before going higher)
All in all, a very helpful book for me, but I wouldn’t call it a “For Dummies”-type guide. Readers don’t know very much about stocks in general or who want a lot of hand-holding might be better served by a title from that line. This is more of a guide for self-starters who have already investigated day trading, but need someone more experienced to put the pieces together for them. A few light bulbs will probably go on. Some readers have complained that Aziz promotes his own chat room, but since he strongly recommends signing up for *a* chat room (for good reason, IMO), that didn’t seem out of line to me.
This is subject matter that doesn’t necessarily lend itself to an audiobook, but I was familiar with most of the terminology and the writing is clear enough that nothing was hard for me to visualize. The diagrams are all available here -- indeed, previewing them might tell you if this is the book you want.
PS. If you want to see a bunch of videos of experienced day traders doing their thing, search youtube for:
Connor Pollifrone, the Boiler Room
Mark the Meerkat, Grok Trades
You’ll notice that they often don’t hold positions for more than a few minutes, sometimes even mere seconds.
Of course, “knowing what you’re doing” is the big asterisk here. If you don’t know what you’re doing, then you’re essentially just some random schmuck(-ette) trying to play a full-contact sport on a field full of well-drilled professionals who have no compunctions against body-checking you into the mud. That’s the metaphor that Andrew Aziz, the author of this book, uses and, in my experience, it’s an apt one. Trading is hard and really does require the discipline, focus, and nerve of a career athlete. The learning curve is very steep. I suspect that for every day trading millionaire, there’s at least one person that gambles away everything and swallows a gun.
You can find lots of “stock gurus” plying you with expensive courses that promise can’t-fail formulas for pulling riches from the markets, but if it were that easy, a computer could do it, dontcha think? This is a short, no-frills, no-bullshit book that, for a lot less money, promises you that you *might* be able to make it as a day trader, if you have the right basic makeup as a person, as well as the time and capital that it takes to put in a good six months of practice sessions in front of a screen. If you don’t, Aziz states, well, tough luck, this isn’t for you. I figured I’d include that “spoiler”, to save you the expense of buying this book if you don’t meet that criteria. Also, I’d add that you probably shouldn’t day trade with less than $50k (US) of capital that you don’t need for anything else, the first $25k of which is required in order to not be handcuffed by the PDT rule (Aziz, a Canadian resident, isn’t subject to it).
Anyway, most of the advice here, as measured in page count, focuses on setting the right expectations and attitude. Everything he says in terms of the broad picture, I can confirm. Yes, you need to treat trading like a job, not a hobby, and get up early in the morning. Yes, it’s strongly recommended that you have an exercise routine. Yes, you’re going to do stupid things sometimes, even though you know better. And, most importantly (I think), you need a community of fellow traders. Without “teammates”, even ones in a chat room, you’ll miss a lot of opportunities and insights. And you’ll go completely nuts.
The core of the book covers, at a pretty brisk pace, the essential tools, techniques, strategies, and best practices. Aziz discusses the psychology of the markets, the concept of “stocks in play” (those that traders are converging on, often over some piece of news or an earnings report), and the reality of an environment in which computers are doing a lot of the trading. He goes into charting, trendlines, candlesticks, key indicators (I agree that the VWAP is essential), and significant chart patterns. He provides a quick overview of about ten popular strategies (e.g. ABCD patterns, Bull Flag, Reversal, Moving Average, ORB) and some thoughts on when each makes sense. He emphasizes (correctly) that the strategies aren't algorithms, but are more like chess strategies, football plays, or military tactics -- you have to have the gut sense for which is appropriate to a given situation and there's no way to develop that except through practice. He offers some good tips on how to prepare a trading plan in the morning, with contingencies based on the stock’s initial moves.
I felt that the book could have covered certain topics in a little more depth. Aziz mentions using stock scanners, but says very little about how he configures his. That was a bit annoying. He repeatedly emphasizes that swing trading and day trading are different, therefore he doesn’t need to discuss the former, but my experience tells me that monitoring stock for swing trade setups often leads to day trade opportunities (e.g. a stock that has a sharp bounce day after a crash day, or a trending stock that pulls back to test support before going higher)
All in all, a very helpful book for me, but I wouldn’t call it a “For Dummies”-type guide. Readers don’t know very much about stocks in general or who want a lot of hand-holding might be better served by a title from that line. This is more of a guide for self-starters who have already investigated day trading, but need someone more experienced to put the pieces together for them. A few light bulbs will probably go on. Some readers have complained that Aziz promotes his own chat room, but since he strongly recommends signing up for *a* chat room (for good reason, IMO), that didn’t seem out of line to me.
This is subject matter that doesn’t necessarily lend itself to an audiobook, but I was familiar with most of the terminology and the writing is clear enough that nothing was hard for me to visualize. The diagrams are all available here -- indeed, previewing them might tell you if this is the book you want.
PS. If you want to see a bunch of videos of experienced day traders doing their thing, search youtube for:
Connor Pollifrone, the Boiler Room
Mark the Meerkat, Grok Trades
You’ll notice that they often don’t hold positions for more than a few minutes, sometimes even mere seconds.
March 2, 2020
Clear and useful.
I'm still poor though.
I blame my parents.
I'm still poor though.
I blame my parents.
May 10, 2021
Let me say it out first: this book won't make you a successful day-trader. But this book will prepare you for your journey towards learning more about day-trading. If day-trading is a universe you are looking to explore then, definitely this book is one of the places you won't regret visiting. Once you are here, you'll realize the divergence in the mindset of a trader and an investor. Novices to technical analysis will find themselves a bit lost however since for the purposes of brevity this book won't explain what is MACD? or what is ATR? or what is RSI? Andrew would leave you on your own to figure that out. I would recommend that you make yourself aware of the nuances of technical analysis before you begin reading this book.
I'm sharing my notes from this book here, you may now stop reading this review if you don't want the spoilers. However go ahead if you'd like a gist of what this book talks about:
Risk Management
Success in day trading comes from risk management - finding low-risk entries with a high potential reward. The minimum win:lose ratio for me is 2:1.”
You must avoid stocks that:
(1) are heavily traded by computers and institutional traders,
(2) have small relative trading volume,
(3) are penny stocks and are therefore highly manipulated, and
(4) don’t have any reason to move (no fundamental catalysts).
Three-Step Risk Management
Step 1: Determine your maximum dollar risk for the trade you’re planning (never more than 2% of your account). Calculate this before your trading day starts.
Step 2: Estimate your maximum risk per share, the strategy stop loss, in dollars, from your entry. This comes from the strategies set out in Chapter 7, where I explain in each strategy what the stop loss should be.
Step 3: Divide “1” by “2” to find the absolute maximum number of shares you are allowed to trade each time.
For Example:
Step 1: Let's say my trading capital is Rs 1,00,000. Accordingly, the 2% rule will limit my risk on any trade to Rs 2,000.
Step 2: Using my strategy I can estimate the maximum risk per share. This number is calculated as Buy Price - Stop Loss. Assuming that this number is Rs 20 for my example.
Step 3: Rs 2,000 / Rs 20 = 100 shares. I can safely trade 100 shares in this case.
“Remember, you can always risk less, but you are not allowed to risk more than 2% of your account under any circumstance.”
“Trading needs practice and I strongly recommend that new traders paper trade under supervision for at least three months in a live simulated account.”
“A key reason why many traders fail is that they take negative events and losses in trading personally. Their confidence and peace of mind are connected to their trading results. When traders do well, they feel good. When they encounter losses, they become discouraged, doubtful, and frustrated, questioning themselves, their strategy, and their career. Instead of dealing directly and constructively with their losses, they react to the emotions triggered by personalizing the events.”
“Successful traders are those who trade for skill and not for the money. Almost all professional traders hide their unrealized Profit and Loss (P&L) column while in a trade. They have no interest in seeing how much they are up or down. They focus on the perfect execution of a profit target or a stop loss level. Consistently profitable traders take every negative or positive trade they make as an opportunity to improve themselves.”
Note: LEARN HOW NOT TO TAKE THINGS PERSONALLY.
Physical and Mental Health are important. Eat well balanced nutritional meals, exercise, maintain body weight, fitness levels, get adequate rest.
“One of the fundamentals you must learn from this book is that every day trading strategy comes with a stop loss level and you must stop out from stocks that trade against your strategy.”
“Many traders think a good trading day is a positive day. Wrong. A good trading day is a day that you were disciplined, traded sound strategies, and did not violate any trading rules. ”
How to Find Stock for Trades
"You are only as good as the stocks you trade."
Stocks in Play
• A stock with fresh news
• A stock that is up or down more than 2% before the market Open
• A stock that has unusual pre-market trading activity
• A stock that develops important intraday levels which we can trade-off from
Fundamental Catalysts
• Earnings reports
• Earnings warnings/pre-announcements
• Earnings surprises
• FDA approvals/disapprovals
• Mergers/acquisitions
• Alliances/partnerships/major product releases
• Major contract wins/losses
• Restructurings/layoffs/management changes
• Stock splits/buybacks/debt offerings
Float and Market Cap
“Trading low float stocks is very difficult for the new trader. It is difficult to read the direction of their next move and therefore they are very difficult to manage your risk while trading them. I discourage new traders from trading low float stocks. When the new trader is wrong, the loss is such that it wipes out many gains."
“The second category is medium float stocks in the range of $10-$100. These stocks have medium floats of around 10 million to 500 million shares. Many of my strategies explained in this book work well on these stocks, especially the VWAP and Support or Resistance Strategies. Medium float stocks that are more expensive than $100 are not popular among retail day traders and I myself avoid them. You usually cannot buy many shares of them because of their high price. Therefore, it is basically useless to day trade them. Leave them for the institutional traders.”
“The third category of stocks for trading is mega cap stocks like Apple, Alibaba, Yahoo, Microsoft and Home Depot. These are well-established companies that usually have over $500 million in public shares available for trading. These stocks are traded in millions of shares every day. As you may guess, these stocks move only when large institutional traders, investment banks, and hedge funds are buying or selling large positions. Retail traders like us, who typically trade 100 to 1,000 shares, usually cannot move the price of these stocks. Retail traders should avoid these stocks unless there is a good fundamental catalyst for them. From the strategies set forth in Chapter 7, Reversals and Moving Average Strategies usually work well on these stocks. Do not forget though, unless there is a fundamental catalyst, these stocks are being heavily traded by computers and high-frequency traders and are not suitable for retail day trading.”
Pre-Market Gappers
• Stocks that in the pre-market gapped up or down at least 2%
• Stocks that have traded at least 50,000 shares in the pre-market
• Stocks that have an average daily volume of over 500,000 shares
• Stocks that have Average True Range of at least 50 cents (how large of a range a stock has on average every day)
• There is a fundamental catalyst for the stock
• As a rule, I do not trade stocks with an enormous short interest higher than 30% (the short interest is the quantity of stock shares that investors or traders have sold short but not yet covered or closed out)
“A high short interest indicates traders or investors think a stock’s price is likely to fall. But the challenge with high short interest is that these stocks are more prone to a short squeeze by bullish investors and traders. A short squeeze occurs when short sellers panic and are scrambling to return their borrowed shares, forcing prices to increase quickly and dangerously. You do not want to be stuck short in a short squeeze.”
Real-Time Intraday Scans
• Have gapped up or down at least $1
• Have ATR of more than 50 cents
• Have average relative volume of at least 1.5 (the stock is trading at 1.5 times its normal volume)
• Have average daily trading volume of at least 500,000 shares
“I will also take a look at the sector of stocks. If I have a few stocks in one sector, there is a good chance that these stocks are not in play. They have high relative volume because their sector is under heavy trading by institutional traders. It is important to know that stocks usually trade with their sector. For example, when oil stocks are selling off, almost all of the oil companies sell off. Therefore, it is important to recognize Stocks in Play from the herd. Remember, you are only as good as the stock you trade, so if you are the best trader in the world, but in a wrong stock, you will lose money.”
Indicators on my Charts
1. Price action in the form of candlesticks
2. Volume of shares being traded
3. 9 Exponential Moving Average (9 EMA)
4. 20 Exponential Moving Average (20 EMA)
5. 50 Simple Moving Average (50 SMA)
6. 200 Simple Moving Average (200 SMA)
7. Volume Weighted Average Price (VWAP)
8. Previous day’s closing price
9. Daily levels of support or resistance
I keep the color of all my moving average indicators in grey except VWAP which is colored in blue. VWAP is the most important day trading indicator and needs to be easily and quickly distinguished from other moving averages. I don’t want to have a lot of colors on my charts so I maintain a white background with mostly red and black coloring.
Market Orders
“Buy me at any price! Now!”
“Sell me at any price! Now!”
Limit Orders
“Buy me at this price only! Not higher!”
“Sell me at this price only! Not lower!”
Marketable Limit Orders
“Buy me now, but up to this price! Not higher!”
“Sell me now, but down to this price! Not lower!”
Learn Hotkeys!
Check out: Trade2Win dot com and https://www.elitetrader.com/et/
Candlesticks
Green candles indicate buying pressure. Red candles indicate selling pressure. There are three types of people in the market: a) Buyers b) Sellers and c) Undecided.
Bid-ask spread is the difference between what buyers are ready to pay for a stock and what sellers are willing to accept for the same stock.
The goal of successful day trading is to identify whether buyers are in control or whether sellers are in control, and then make a calculated move, at the appropriate time, quickly and stealthily.
Price action means reading the candlesticks to generate an opinion on the general attitude for the stock.
Must know candlesticks:
a) Bullish Candlesticks
b) Bearish Candlesticks
c) Indecision Candlesticks:
a. Spinning Top
b. Doji
i. Simple
ii. Shooting Star: Seller's may take control
iii. Hammer: Buyer's may take control
Trading Strategies
Based on:
a) Price Action
b) Technical Indicators
c) Candlesticks and Chart Patterns
The author prefers to trade on 5-min charts, and also monitors 1-minute charts.
You must master only a few solid setups to be consistently profitable. Simple trading methods reduce confusion and stress and allow you to concentrate on the psychological aspect of trading.
Trade Management:
For $10-$50 price range, the author prefers to have a trade size of 800 shares
1. I buy 400 shares.
2. If trade goes in my favor, I add another 400 shares (note that I add into my winning position, not into losing one).
3. I sell 400 shares in the first target, bringing my stop loss to break-even (my entry point).
4. I sell another 200 shares in the next target point.
5. I usually keep the last 200 shares until I am stopped out. I always retain some shares in case the prices keep moving in my favor.
For $50-$100 price range, the author reduces the trade size to 400 shares.
Also, you can enter a trade small, with say 100 shares and then add to your position in various steps.
Never average down losing positions. When something is selling off, you really do not know if it will be a massive bear market until you see the charts. And sadly, you cannot see the charts until it is too late, not until after the sell off is finished.
Strategy 1: ABCD Pattern
Strategy 2: Bull Flag Momentum
Strategy 3 & 4: Reversal Trading
Strategy 5: Moving Average Trend Trading
Strategy 6: VWAP Trading
Strategy 7: Support or Resistance Trading
Strategy 8: Red-to-Green Trading
Strategy 9: Open Range Breakout
Remember that the market is always going to be there, you don't need to rush this.
Trading Strategy Based on the Time of Day
Open: first 1.5 hours
• Bull Flag Momentum and VWAP trades tend to be the best strategies for open.
Mid-day:
• Market is slow. Worst time of day to trade. There is less volume and liquidity.
• Reversal, VWAP, Moving Average, and Support or Resistance trades tend to be the best strategies for the Mid-day.
• Never trade Bull Flag Momentum in Mid-day or at close.
Close: last 1 hour
• Stocks are more directional, so I stick with those that are trending up or down in the last hour of the trading day.
• VWAP, Support or Resistance, and Moving Average trades tend to be the best strategies for the close.
You are not allowed to lose more than 30% of what you have made in the Open during Mid-day and the Close.
Step-by-Step to a Successful Trade
1. Morning Routine: Waking up on early, physical workout (like running), good breakfast.
2. Build a Watchlist.
3. Organize a Trade Plan. (entry, exit, and stop loss)
4. Initiate the Trade according to the Trade Plan.
5. Execute the Trade according to the Trade Plan.
6. Journaling and Reflection.
Question you must ask:
• Who is in control of the price: the buyers or the sellers?
• What technical levels are most important?
• Is the stock stronger or weaker than the market?
• Where is most of the volume being traded? At the VWAP? Or the first five minutes? Or near moving averages?
• How much volume at a price causes the stock to move up or down?
• What is the bid-ask spread? Is it tradeable?
• How quickly does the stock move? Is it being traded smoothly or is it choppy, jumping up and down with every trade?
• Is the stock trading in a particular pattern on a 5-minute chart? How is the stock being traded on a 1-minute chart?
All of this information should be gathered before you make any trade.
Trading teaches you a lot about yourself, about your mental weaknesses, and about your strengths.
I'm sharing my notes from this book here, you may now stop reading this review if you don't want the spoilers. However go ahead if you'd like a gist of what this book talks about:
Risk Management
Success in day trading comes from risk management - finding low-risk entries with a high potential reward. The minimum win:lose ratio for me is 2:1.”
You must avoid stocks that:
(1) are heavily traded by computers and institutional traders,
(2) have small relative trading volume,
(3) are penny stocks and are therefore highly manipulated, and
(4) don’t have any reason to move (no fundamental catalysts).
Three-Step Risk Management
Step 1: Determine your maximum dollar risk for the trade you’re planning (never more than 2% of your account). Calculate this before your trading day starts.
Step 2: Estimate your maximum risk per share, the strategy stop loss, in dollars, from your entry. This comes from the strategies set out in Chapter 7, where I explain in each strategy what the stop loss should be.
Step 3: Divide “1” by “2” to find the absolute maximum number of shares you are allowed to trade each time.
For Example:
Step 1: Let's say my trading capital is Rs 1,00,000. Accordingly, the 2% rule will limit my risk on any trade to Rs 2,000.
Step 2: Using my strategy I can estimate the maximum risk per share. This number is calculated as Buy Price - Stop Loss. Assuming that this number is Rs 20 for my example.
Step 3: Rs 2,000 / Rs 20 = 100 shares. I can safely trade 100 shares in this case.
“Remember, you can always risk less, but you are not allowed to risk more than 2% of your account under any circumstance.”
“Trading needs practice and I strongly recommend that new traders paper trade under supervision for at least three months in a live simulated account.”
“A key reason why many traders fail is that they take negative events and losses in trading personally. Their confidence and peace of mind are connected to their trading results. When traders do well, they feel good. When they encounter losses, they become discouraged, doubtful, and frustrated, questioning themselves, their strategy, and their career. Instead of dealing directly and constructively with their losses, they react to the emotions triggered by personalizing the events.”
“Successful traders are those who trade for skill and not for the money. Almost all professional traders hide their unrealized Profit and Loss (P&L) column while in a trade. They have no interest in seeing how much they are up or down. They focus on the perfect execution of a profit target or a stop loss level. Consistently profitable traders take every negative or positive trade they make as an opportunity to improve themselves.”
Note: LEARN HOW NOT TO TAKE THINGS PERSONALLY.
Physical and Mental Health are important. Eat well balanced nutritional meals, exercise, maintain body weight, fitness levels, get adequate rest.
“One of the fundamentals you must learn from this book is that every day trading strategy comes with a stop loss level and you must stop out from stocks that trade against your strategy.”
“Many traders think a good trading day is a positive day. Wrong. A good trading day is a day that you were disciplined, traded sound strategies, and did not violate any trading rules. ”
How to Find Stock for Trades
"You are only as good as the stocks you trade."
Stocks in Play
• A stock with fresh news
• A stock that is up or down more than 2% before the market Open
• A stock that has unusual pre-market trading activity
• A stock that develops important intraday levels which we can trade-off from
Fundamental Catalysts
• Earnings reports
• Earnings warnings/pre-announcements
• Earnings surprises
• FDA approvals/disapprovals
• Mergers/acquisitions
• Alliances/partnerships/major product releases
• Major contract wins/losses
• Restructurings/layoffs/management changes
• Stock splits/buybacks/debt offerings
Float and Market Cap
“Trading low float stocks is very difficult for the new trader. It is difficult to read the direction of their next move and therefore they are very difficult to manage your risk while trading them. I discourage new traders from trading low float stocks. When the new trader is wrong, the loss is such that it wipes out many gains."
“The second category is medium float stocks in the range of $10-$100. These stocks have medium floats of around 10 million to 500 million shares. Many of my strategies explained in this book work well on these stocks, especially the VWAP and Support or Resistance Strategies. Medium float stocks that are more expensive than $100 are not popular among retail day traders and I myself avoid them. You usually cannot buy many shares of them because of their high price. Therefore, it is basically useless to day trade them. Leave them for the institutional traders.”
“The third category of stocks for trading is mega cap stocks like Apple, Alibaba, Yahoo, Microsoft and Home Depot. These are well-established companies that usually have over $500 million in public shares available for trading. These stocks are traded in millions of shares every day. As you may guess, these stocks move only when large institutional traders, investment banks, and hedge funds are buying or selling large positions. Retail traders like us, who typically trade 100 to 1,000 shares, usually cannot move the price of these stocks. Retail traders should avoid these stocks unless there is a good fundamental catalyst for them. From the strategies set forth in Chapter 7, Reversals and Moving Average Strategies usually work well on these stocks. Do not forget though, unless there is a fundamental catalyst, these stocks are being heavily traded by computers and high-frequency traders and are not suitable for retail day trading.”
Pre-Market Gappers
• Stocks that in the pre-market gapped up or down at least 2%
• Stocks that have traded at least 50,000 shares in the pre-market
• Stocks that have an average daily volume of over 500,000 shares
• Stocks that have Average True Range of at least 50 cents (how large of a range a stock has on average every day)
• There is a fundamental catalyst for the stock
• As a rule, I do not trade stocks with an enormous short interest higher than 30% (the short interest is the quantity of stock shares that investors or traders have sold short but not yet covered or closed out)
“A high short interest indicates traders or investors think a stock’s price is likely to fall. But the challenge with high short interest is that these stocks are more prone to a short squeeze by bullish investors and traders. A short squeeze occurs when short sellers panic and are scrambling to return their borrowed shares, forcing prices to increase quickly and dangerously. You do not want to be stuck short in a short squeeze.”
Real-Time Intraday Scans
• Have gapped up or down at least $1
• Have ATR of more than 50 cents
• Have average relative volume of at least 1.5 (the stock is trading at 1.5 times its normal volume)
• Have average daily trading volume of at least 500,000 shares
“I will also take a look at the sector of stocks. If I have a few stocks in one sector, there is a good chance that these stocks are not in play. They have high relative volume because their sector is under heavy trading by institutional traders. It is important to know that stocks usually trade with their sector. For example, when oil stocks are selling off, almost all of the oil companies sell off. Therefore, it is important to recognize Stocks in Play from the herd. Remember, you are only as good as the stock you trade, so if you are the best trader in the world, but in a wrong stock, you will lose money.”
Indicators on my Charts
1. Price action in the form of candlesticks
2. Volume of shares being traded
3. 9 Exponential Moving Average (9 EMA)
4. 20 Exponential Moving Average (20 EMA)
5. 50 Simple Moving Average (50 SMA)
6. 200 Simple Moving Average (200 SMA)
7. Volume Weighted Average Price (VWAP)
8. Previous day’s closing price
9. Daily levels of support or resistance
I keep the color of all my moving average indicators in grey except VWAP which is colored in blue. VWAP is the most important day trading indicator and needs to be easily and quickly distinguished from other moving averages. I don’t want to have a lot of colors on my charts so I maintain a white background with mostly red and black coloring.
Market Orders
“Buy me at any price! Now!”
“Sell me at any price! Now!”
Limit Orders
“Buy me at this price only! Not higher!”
“Sell me at this price only! Not lower!”
Marketable Limit Orders
“Buy me now, but up to this price! Not higher!”
“Sell me now, but down to this price! Not lower!”
Learn Hotkeys!
Check out: Trade2Win dot com and https://www.elitetrader.com/et/
Candlesticks
Green candles indicate buying pressure. Red candles indicate selling pressure. There are three types of people in the market: a) Buyers b) Sellers and c) Undecided.
Bid-ask spread is the difference between what buyers are ready to pay for a stock and what sellers are willing to accept for the same stock.
The goal of successful day trading is to identify whether buyers are in control or whether sellers are in control, and then make a calculated move, at the appropriate time, quickly and stealthily.
Price action means reading the candlesticks to generate an opinion on the general attitude for the stock.
Must know candlesticks:
a) Bullish Candlesticks
b) Bearish Candlesticks
c) Indecision Candlesticks:
a. Spinning Top
b. Doji
i. Simple
ii. Shooting Star: Seller's may take control
iii. Hammer: Buyer's may take control
Trading Strategies
Based on:
a) Price Action
b) Technical Indicators
c) Candlesticks and Chart Patterns
The author prefers to trade on 5-min charts, and also monitors 1-minute charts.
You must master only a few solid setups to be consistently profitable. Simple trading methods reduce confusion and stress and allow you to concentrate on the psychological aspect of trading.
Trade Management:
For $10-$50 price range, the author prefers to have a trade size of 800 shares
1. I buy 400 shares.
2. If trade goes in my favor, I add another 400 shares (note that I add into my winning position, not into losing one).
3. I sell 400 shares in the first target, bringing my stop loss to break-even (my entry point).
4. I sell another 200 shares in the next target point.
5. I usually keep the last 200 shares until I am stopped out. I always retain some shares in case the prices keep moving in my favor.
For $50-$100 price range, the author reduces the trade size to 400 shares.
Also, you can enter a trade small, with say 100 shares and then add to your position in various steps.
Never average down losing positions. When something is selling off, you really do not know if it will be a massive bear market until you see the charts. And sadly, you cannot see the charts until it is too late, not until after the sell off is finished.
Strategy 1: ABCD Pattern
Strategy 2: Bull Flag Momentum
Strategy 3 & 4: Reversal Trading
Strategy 5: Moving Average Trend Trading
Strategy 6: VWAP Trading
Strategy 7: Support or Resistance Trading
Strategy 8: Red-to-Green Trading
Strategy 9: Open Range Breakout
Remember that the market is always going to be there, you don't need to rush this.
Trading Strategy Based on the Time of Day
Open: first 1.5 hours
• Bull Flag Momentum and VWAP trades tend to be the best strategies for open.
Mid-day:
• Market is slow. Worst time of day to trade. There is less volume and liquidity.
• Reversal, VWAP, Moving Average, and Support or Resistance trades tend to be the best strategies for the Mid-day.
• Never trade Bull Flag Momentum in Mid-day or at close.
Close: last 1 hour
• Stocks are more directional, so I stick with those that are trending up or down in the last hour of the trading day.
• VWAP, Support or Resistance, and Moving Average trades tend to be the best strategies for the close.
You are not allowed to lose more than 30% of what you have made in the Open during Mid-day and the Close.
Step-by-Step to a Successful Trade
1. Morning Routine: Waking up on early, physical workout (like running), good breakfast.
2. Build a Watchlist.
3. Organize a Trade Plan. (entry, exit, and stop loss)
4. Initiate the Trade according to the Trade Plan.
5. Execute the Trade according to the Trade Plan.
6. Journaling and Reflection.
Question you must ask:
• Who is in control of the price: the buyers or the sellers?
• What technical levels are most important?
• Is the stock stronger or weaker than the market?
• Where is most of the volume being traded? At the VWAP? Or the first five minutes? Or near moving averages?
• How much volume at a price causes the stock to move up or down?
• What is the bid-ask spread? Is it tradeable?
• How quickly does the stock move? Is it being traded smoothly or is it choppy, jumping up and down with every trade?
• Is the stock trading in a particular pattern on a 5-minute chart? How is the stock being traded on a 1-minute chart?
All of this information should be gathered before you make any trade.
Trading teaches you a lot about yourself, about your mental weaknesses, and about your strengths.
July 30, 2018
Ok let's be honest...
Look - its a great book, but really just a revision of the first book.
The whole industry (trading education) suffers from an honesty/transparency issue and this book is no different. Andrew even dedicates a few pages at how wounded he is in regards to people saying this book is a gigantic add for his website, which it is (despite his protests). If he were sincere he would disclose that the education component of his business far out performs his trading (a fair assumption). That's what we really want, honesty AND transparency.
The content itself is excellent as always from Andrew, but I just feel he is losing touch a tad with the little guy.
Andrew would also have you believe you can just pop into the chatroom and have all your questions answered...yeah right. I would say he answers maybe 1 in 20 questions in chat. That's not to say he isn't doing his best to help you, but I am critiscizing a very small portion of the book that Andrew dedicates to having you believe he does this from the goodness of his heart.
Look - its a great book, but really just a revision of the first book.
The whole industry (trading education) suffers from an honesty/transparency issue and this book is no different. Andrew even dedicates a few pages at how wounded he is in regards to people saying this book is a gigantic add for his website, which it is (despite his protests). If he were sincere he would disclose that the education component of his business far out performs his trading (a fair assumption). That's what we really want, honesty AND transparency.
The content itself is excellent as always from Andrew, but I just feel he is losing touch a tad with the little guy.
Andrew would also have you believe you can just pop into the chatroom and have all your questions answered...yeah right. I would say he answers maybe 1 in 20 questions in chat. That's not to say he isn't doing his best to help you, but I am critiscizing a very small portion of the book that Andrew dedicates to having you believe he does this from the goodness of his heart.
Read
August 11, 20204.5 Stars
A no bull shit book, which if thoughtfully applied, with continuous learning, patience and perseverance can make great fortunes. I am still a novice in stock market. I hope I could apply what I learnt from this book, looking forward to read the second part of this.
A no bull shit book, which if thoughtfully applied, with continuous learning, patience and perseverance can make great fortunes. I am still a novice in stock market. I hope I could apply what I learnt from this book, looking forward to read the second part of this.
April 25, 2018
While reading, I kept thinking this was going to get a 4 star rating from me because it was a little long winded and repetitive for my taste, but I assume the author only seeks to emphasize his hardest-earned lessons. The redundancy actually makes it easier to go back and find specific advice as there are multiple places you can refer to, this reduces valuable search time!
I definitely learned a lot from this book, and it confirmed some of my hunches on how to trade in daily markets effectively. It's very well organized and features a great section (Chapter 7) that describes basic trading strategies, each of which have been tried and tested over the years. I was impressed with how recent the example trades were which increased my confidence in the relevance of the info.
I felt this was a great intro for me as someone who previously knew very little about trading stocks. At the end you'll find a convenient list that details the author's personal "rules" of day trading.
I definitely learned a lot from this book, and it confirmed some of my hunches on how to trade in daily markets effectively. It's very well organized and features a great section (Chapter 7) that describes basic trading strategies, each of which have been tried and tested over the years. I was impressed with how recent the example trades were which increased my confidence in the relevance of the info.
I felt this was a great intro for me as someone who previously knew very little about trading stocks. At the end you'll find a convenient list that details the author's personal "rules" of day trading.
September 11, 2020
Two and a half months, a lot of loss, humiliation and heart break, I realized day trade is not for me. Still, I learned a lot past 75 days.
November 13, 2018
Pretty good intro to daytrading. It is very newbie friendly. Teaches you how the brokers, executing programs work. What to look in them.
The meat of the book is the setups and his entry/exit system. I doubt you will find anything else much useful.
You can read the book but his main daytrading strategies are reversals bottom/top around resistance./support, momentum gap up on heavy volume, trading around the wvap for shorting/long indication, abcd set up, trendline trading(trading along a sma or ema) and thats it.
His favorite is the vwap. It is very simple but for day trading it works fine.
Anyone interested in trading for a longer period will find nothing useful here.
There isn't any depth to the book. So you won't learn some fundamental mechanics of the market or some really niche advanced setups. Still good for learning about some basic market setups. You can look at a chart and see what other traders are seeing.
I prefer trading for longer periods of time as most institutional traders do. But for daytrading this is a very simple fast book to read.
The meat of the book is the setups and his entry/exit system. I doubt you will find anything else much useful.
You can read the book but his main daytrading strategies are reversals bottom/top around resistance./support, momentum gap up on heavy volume, trading around the wvap for shorting/long indication, abcd set up, trendline trading(trading along a sma or ema) and thats it.
His favorite is the vwap. It is very simple but for day trading it works fine.
Anyone interested in trading for a longer period will find nothing useful here.
There isn't any depth to the book. So you won't learn some fundamental mechanics of the market or some really niche advanced setups. Still good for learning about some basic market setups. You can look at a chart and see what other traders are seeing.
I prefer trading for longer periods of time as most institutional traders do. But for daytrading this is a very simple fast book to read.
June 29, 2025
I came across this book for around a dollar. Could be the best value I ever received as it more than paid for itself almost immediately.
Turns out, he is a local author and got a PhD in engineering before he became a trader. I found him trustworthy and his teachings practical and easy to understand. I feel more educated and confident in my potential should I decide to stop dabbling and make a career change.
I am grateful Andrew Aziz wrote this book, and that it fell into my lap at the perfect time when I was going to try trading daily for a couple of months while my regular work was slow.
Turns out, he is a local author and got a PhD in engineering before he became a trader. I found him trustworthy and his teachings practical and easy to understand. I feel more educated and confident in my potential should I decide to stop dabbling and make a career change.
I am grateful Andrew Aziz wrote this book, and that it fell into my lap at the perfect time when I was going to try trading daily for a couple of months while my regular work was slow.
May 20, 2022
Looks like I am finally being an adult given that I am reading books on stock market!
This is the first book I have ever read on stock market. So I have nothing to compare it to. Understandably, a lot of the terminology was very very new, yet was able to understand quite a bit of it. I guess that says that the book is beginner friendly to an extent. Only when I put into practice can I comment on any of the practical wisdom shared in this book :)
This is the first book I have ever read on stock market. So I have nothing to compare it to. Understandably, a lot of the terminology was very very new, yet was able to understand quite a bit of it. I guess that says that the book is beginner friendly to an extent. Only when I put into practice can I comment on any of the practical wisdom shared in this book :)
April 26, 2018
it is one of those random moment to suffice my thirst about investment, stock market etc. I was in a huge need to really understand what kind of animal 'day trade' is, and how much different it is than 'investment' in general.
I will be lying if i said that i fully grasp the book, at the very least, i do feel acquainted with some of the those fancy trading terms, the typical day trade world, tips & rule to be a profitable trader. Although, i dont think i remember any of them anymore by now...well perhaps, it was mainly becuase i did not intent to remember.
Reading this book, perhaps merely enough to have proper conversation with real trader, and at best, it give me a clear warning and helping me a lot in firming my decision. I dont think i can cope with more stress by adding day trade to my life amidst its promising future opportunity, giving the fact that day trader will lose money (lot of it), long term process of skill (not so sure if there is any way to decipher those skill other than, do simulation, trade carefully, and with time hopefully you'll get consistent profit than not).
I will be lying if i said that i fully grasp the book, at the very least, i do feel acquainted with some of the those fancy trading terms, the typical day trade world, tips & rule to be a profitable trader. Although, i dont think i remember any of them anymore by now...well perhaps, it was mainly becuase i did not intent to remember.
Reading this book, perhaps merely enough to have proper conversation with real trader, and at best, it give me a clear warning and helping me a lot in firming my decision. I dont think i can cope with more stress by adding day trade to my life amidst its promising future opportunity, giving the fact that day trader will lose money (lot of it), long term process of skill (not so sure if there is any way to decipher those skill other than, do simulation, trade carefully, and with time hopefully you'll get consistent profit than not).
December 2, 2019
Andrew Aziz writes good books
Highly recommend this book as a follow up for his Andrew’s first. I have read this book a few times. This and Andrew’s Day Trading for beginners is why I have become a day trader. A very simple to understand guide to start a path into day trading for anybody. I joined his Bear Bull Trader Community and I highly recommend that for anyone that is starting day trading on there own. Start with his Day Trading for Beginners and after that go directly to this book to get a little more in depth. Yes, a bit of it is repetitive from the first, but that’s important to re-read so it sticks and you understand better. I will continue to read more trading books to grow my knowledge, but this is the base for a solid foundation into trading.
Highly recommend this book as a follow up for his Andrew’s first. I have read this book a few times. This and Andrew’s Day Trading for beginners is why I have become a day trader. A very simple to understand guide to start a path into day trading for anybody. I joined his Bear Bull Trader Community and I highly recommend that for anyone that is starting day trading on there own. Start with his Day Trading for Beginners and after that go directly to this book to get a little more in depth. Yes, a bit of it is repetitive from the first, but that’s important to re-read so it sticks and you understand better. I will continue to read more trading books to grow my knowledge, but this is the base for a solid foundation into trading.
July 6, 2018
I am a swing trader since 21 years old and am thinking of exploring day trading. After reading the beginner and advanced techniques in Day Trading I found that he is real and honestly taught what he knows. I highly recommend this book for people that have passion in day trading and would like to pursue day trading as a long-term career. You definitely will not regret.
If possible invest some money buys this book in hardcopy/paperback format due to better view and understanding on the chart that Andrew has explained as I found that I was unable to read the chart properly in my kindle version.
Cheers
If possible invest some money buys this book in hardcopy/paperback format due to better view and understanding on the chart that Andrew has explained as I found that I was unable to read the chart properly in my kindle version.
Cheers
August 15, 2020
I like it, a quick read.
Unlike other books on the same topic I have come across, this isn't dishing the self help mantra but rather it took each chapter with believable feelings that the author knew his craft and was illustrating from experience.
In addition this was such a quick read which on its own means for me to ever apply any nuggets from this book I must reread it and extract points and practices which again certainly requires me searching for more resources.
That said, as intrigued as I have been on the stock market I find myself realising there's a lot of work that these traders do and if one doesn't have the patience and skills perhaps go find another interests or occupation.
Unlike other books on the same topic I have come across, this isn't dishing the self help mantra but rather it took each chapter with believable feelings that the author knew his craft and was illustrating from experience.
In addition this was such a quick read which on its own means for me to ever apply any nuggets from this book I must reread it and extract points and practices which again certainly requires me searching for more resources.
That said, as intrigued as I have been on the stock market I find myself realising there's a lot of work that these traders do and if one doesn't have the patience and skills perhaps go find another interests or occupation.
January 2, 2025
I really liked reading this one. Andrew provided simplified overviews of strategies that can be understood and researched further outside of the pages of the book. What I liked most about was the focus on the process or strategy for success. That combined with a clear understanding day trading and what actually suit your style (spoiler it might be swing trading and not day trading) made it an interesting and enjoyable read.
July 28, 2023
I've definitely learned a lot from this book, and have tried out some of the strategies and made profit.
There's no fluff in this book, straight to the point strategies and advice.
There's no fluff in this book, straight to the point strategies and advice.
April 17, 2021
Very well laid plans for beginners who want to begin there career in trading. Breaking myths and misconceptions for impulsive traders. More than buying and selling, it's more important how you deal with your risk and rewards.
Day trading is not a hobby or casual trading...it's a "SERIOUS BUSINESS".
Day trading is not a hobby or casual trading...it's a "SERIOUS BUSINESS".
May 17, 2021
Most of the books in the domain of technical analysis deal either with the hardcore psychological approach to trading or too complicated mathematical approach to markets. Aziz has done a great job in maintaining the balance of the two in this book and has written a great guide for beginners. It starts with explaining the life of a trader, his mindset and slowly takes a dive into some strategies that are used commonly and can be understood easily by anyone.
A no-nonsense read and a good one for people who want to start their journey into day trading or at least start reading about it.
A no-nonsense read and a good one for people who want to start their journey into day trading or at least start reading about it.
March 22, 2021
Overall, a solid book for getting started as a day trader. He covers a handful of setups that work well for day trading and covers a number of "rules" as well. For example, he suggests never risking more than 2% of your account balance on any single trade. This has a very specific meaning that's slightly different than a surface-level reading. Anyway, I would recommend this as a daytrading primer.
January 20, 2020
Decent fundamentals and strategies for beginner traders. Even as an intermediate trader I was able to takeaway a few key insights about indicators that I use on a daily basis but did not completely understand the math behind. Aziz does a good job making it easy to understand the basic mass psychology behind intraday price movements.
April 15, 2020
A practical and balanced overview of day trades for beginners. Not directly applicable to Indian markets in its entirety but the fundamental and emotional rules presented for day trading are gems of wisdom. Must read for anyone who thinks day trading is a license to print money.
August 14, 2023
Discover the fundamentals of day trading.
They say knowledge is power, but in the world of day trading, knowledge is money.
If you're here, chances are, you're seeking to swap your 9 to 5 job for the more flexible and financially rewarding career of day trading. You're not wrong – day trading can indeed provide you with both more time and financial freedom.
However, a word of caution: don't anticipate jet-setting across the globe after your first month as a day trader. Although day trading might appear straightforward, it's quite the opposite. To thrive in this field, you must first invest time in acquiring knowledge, and that begins with firmly grasping the basics.
In this book, you'll learn what day trading entails, how to prepare to become a day trader, and the strategies for consistent profitability.
-
Day trading 101.
Day trading is a specific form of stock trading that occurs within a single day. Unlike investors and swing traders, day traders don't hold onto any stocks after the market closes – they close their positions during the trading hours of the same day. This strategy is employed because day traders take advantage of momentary price fluctuations. They focus on how a price moves within seconds or minutes, rather than a company's performance over months or years.
There are two main strategies to profit from day trading: buying long and selling short. Buying long involves purchasing stocks at a relatively low price and selling them when the price rises. On the other hand, selling short means borrowing stocks from your broker at a higher price, then returning them when the price falls.
Contrary to popular belief, day trading won't make you enormously wealthy overnight. The reality is that you probably won't see consistent profits until after about six months or so. And even to see those results, you need to take day trading seriously. It's not a casual hobby you can engage in when you have ten minutes to spare – it's a business that demands considerable time and energy.
Just like any other business, success in day trading requires proper education. You'll need to read books, attend courses, and perhaps even enlist the help of a mentor. Joining trading communities and chatrooms can also be valuable, as the members can readily support and teach you their strategies. Some chatrooms even offer the opportunity to watch others trade live.
After you've grasped the fundamentals, it's crucial to spend time practicing on a simulator platform before going live. A simulator is similar to a real trading platform but uses imaginary money. As a good rule of thumb, you should practice on a simulator for a minimum of three months. Use this time to refine and perfect your trading strategy.
In addition to education and practice, you'll also need the right tools to get started. The three most important ones are probably your broker, trading platform, and scanners. Your broker is essentially a company that allows you access to a stock exchange via a website or mobile app, for a fee. To start trading, you'll need to create a brokerage account with your chosen broker and fund it. Look for a direct-access broker that offers speedy order processing, as trades can occur in mere seconds.
Next, you'll want to identify a trading platform. This software is where you place your orders. Once your order is sent to the stock exchange by the trading platform, your broker then fills it for you.
Finally, there are the pre-market scanner and the real-time intraday scanner. These are programs that provide you with a list of potential stocks to trade. Both can be configured to find stocks that match your predefined criteria, so all you have to do is review the list and decide which ones to trade.
Day trading can be a rewarding venture, but only if you approach it with dedication and a willingness to continuously learn and improve.
-
What day trading strategies to employ.
Your trading strategy is your game plan, the tool you’ll use to enter, potentially gain profits from, and then exit a trade. If you’re just starting out as a trader, the author recommends two novice-friendly strategies: the ABCD pattern and the opening range breakout.
Let’s dive into the ABCD pattern first. It’s both a classic and basic strategy that consists of four points. It starts at point A, where you’ll notice a rise in the stock price, climbing to point B, the day's significant new high. The price then starts decreasing until it settles at point C, a price still higher than point A. From C, the price again ascends to a new high at point D.
When using the ABCD Pattern, begin by observing a stock showing an A-to-B trend. Avoid jumping the gun – simply observe until it reaches point C. When the price stabilizes at this point, enter the trade as close to point C as possible. Next, set your stop loss just below point C, minimizing any loss if the price drops below C. Conversely, if the price starts rising to point D, seize the moment. Sell half of your share size at point D and shift your stop loss to your entry point. Then, sell the remainder of your share size either at your target or when you sense the price will drop again. Typically, this decrease is signaled by a new low price on the stock’s five-minute candlestick chart.
Now, onto the opening range breakout, or ORB. This strategy hinges on the opening range, the price difference between the market opening, and a set time afterward. An increase or decrease in price beyond the opening range is your cue to enter the trade. The waiting period varies by trader, but if you're a beginner, try to hold off for five minutes or longer – thirty to sixty-minute periods are generally great starting points.
For the ORB strategy, start by monitoring your shortlisted stocks for the first five minutes of market opening. Look for clues such as high volume with various orders, price direction, and the stock’s opening range. Ideally, the opening range should be lower than the stock’s average true range, or ATR, which is visible in your scanner program.
After the initial five-minute period, check whether the price moved up or down from the opening range. If it’s gone up, go long and set your stop loss just below the volume-weighted average price, or VWAP line, a key indicator for day traders that should already be marked on your trading platform.
If the price has decreased, go short and place your stop loss just above the VWAP. For either position, designate your profit target at the next substantial level or when you anticipate the price will start to reverse.
While the ABCD pattern and ORB strategy are good starting points, a myriad of day trading strategies exist for you to learn and implement. It's wise, though, to master one strategy before moving on to the next. Stay committed, assess how it pans out, and along the way, you might find yourself modifying the strategy to craft a new one fitting your style. That’s what distinguishes you from other traders and can lead to consistent profitability.
-
How to complete a successful trade.
For your trades to be successful, knowing and following your trading process is essential. This involves not only the trade itself but also what you do before and after the market opens and closes.
The first step is to start your trading day hours before the 9:30 a.m. New York open. This early start prepares your mind and body for the day's mental demands. Incorporate some aerobic exercise, hydration, and a meal into your routine, and aim to be at your desk two hours before the market opens.
Once you're at your desk, it's time to build your watchlist of stocks in play. In the world of day trading, stocks in play are those less affected by computer algorithms and large institutional traders. Instead, they're the focus of day traders like you.
Identifying such stocks involves several steps. First, they're moving against the general market trend, usually driven by a fundamental catalyst or recent news. They might have released earnings reports, launched significant products, or announced substantial layoffs.
Second, these stocks show pre-market trading activities that are unusual. Look for those with no fewer than 50,000 shares.
Third, they've gapped or moved up or down by over 2 percent pre-market.
Finally, these stocks reach significant levels within trading hours.
To refine your list of stocks in play, apply additional criteria. Target stocks showing a deviation from their normal volume with an increased trading volume. Look for an average daily volume of more than 500,000 shares. Your stocks in play should also have no less than 50 cents average true range.
To find your Stocks in Play, start with your pre-market watchlist. Ensure you've set up your watchlist program with these criteria. If you're part of a trading community, insights from member watchlists can be valuable. If you're using a specific strategy, however, real-time market scanners are recommended.
From your watchlist, select two to three stocks to focus on. Do this by researching all the stocks on the list first. Then, finalize your shortlist of two to three stocks 15 minutes before the market opens.
With your shortlist in hand, start crafting your trading plan. Look for familiar patterns in each stock's chart – patterns you've seen perform well in the past. Once you've identified these patterns, build your strategy around if-then statements. If a certain scenario occurs, then you'll take a specified action at a certain price point. This approach helps you define your entry, profit target, and stop loss points – the latter being the price point where you tactfully exit the trade when things aren't going in your favor.
Once you've laid out your trading plan on paper, patiently wait until the stock presents the right setup for entry. That's your cue to dive in and implement your trading plan. Once in the trade, sticking to your plan is vital. Exit only at your predefined points to minimize losses.
If you hit your daily profit target, or after making two or three trades, consider wrapping up your trading day. Avoid a trading spree of twenty or more trades in a day – limit yourself to two or three.
Finally, before ending your day, make journal entries about your trades. This practice helps you review and improve your strategy. Sharing your journal with your community or mentor for feedback can also be beneficial.
Your trading process might differ slightly from this, but what's important is your adherence to it and thoughtful execution.
-
How to minimize risks and manage trades.
Day trading can be a thrilling venture until you start depleting your account. Surely, you don't want that to happen. That's why, before you even contemplate trading with real money, it's necessary to master proper risk and trade management.
Choosing the right stocks is the first step to effectively managing your risk. As mentioned earlier, you'll want to focus on stocks in play. Make it a point to avoid stocks that don't fall into this category.
Reducing your risk further involves finding a solid setup that offers a profit-to-loss ratio of at least 2 to 1. In such a trade, you'll risk 100 dollars with the potential to earn 200 dollars in return. Steer clear of trades with a ratio of less than 2 to 1.
Next up, establish a stop loss. It's absolutely crucial to define your stop loss every time you enter a trade. Otherwise, your judgment may be clouded by emotions, leading to greater losses than you can handle. It's also important that your stop loss in any trade doesn't risk more than 2 percent of your account.
Managing risk also requires defining your share size. You can base this on your daily target and account size, but as a beginner trader, starting with the standard lot of 100 shares is advisable. You can also calculate your maximum share size in three simple steps.
The first is to calculate your maximum dollar risk. Keep in mind that this shouldn't exceed 2 percent of your account, so for a 50,000-dollar account, that's 1000 dollars.
The second step is to determine your maximum risk per share in dollars. Let's say you're risking 50 cents per share.
Then, the third and final step is to divide 1000 dollars by 50 cents. This gives you a maximum share size of 2000.
Aside from managing risk, trade management itself is also essential. After entering the trade, don't just watch until the stock reaches your stop loss or profit target. Use the new price action to decide your next move. If things go well, consider buying additional stocks. Then, sell parts of your stocks at various target points. If things go south, avoid buying additional stocks in the hope of minimizing your losses. Exit the trade immediately.
Another important thing to note in day trading is that managing risks and trades involves more than just applying technical analysis. Probably the most crucial aspect of risk and trade management is understanding the psychology of trading.
How you think and behave plays a pivotal role in your success as a day trader. If you want to start this career on the right foot, you need to shift your focus from making money to mastering the process. Consistent profits may not come immediately, so if you focus solely on the monetary aspect, you might become disheartened and give up. For now, consider acquiring knowledge and honing skills as your wins.
Being a disciplined trader, not an emotional one, is key. Don't let your emotions guide your actions during a trade. Have enough self-discipline to stick with your initial trading plan. If it's a loss, accept it early on.
It's also crucial to maintain both physical and mental fitness. The state of your body can influence your decision-making skills, so ensure you stay in top shape.
With all these tips in mind, you can effectively reduce your risk, increase profits, and boost your overall trading performance.
-
Day trading involves more than just buying and selling stocks. It's a venture that needs to be taken seriously if you aim to carve out a profitable career from it. Successful day traders devote time and effort to acquiring the right tools and knowledge, learning the nitty-gritty of the field, and perhaps most importantly, managing their emotions.
Yes, day trading is challenging, but that's no reason to throw in the towel before you even begin. If you're already passionate about the industry, then challenge yourself to give it a go. Take that risk. It might lead you to great things.
They say knowledge is power, but in the world of day trading, knowledge is money.
If you're here, chances are, you're seeking to swap your 9 to 5 job for the more flexible and financially rewarding career of day trading. You're not wrong – day trading can indeed provide you with both more time and financial freedom.
However, a word of caution: don't anticipate jet-setting across the globe after your first month as a day trader. Although day trading might appear straightforward, it's quite the opposite. To thrive in this field, you must first invest time in acquiring knowledge, and that begins with firmly grasping the basics.
In this book, you'll learn what day trading entails, how to prepare to become a day trader, and the strategies for consistent profitability.
-
Day trading 101.
Day trading is a specific form of stock trading that occurs within a single day. Unlike investors and swing traders, day traders don't hold onto any stocks after the market closes – they close their positions during the trading hours of the same day. This strategy is employed because day traders take advantage of momentary price fluctuations. They focus on how a price moves within seconds or minutes, rather than a company's performance over months or years.
There are two main strategies to profit from day trading: buying long and selling short. Buying long involves purchasing stocks at a relatively low price and selling them when the price rises. On the other hand, selling short means borrowing stocks from your broker at a higher price, then returning them when the price falls.
Contrary to popular belief, day trading won't make you enormously wealthy overnight. The reality is that you probably won't see consistent profits until after about six months or so. And even to see those results, you need to take day trading seriously. It's not a casual hobby you can engage in when you have ten minutes to spare – it's a business that demands considerable time and energy.
Just like any other business, success in day trading requires proper education. You'll need to read books, attend courses, and perhaps even enlist the help of a mentor. Joining trading communities and chatrooms can also be valuable, as the members can readily support and teach you their strategies. Some chatrooms even offer the opportunity to watch others trade live.
After you've grasped the fundamentals, it's crucial to spend time practicing on a simulator platform before going live. A simulator is similar to a real trading platform but uses imaginary money. As a good rule of thumb, you should practice on a simulator for a minimum of three months. Use this time to refine and perfect your trading strategy.
In addition to education and practice, you'll also need the right tools to get started. The three most important ones are probably your broker, trading platform, and scanners. Your broker is essentially a company that allows you access to a stock exchange via a website or mobile app, for a fee. To start trading, you'll need to create a brokerage account with your chosen broker and fund it. Look for a direct-access broker that offers speedy order processing, as trades can occur in mere seconds.
Next, you'll want to identify a trading platform. This software is where you place your orders. Once your order is sent to the stock exchange by the trading platform, your broker then fills it for you.
Finally, there are the pre-market scanner and the real-time intraday scanner. These are programs that provide you with a list of potential stocks to trade. Both can be configured to find stocks that match your predefined criteria, so all you have to do is review the list and decide which ones to trade.
Day trading can be a rewarding venture, but only if you approach it with dedication and a willingness to continuously learn and improve.
-
What day trading strategies to employ.
Your trading strategy is your game plan, the tool you’ll use to enter, potentially gain profits from, and then exit a trade. If you’re just starting out as a trader, the author recommends two novice-friendly strategies: the ABCD pattern and the opening range breakout.
Let’s dive into the ABCD pattern first. It’s both a classic and basic strategy that consists of four points. It starts at point A, where you’ll notice a rise in the stock price, climbing to point B, the day's significant new high. The price then starts decreasing until it settles at point C, a price still higher than point A. From C, the price again ascends to a new high at point D.
When using the ABCD Pattern, begin by observing a stock showing an A-to-B trend. Avoid jumping the gun – simply observe until it reaches point C. When the price stabilizes at this point, enter the trade as close to point C as possible. Next, set your stop loss just below point C, minimizing any loss if the price drops below C. Conversely, if the price starts rising to point D, seize the moment. Sell half of your share size at point D and shift your stop loss to your entry point. Then, sell the remainder of your share size either at your target or when you sense the price will drop again. Typically, this decrease is signaled by a new low price on the stock’s five-minute candlestick chart.
Now, onto the opening range breakout, or ORB. This strategy hinges on the opening range, the price difference between the market opening, and a set time afterward. An increase or decrease in price beyond the opening range is your cue to enter the trade. The waiting period varies by trader, but if you're a beginner, try to hold off for five minutes or longer – thirty to sixty-minute periods are generally great starting points.
For the ORB strategy, start by monitoring your shortlisted stocks for the first five minutes of market opening. Look for clues such as high volume with various orders, price direction, and the stock’s opening range. Ideally, the opening range should be lower than the stock’s average true range, or ATR, which is visible in your scanner program.
After the initial five-minute period, check whether the price moved up or down from the opening range. If it’s gone up, go long and set your stop loss just below the volume-weighted average price, or VWAP line, a key indicator for day traders that should already be marked on your trading platform.
If the price has decreased, go short and place your stop loss just above the VWAP. For either position, designate your profit target at the next substantial level or when you anticipate the price will start to reverse.
While the ABCD pattern and ORB strategy are good starting points, a myriad of day trading strategies exist for you to learn and implement. It's wise, though, to master one strategy before moving on to the next. Stay committed, assess how it pans out, and along the way, you might find yourself modifying the strategy to craft a new one fitting your style. That’s what distinguishes you from other traders and can lead to consistent profitability.
-
How to complete a successful trade.
For your trades to be successful, knowing and following your trading process is essential. This involves not only the trade itself but also what you do before and after the market opens and closes.
The first step is to start your trading day hours before the 9:30 a.m. New York open. This early start prepares your mind and body for the day's mental demands. Incorporate some aerobic exercise, hydration, and a meal into your routine, and aim to be at your desk two hours before the market opens.
Once you're at your desk, it's time to build your watchlist of stocks in play. In the world of day trading, stocks in play are those less affected by computer algorithms and large institutional traders. Instead, they're the focus of day traders like you.
Identifying such stocks involves several steps. First, they're moving against the general market trend, usually driven by a fundamental catalyst or recent news. They might have released earnings reports, launched significant products, or announced substantial layoffs.
Second, these stocks show pre-market trading activities that are unusual. Look for those with no fewer than 50,000 shares.
Third, they've gapped or moved up or down by over 2 percent pre-market.
Finally, these stocks reach significant levels within trading hours.
To refine your list of stocks in play, apply additional criteria. Target stocks showing a deviation from their normal volume with an increased trading volume. Look for an average daily volume of more than 500,000 shares. Your stocks in play should also have no less than 50 cents average true range.
To find your Stocks in Play, start with your pre-market watchlist. Ensure you've set up your watchlist program with these criteria. If you're part of a trading community, insights from member watchlists can be valuable. If you're using a specific strategy, however, real-time market scanners are recommended.
From your watchlist, select two to three stocks to focus on. Do this by researching all the stocks on the list first. Then, finalize your shortlist of two to three stocks 15 minutes before the market opens.
With your shortlist in hand, start crafting your trading plan. Look for familiar patterns in each stock's chart – patterns you've seen perform well in the past. Once you've identified these patterns, build your strategy around if-then statements. If a certain scenario occurs, then you'll take a specified action at a certain price point. This approach helps you define your entry, profit target, and stop loss points – the latter being the price point where you tactfully exit the trade when things aren't going in your favor.
Once you've laid out your trading plan on paper, patiently wait until the stock presents the right setup for entry. That's your cue to dive in and implement your trading plan. Once in the trade, sticking to your plan is vital. Exit only at your predefined points to minimize losses.
If you hit your daily profit target, or after making two or three trades, consider wrapping up your trading day. Avoid a trading spree of twenty or more trades in a day – limit yourself to two or three.
Finally, before ending your day, make journal entries about your trades. This practice helps you review and improve your strategy. Sharing your journal with your community or mentor for feedback can also be beneficial.
Your trading process might differ slightly from this, but what's important is your adherence to it and thoughtful execution.
-
How to minimize risks and manage trades.
Day trading can be a thrilling venture until you start depleting your account. Surely, you don't want that to happen. That's why, before you even contemplate trading with real money, it's necessary to master proper risk and trade management.
Choosing the right stocks is the first step to effectively managing your risk. As mentioned earlier, you'll want to focus on stocks in play. Make it a point to avoid stocks that don't fall into this category.
Reducing your risk further involves finding a solid setup that offers a profit-to-loss ratio of at least 2 to 1. In such a trade, you'll risk 100 dollars with the potential to earn 200 dollars in return. Steer clear of trades with a ratio of less than 2 to 1.
Next up, establish a stop loss. It's absolutely crucial to define your stop loss every time you enter a trade. Otherwise, your judgment may be clouded by emotions, leading to greater losses than you can handle. It's also important that your stop loss in any trade doesn't risk more than 2 percent of your account.
Managing risk also requires defining your share size. You can base this on your daily target and account size, but as a beginner trader, starting with the standard lot of 100 shares is advisable. You can also calculate your maximum share size in three simple steps.
The first is to calculate your maximum dollar risk. Keep in mind that this shouldn't exceed 2 percent of your account, so for a 50,000-dollar account, that's 1000 dollars.
The second step is to determine your maximum risk per share in dollars. Let's say you're risking 50 cents per share.
Then, the third and final step is to divide 1000 dollars by 50 cents. This gives you a maximum share size of 2000.
Aside from managing risk, trade management itself is also essential. After entering the trade, don't just watch until the stock reaches your stop loss or profit target. Use the new price action to decide your next move. If things go well, consider buying additional stocks. Then, sell parts of your stocks at various target points. If things go south, avoid buying additional stocks in the hope of minimizing your losses. Exit the trade immediately.
Another important thing to note in day trading is that managing risks and trades involves more than just applying technical analysis. Probably the most crucial aspect of risk and trade management is understanding the psychology of trading.
How you think and behave plays a pivotal role in your success as a day trader. If you want to start this career on the right foot, you need to shift your focus from making money to mastering the process. Consistent profits may not come immediately, so if you focus solely on the monetary aspect, you might become disheartened and give up. For now, consider acquiring knowledge and honing skills as your wins.
Being a disciplined trader, not an emotional one, is key. Don't let your emotions guide your actions during a trade. Have enough self-discipline to stick with your initial trading plan. If it's a loss, accept it early on.
It's also crucial to maintain both physical and mental fitness. The state of your body can influence your decision-making skills, so ensure you stay in top shape.
With all these tips in mind, you can effectively reduce your risk, increase profits, and boost your overall trading performance.
-
Day trading involves more than just buying and selling stocks. It's a venture that needs to be taken seriously if you aim to carve out a profitable career from it. Successful day traders devote time and effort to acquiring the right tools and knowledge, learning the nitty-gritty of the field, and perhaps most importantly, managing their emotions.
Yes, day trading is challenging, but that's no reason to throw in the towel before you even begin. If you're already passionate about the industry, then challenge yourself to give it a go. Take that risk. It might lead you to great things.
January 23, 2021
Dear future Day traders,
This book is more like a self-help book rather than learning how to day trade. However, I think the book is informative for beginners and easy to follow. I liked the lifestyle of the author and his way of thinking, yet there’s so much to read and practice before achieving the goal of this book.
To conclude, this book helped me with style of thinking which is a very important topic in trading, but it left me more confused about what I would do on the trading platform next time.
This book is more like a self-help book rather than learning how to day trade. However, I think the book is informative for beginners and easy to follow. I liked the lifestyle of the author and his way of thinking, yet there’s so much to read and practice before achieving the goal of this book.
To conclude, this book helped me with style of thinking which is a very important topic in trading, but it left me more confused about what I would do on the trading platform next time.
December 9, 2025
After reading this book I have a deeper understanding of trading as a business not as a gambling. Realized that I was gambling for about 4 months, so it is time to make a plan, stick to a set of rules and follow that.
It’s a month now since stopped trading with real money, buiding my own app for journaling the trades.
Back to demo after 1377,35€ tuition fee and experience gain.
It’s a month now since stopped trading with real money, buiding my own app for journaling the trades.
Back to demo after 1377,35€ tuition fee and experience gain.
August 10, 2025
Ce qui compte vraiment :
Take a walk or go for a run to help clear your mind.
The market will always be there.
You can come back to it.
And, of course, you must accept that some things are simply well beyond your control.
🚩💰🚩
Take a walk or go for a run to help clear your mind.
The market will always be there.
You can come back to it.
And, of course, you must accept that some things are simply well beyond your control.
🚩💰🚩
January 7, 2021
This book was available on kindle for a very small amount of money yet it is a book worth of paying much more especially if you are new to trading and want to learn more in order to get a basic idea of things. Being a book hoarder, I bought this book when it was on sale on kindle for 1.99$. The benefit to owning a kindle copy is that you can highlight sections and view just those highlights or share and reread your notes and highlights along the way when you need a little refresher.
This book was written with the idea that if a reader is already familiar with the basics, they can skip to the more pressing parts of the book. The first few chapters are just that. Chapter 6 onwards, he brings out the trading strategies and indicators that he uses to make a move.
He stresses that mindset is a very important thing, and so is discipline and sticking to the plan. The author clearly distinguishes between investing and trading. Several people enter the stock market (ie the stock market is a prime example) without being clear on what it is they are trying to do apart from growing their money.
He asks if we want to day trade (ie enter our positions during the first few hours of the market opening and close our positions in the stock market before the market closes?) in which case you’re a legit day trader... or hold onto the position for a longer period of time, ie overnight or more, in which case you’re swing trading. In either category, you’re still not INVESTING but trading. Trading is laborious, and a much more difficult task. He mentions clearly that there is a difference in strategy for each. You’ll need more time and education if you’re going to be a trader.
He explains the key difference between trading and investing. He cautions us not go into a trade with the idea of making money and balk we they get wrecked. It’s a competitive world out there. He talks about how retail traders can profit being around other retail traders, he says do not trade stocks dominated by HFT or institutions. He especially points out that sharing knowledge and strategy with other retail traders simply makes those strategies stronger and we will not only be doing ourselves a favor but others in the market too. He says programmers that have written software to carry out HFT for institutional players do not have any knowledge of trading strategies yet there are patterns, indicators and strategies that one can use to beat even the institutional traders. It takes great learning, practice and experience. The authors view is very positive, success is something that can be honed.
He describes the necessary tools one needs to be able to do this. You’ll need Stocktwits, a free trading view account at the very least, and a community of traders in order to profit from trading. This book will make more sense and seem less wordy if you are going to put what he says into practice, yet we will make mistakes along the way. It’s a skilled hand that can apply all of what he says to their trades and it takes years of experience. He says serious study is required before you trade with large sums of money else, all you are doing is gambling.. and if you make a few wins, you are simply getting lucky.
I’m going to be reading this book cover to cover, and will especially pay more attention to the parts that describe indicators and chart patterns and when they are to be used.
He talks about good money management, and the importance of sticking to a plan, to have defined entry and exit points before getting into a trade ie to have a plan of action that you tell yourself to stick to. He says that he’s not promising 100% success but success can be primed to occur most of the time and we must come to accept our losses for what they are and move on. He distinguishes between day trading and swing trading as well. I consider myself a swing trader, sometimes I day trade but not often or always. I have been guilty of holding a position too long in hopes that the price action will bounce back. He discusses such thinking and relates in easy to understand terms that realizing a small loss is better than a bigger loss which may take longer to recover from.
All of this sounds true, and I found myself silently agreeing as I skimmed through these first few chapters. I’ll updated my review as I get to the meat and bones of the book, which is the aspects on technicals.
This book was written with the idea that if a reader is already familiar with the basics, they can skip to the more pressing parts of the book. The first few chapters are just that. Chapter 6 onwards, he brings out the trading strategies and indicators that he uses to make a move.
He stresses that mindset is a very important thing, and so is discipline and sticking to the plan. The author clearly distinguishes between investing and trading. Several people enter the stock market (ie the stock market is a prime example) without being clear on what it is they are trying to do apart from growing their money.
He asks if we want to day trade (ie enter our positions during the first few hours of the market opening and close our positions in the stock market before the market closes?) in which case you’re a legit day trader... or hold onto the position for a longer period of time, ie overnight or more, in which case you’re swing trading. In either category, you’re still not INVESTING but trading. Trading is laborious, and a much more difficult task. He mentions clearly that there is a difference in strategy for each. You’ll need more time and education if you’re going to be a trader.
He explains the key difference between trading and investing. He cautions us not go into a trade with the idea of making money and balk we they get wrecked. It’s a competitive world out there. He talks about how retail traders can profit being around other retail traders, he says do not trade stocks dominated by HFT or institutions. He especially points out that sharing knowledge and strategy with other retail traders simply makes those strategies stronger and we will not only be doing ourselves a favor but others in the market too. He says programmers that have written software to carry out HFT for institutional players do not have any knowledge of trading strategies yet there are patterns, indicators and strategies that one can use to beat even the institutional traders. It takes great learning, practice and experience. The authors view is very positive, success is something that can be honed.
He describes the necessary tools one needs to be able to do this. You’ll need Stocktwits, a free trading view account at the very least, and a community of traders in order to profit from trading. This book will make more sense and seem less wordy if you are going to put what he says into practice, yet we will make mistakes along the way. It’s a skilled hand that can apply all of what he says to their trades and it takes years of experience. He says serious study is required before you trade with large sums of money else, all you are doing is gambling.. and if you make a few wins, you are simply getting lucky.
I’m going to be reading this book cover to cover, and will especially pay more attention to the parts that describe indicators and chart patterns and when they are to be used.
He talks about good money management, and the importance of sticking to a plan, to have defined entry and exit points before getting into a trade ie to have a plan of action that you tell yourself to stick to. He says that he’s not promising 100% success but success can be primed to occur most of the time and we must come to accept our losses for what they are and move on. He distinguishes between day trading and swing trading as well. I consider myself a swing trader, sometimes I day trade but not often or always. I have been guilty of holding a position too long in hopes that the price action will bounce back. He discusses such thinking and relates in easy to understand terms that realizing a small loss is better than a bigger loss which may take longer to recover from.
All of this sounds true, and I found myself silently agreeing as I skimmed through these first few chapters. I’ll updated my review as I get to the meat and bones of the book, which is the aspects on technicals.
February 17, 2021
Before this book I was a deer in trading head lights, now I feel I have a stable footing to work from! Honestly easier to read and understand than most fiction books.
April 12, 2022
Simple wording, clear, no bullshit, on point!! Perfect book for day trading beginners, too easy for intermediate traders.
November 4, 2020
Concise and honest book. Anyone interested in learning about stocks. Should read it
May 13, 2022
A good list of strategies and principles coupled with carefully highlighted warnings, useful for less experienced.
Displaying 1 - 30 of 341 reviews