I thought i summarize my experience so far day trading in case any newer folks are interested
Day trading is much harder than swing trading and especially at those lower time frames.
From 100+ day trades so far I am certainly no expert and I like being honest, I am on average losing but I learnt a lot. My thoughts so far are:
1. Forget 95% of youtube, it's full of turds just trying to market courses, **** out their channel. Same with forums, no matter what topic it is (fitness, languages), a lot of people lie their asses off and pretend they are experts but in fact know jackshit about it. Even the supposedly guru's are full of sh@t. For example the guy who wrote that best seller "Trading for a living", Dr Elder. He came up with his own "impulse system" and brags about it. It just MACD and Moving average, nothing more . Aslo on their own private forum (which I was on for $60 a month) the group consistently underperform the S&P and even their best Gold start traders barely out perform it. Everytime you asked a question you got told, "buy this extra course for $100's Its the same with Anton Kreil, $15k for a course? I have no idea if he is good or not but its seems to me that it's the easiest thing in the world to prove your validity. Publish your trading accounts, get them audited by an auditor, show tax statements, do live streaming etc If I was building a business as a trainer that's what I would do.
2. Having said that there is a lot of useful information that if you look at it objectively it can be great advice. Keep a word document and write down your own points. Ignore every cherry picked chart they show you (apart from the educational content), use your own, scroll back a 500/1000 bars and then start looking at the extreme right hand bar, moving forwards bar by bar and ask yourself "ok what will I do here", you will soon find out that even if you got the direction right, spreads, commissions, trend reversed too quickly, stops etc killed it . It will paint a very different picture than what youtube baseball-wearing-cap-on-backwards hipster is telling you.
3. Day trading is a job, not a hobby and a difficult one, you need to put in the hours, research, do your homework, keep a trade journal take notes and analyze what you have done etc
4. You are essentially trying to make cash like flipping a coin over the long run with one side weighted in your favour.
5. Forget working on hunches or "I think the stock price will go up / down" You are doomed to failure. A proper system is the only way
6. Risk Management is the most important concept by far in my view. The generally advice is never risk more that 1 - 2% on a trade. I personally think that is too much . I would keep it at 0.5% max until you work what you are doing. 8 losing trades in a row at 1-2% and it starts to hurt and self doubt really creeps in.
7. Demo always seems like a good idea but in reality it never worked for me. I put on trades forget about them, have no psychological connection to wins / losses. You need to use real money, even if it's just the bare minimum to see those losing ££ . I have put on 4 trades over last few days.All 4 were up 2 x Risk but because I am a total **** I didn't cash out and all hit stops resulting in 4 losses. It was only £80 between all 4 but the fact I got greedy (yet again!) annoys me
8. If your profitable with a year you're lucky. My aim is to just break even by christmas to see if I can sustain a modest living in this. I have income from other sources anyway.
9. The reality is that its a heck of a difficult job to make money day trading., Brokers like IG, and all the others make money by continual flow of clients coming in losing cash and eventually leave, hence the large marketing. I don't blame them, it's a business model, not a hippy self help group, but just be realistic.
10. Most news, ideas is **** and pointless. I worked in investment banking on the trading floor for 15+ years. Every Monday we had to come up with a trade idea for clients , Derivatives / inflation, bonds, 90% of them were sh@t, I know I wrote them, we just had to do something. It's the same with market news, broker webinars etc, trading channels / ideas etc, the staff are tasked to do something. More noise, more videos, more website hits, more trades = more commissions / sales.
11. Don't jump around from stock to stock, to FX, to crypto. I believe if you are not making money in two or three the problem is you, not the asset. They all have their own personalities, e.g. Coca cola barely moves, Tech stocks jittery as hell, respond to news, others hardly at all, so you need to spend sufficient time on see what influences what.
12. as above, don’t jump around with different trading strategies, 200 different indicators etc. You need to limit all the moving parts and focus
13. Best way I found to improve, (so far) , For every trade, I immediately write down why I entered the trade (note 5) , for example
Long MA Strategy
(a) Rising 200MA
(b) Rising 20MA ,
(c) 20MA crosses over 200MA
(d) price near 20MA
seems like a winner on paper but I still kept getting stopped out. Then afterwards write down what happened, e.g. after the trade exit I put screen shots of 3 time frames (daily hourly / 15min) into a PowerPoint and detailed where I went wrong. Several things became clear such as
- 2min charts was pointless, you would never make the spread back
- The risk / reward (1:2) was to high, a 1:1.2 would have paid off > 50% of the time .
- I was fannying around with stops, for no reason. etc
- I'm putting on trades because I'm retarded, e.g. long trade, on a bearish trend in larger time frame
The point being, you start to learn about your technique and they way you trade which no book can possibly know.
Heck it's boring but I am starting to see patterns about the way I trade (= c@ck up). The best traders I saw in banks were the OCD ones. The wannabe Burberry wearing chavs all got pushed out or sent to Starbucks to pick up the coffee
The million dollar question:
can you make money? At this stage, I am still undecided. I think there is light at the end of the tunnel but its going to require work, a plan and mental commitment for sure.
Anyway, long post but hope it's useful for some folks
(apologies for the obscenities!)