My Day Trading Journey

Episode 38 of the The Carter Farr Show podcast, hosted by Carter Farr, titled "My Day Trading Journey" was published on February 10, 2019 and runs 9 minutes.

February 10, 2019 ·9m · The Carter Farr Show

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Summary

Social Media: Subscribe https://www.youtube.com/c/carterfarr * Podcast: https://anchor.fm/daytrading * Books:  Active Trader: https://amzn.to/2I7Dpgv Swing Trader: https://amzn.to/2NBcvDI Day Trading for a Living: https://amzn.to/2IcrIcr Day Trading Patterns: https://amzn.to/2GwHDQk  * * Chat Room: https://discord.gg/RAnCPPj Basic Day Trading Tips Knowledge is Power In addition to knowledge of basic trading procedures, day traders need to keep up on the latest stock market news and events that affect stocks — the Fed's interest rate plans, the economic outlook, etc. So do your homework. Make a wish list of stocks you'd like to trade and keep yourself informed about the selected companies and general markets. Scan business news and visit reliable financial websites.  Set an Amount Aside Assess how much capital you're willing to risk on each trade. Many successful day traders risk less than 1% to 2% of their account per trade. If you have a $40,000 trading account and are willing to risk 0.5% of your capital on each trade, your maximum loss per trade is $200 (0.005 x $40,000). Set aside a surplus amount of funds you can trade with and are prepared to lose. Remember, it may or may not happen. Set Aside Time, Too Day trading requires your time. That's why it's called day trading. You'll need to give up most of your day, in fact. Don’t consider it if you have limited time to spare. The process requires a trader to track the markets and spot opportunities, which can arise any time during trading hours. Moving quickly is key. Start Small As a beginner, focus on a maximum of one to two stocks during a session. Tracking and finding opportunities is easier with just a few stocks. Recently, it has become increasingly common to be able to trade fractional shares, so you can specify specific, smaller dollar amounts you wish to invest. That means if Apple shares are trading at $250 and you only want to buy $50 worth, many brokers will now let you purchase 1/5 of a share. Time Those Trades Many orders placed by investors and traders begin to execute as soon as the markets open in the morning, contributing to price volatility. A seasoned player may be able to recognize patterns and pick appropriately to make profits. But for newbies, it may be better just to read the market without making any moves for the first 15 to 20 minutes. The middle hours are usually less volatile, and then movement begins to pick up again toward the closing bell. Though the rush hours offer opportunities, it’s safer for beginners to avoid them at first. Cut Losses With Limit Orders Decide what type of orders you will use to enter and exit trades. Will you use market orders or limit orders? When you place a market order, it is executed at the best price available at the time — thus, no price guarantee. A limit order, meanwhile, does guarantee the price, but not the execution. Limit orders help you trade with more precision, wherein you set your price (not unrealistic but executable) for buying as well as selling. More sophisticated and experienced day traders may employ the use of options strategies to hedge their positions as well. Be Realistic About Profits A strategy doesn't need to win all the time to be profitable. Many traders only win 50% to 60% of their trades. The point is, they make more on their winners than they lose on their losers. Make sure the risk on each trade is limited to a specific percentage of the account, and that entry and exit methods are clearly defined

Episode Description

Social Media:

Subscribe https://www.youtube.com/c/carterfarr

Podcast: https://anchor.fm/daytrading

Books:

Active Trader: https://amzn.to/2I7Dpgv

Swing Trader: https://amzn.to/2NBcvDI

Day Trading for a Living: https://amzn.to/2IcrIcr

Day Trading Patterns: https://amzn.to/2GwHDQk

Chat Room: https://discord.gg/RAnCPPj

Basic Day Trading Tips

Knowledge is Power

In addition to knowledge of basic trading procedures, day traders need to keep up on the latest stock market news and events that affect stocks — the Fed's interest rate plans, the economic outlook, etc. So do your homework. Make a wish list of stocks you'd like to trade and keep yourself informed about the selected companies and general markets. Scan business news and visit reliable financial websites.

Set an Amount Aside

Assess how much capital you're willing to risk on each trade. Many successful day traders risk less than 1% to 2% of their account per trade. If you have a $40,000 trading account and are willing to risk 0.5% of your capital on each trade, your maximum loss per trade is $200 (0.005 x $40,000). Set aside a surplus amount of funds you can trade with and are prepared to lose. Remember, it may or may not happen.

Set Aside Time, Too

Day trading requires your time. That's why it's called day trading. You'll need to give up most of your day, in fact. Don’t consider it if you have limited time to spare. The process requires a trader to track the markets and spot opportunities, which can arise any time during trading hours. Moving quickly is key.

Start Small

As a beginner, focus on a maximum of one to two stocks during a session. Tracking and finding opportunities is easier with just a few stocks.

Recently, it has become increasingly common to be able to trade fractional shares, so you can specify specific, smaller dollar amounts you wish to invest. That means if Apple shares are trading at $250 and you only want to buy $50 worth, many brokers will now let you purchase 1/5 of a share.

Time Those Trades

Many orders placed by investors and traders begin to execute as soon as the markets open in the morning, contributing to price volatility. A seasoned player may be able to recognize patterns and pick appropriately to make profits. But for newbies, it may be better just to read the market without making any moves for the first 15 to 20 minutes. The middle hours are usually less volatile, and then movement begins to pick up again toward the closing bell. Though the rush hours offer opportunities, it’s safer for beginners to avoid them at first.

Cut Losses With Limit Orders

Decide what type of orders you will use to enter and exit trades. Will you use market orders or limit orders? When you place a market order, it is executed at the best price available at the time — thus, no price guarantee.

A limit order, meanwhile, does guarantee the price, but not the execution. Limit orders help you trade with more precision, wherein you set your price (not unrealistic but executable) for buying as well as selling. More sophisticated and experienced day traders may employ the use of options strategies to hedge their positions as well.

Be Realistic About Profits

A strategy doesn't need to win all the time to be profitable. Many traders only win 50% to 60% of their trades. The point is, they make more on their winners than they lose on their losers. Make sure the risk on each trade is limited to a specific percentage of the account, and that entry and exit methods are clearly defined