Imagine if somebody handed you a briefcase with 47 000 in cash and it sets it on fire right in front of your eyes. It may seem unlikely, but that's exactly what happened to me when I shorted this IPO Or imagine if somebody told you they can make you a lot of money and all you had to do was follow them. So you did and then they end up stealing your wallet. That's what happened to me when I signed up for five different chat room alerts.

The point of me telling you these stories is that I learned some powerful lessons from each one of them. I Want to make sure that you don't repeat my mistakes and from these stories I've created four rules You need to become a profitable Trader I Have personally broken all those rules in the past before and that's cost me these fat lessons. Forty seven thousand dollars on Snapchat and seventy thousand dollars on Modern stock. As an elderly Grandma it is my job to let the new Traders stand on my shoulders and better the craft of trading.

So climbing on and get ready to learn from these four important rules to become a profitable. Trader Um, welcome back to another Humble Trader video. For those of you who are new to the channel, welcome my name is Shea AKA Humble Trader I've been trading for over eight years now. My YouTube channel is for you If you want the straightforward no BS approach to day trading with actionable lessons and strategies I Don't drive a Lambo because I drive something even more balling.

My family is Corolla So if you ever want to see me Flex with my Corolla on this channel, please do me a huge favor and smash that like button for me. Okay, that starts with the first trading rule to become a profitable Trader rule. Number one: Make sure you only have one or two indicators on your charts Yes You heard that right? Those pretty lines on your charts like the RSI, Histogram and Ichimoku clouds. They are probably not helping you.

When I first started trading, I was told to use numerous indicators to assist me with entries and exits. Some really common ones include the RSI indicator, the Macd cross, their 13 EMA and the 50 EMA pair, and even the infamous Bollinger Bands. So I spent months watching all these indicators and watching them cross. However, I neglected the one important thing that All Momentum Traders should know observing price action.

Price action is the true indicator that's gonna allow you to find entries, potential setups, and see subtle changes in the sentiment. Then you can decide whether you want to stop out to protect your Capital sell for profit or hold on to your position to truly maximize your wins. So let me show you how I set up my charts and indicators that allows me to really focus on price action. Okay, what are my trading view platform right now? Let me show you how I set up all my charts and indicators so as you can see I have my left hand side and right hand side with intraday chart.

Often the five minutes or the two minutes if I'm trading small cap stocks and the left hand side is the dating chart because as Traders it's very easy to have tunnel vision and only see what the stock is doing intraday without seeing the bigger picture. So that's why it's so important to have your daily charts open on the left hand side. So under intraday chart you're gonna have volume by default at the very bottom. All your platforms should have this.

How you add the indicator is go to indicator settings which you should have on your platform. So I'm gonna add the one indicator I use which is V-wap You may have to type in volume weighted average price on certain platforms and just click this to add the viewer You can see. You see it here now on a lot of platforms I believe like Cinco Swim Interactive Brokers even Weeble you're gonna see three lines and we don't want that like that's too extra right? We want one very clean V-wap indicator. so on my training video just double click.

You can see you get like the V web the upper band lower band. We don't want any of that BS Okay remove that same as the bands fill we don't need that you can see you have really clean one line which is the V-wap indicator we want for your trading strategies now. I want to change a look of my view app indicator so you can do this On most trading platforms you can see I can change the colors it changes to like green pink if I want to I'm going to keep it at blue but I'm gonna make the thickness a little bit more visible to see. and voila, that's how you have the intraday V-wap and the volume at the bottom.

My trading execution platform over here is Dash Trader and it's the same thing you can see daily chart on left hand side intraday. this is a way I actually Place trades level two um time and sales now I Also have just the V1 indicator and at the bottom of this I have the volume and the volume moving average I Don't use it all that much but it just kind of shows me when I have a volume breakout that lines up with my um with my view up indicator so you can do that. um I don't think you can do this on all your platform so check your own platform but on that Trader What you do is go to your volume bar and go come to configuration and display an average line. Okay you can do this with think or swim in the interactive brokers I don't know about the others uh and average I use 13 uh moving average for volume so whenever like voting breaks out on the selling side or buying side I see it as well on the on the on this volume bar down below.

So the key lesson here is instead of relying on memorizing patterns and a gazillion indicators to line up, I removed all of them and I became a Trader who's more focused on trading price action and I was able to turn my masses into more green days. so that's my suggestion for you as well. Remove most of your indicators, keep one or two that you really like. For me, these will be the V-wap and the volume you see over here.

This way you can actually focus on trading your plan which we're going to talk about later on and not get distracted by all those things lining up. If you have other indicator pairs that you like using just one or two, let me know in the comment section below and I'll take a look. The next trading rule we're going to talk about came from a painful lesson during my second year of trading: I Remember how happy I was after I started making a hundred dollars each day? I was excited and feeling really pumped. Finally, I'm seeing some consistent dreams.

Hey, 100 a day is 500 a week. Not bad for trading about only two hours a day and heading out to work. These small gains definitely added up to build my small account and remember I was still making a good income for my full-time nine-to-five job at the time. Then I started thinking hey, if I just size on my shares by adding a zero to my share sizes basically using 10x my normal size, then I will be making a thousand dollars a day.

That's five thousand dollars a week I will be banking I'm sure you have thought of this too, right? I mean I couldn't have been the only Trader who has ever thought of this genius idea. Well let's just say this overconfidence with Sizing Up didn't really end up that well for me. Not only did I lose all the small 100 profits from the last few weeks, I completely blew up my account because you see, I did not take into consideration the emotional stress the scaling up will create. If my risk was only 30 to 40 dollars a day to make hundred dollars, Suddenly now my risk is 300 to make a thousand.

And yes, while I wanted a nice number of five thousand dollars in one week in my trading account, I was not ready for the thousands of losses and those position sizes when scaled up way too quickly. They will lead to emotional trading. So here's the key takeaway: Traders Please consider taking your time when sizing up. Give it a couple of weeks or months before even adding a quarter size and then two times your size.

Let me show you a good way right now to calculate how much position size to take or gross account exposure you can take according to your account size. And this is especially important for managing a risk when you're trading a lot of different kinds of stocks. Let me show you how. so on the screen right here you're looking at the humble Trader Account Risk calculator.

So you can get this for free by signing up for my weekend watches with a link over here. Um, over here you're gonna put in your account Capital Let's say I'm trading twenty thousand dollars. or you know, ten thousand dollars. Depending on how much you're trading with your max risk per trade, you can change it here.

I'll say one percent is conservative. So if I'm I have ten thousand dollars, the most I should be risking is a hundred dollars per trade. If you are more aggressive, you can look at three percent or even five percent. You know I Don't really recommend five percent for most Traders But you know you figure out what's what you're comfortable with with a calculator here now.

But now what you do not want to do is allow new Traders Do this. They only have five thousand dollars, but they're swinging like a thousand dollars for each of their position sizes. You don't want to do that. That's how you blow up really quick.

Okay, so let's go back to ten thousand dollars. Let's say that's my account. Capital I'm conservative I Want to risk only two percent per trade? That'll be two hundred dollars. Okay now let's say if I'm you know I want to divide that Max risk per trade into all my trades for the day.

So you're gonna change this into how many trades on average you take per day. So let's say I usually take three trades per day. so that means I can risk maximum 66.70 per trade. So this is very important.

No calculate this and see what you're comfortable with. Um, now moving on down to this area. Over here we're going to look at the risk per share. so you know the maximum risk you can take which is 200 per trade.

So let's say I'm trading a stock like a large cap stock like Tesla or Nvidia where I need to risk a dollar per trade, right? So that's sorry. a dollar per risk per share. Then how many shares can I take? Well, the calculator tells you that 200 shares maximum according to my account size. Okay and let's say you're trading a low flow to Penny Stock You have to risk.

You know something less like 50 cents, You type that in. Then that means you can take 400 shares maximum. This is important because you want to make sure at least at the very beginning from six months to a year as a new Trader you're keeping all your risk constant. This is how you make sure one loss doesn't wipe out entire account because a lot of people they'll take way more exercises on the losing trades and only take a small amount on the trades that they win and really quickly.

down here you can see the one to one risk award profit Target That's it. You know I'm risking 50 cents and the only profit Target is 50 Cents one to one risk award. Yes, I could potentially make a 200, but is it really worth it if I'm risking 200 to make 200? Sometimes it is, sometimes it's not. But why you try to aim for and what I would recommend you to aim for is one to two or one to three.

Risk a word. Um, that's a PT stands for profit Target So if I'm risking 50 cents I want to try to see if I can make a dollar per share? Well, a dollar fifty. So that means I could potentially make 400 profit risking 200 with 600 profit risking 200 as well. And and you can play around with this.

just input your own account size. Let's say you're trading three thousand dollars. Uh, and then your aggressive risking five percent. This will be amount of risk you can take and then maximum number of shares you can take if you're risking 50 cents.

Obviously, that number changes depending on how much risk you're taking, right? Trading large cap stocks, you might have to risk a dollar to two dollars small cap stocks, you may only have to risk, you know, 20 cents. Then the share sizes would of course have to be very different. And if you're enjoying videos I like these, you like these kind of step-by-step demo. Then please make sure to drop a like down below.

I Really appreciate it and I'll make sure to make more videos like these for you in the future. Moving on to perhaps the most important rule you should always follow in trading. Always have a trading Plan before you enter the trade. Yes, the latter part is very important because most Traders myself included when I first started do the exact opposite.

They only start planning the trades after they've gotten in. In my first year of trading, I used to jump straight into trades, sometimes following chat room alerts like we talked about earlier and then only after I'm in the trade. Then I started to plan my profit targets risk and then worry about oh my God what's happening now what do I do Like the younger Shay and most beginner Traders we tend to focus on trading just to make a quick profit instead of trading the charts to make proper plans to follow. Okay, we're back on trading view right now.

Let me show you a very simple way to plan for your trades that's gonna include your entries key level profit Target and risk area so on the stack over here you're looking at Nvidia You should always start with you know, doing some simple technical analysis and drawing your key levels so you can see on this particular day um April 19th the stock act down after a very strong day the day before. So we're looking at these two days here, this day in particular April 19. you can see a gap down due to no meaningful news. Um and then you know a lot of times when the stock like this gap down with no news I'd like to buy the bounce so a lot of times you know the key level would be if the stock is able to break through that pre-market highest area over here you can see and then once above it it has potential upside to the Daily highs.

So yesterday's higher day was around like 279 area over here 279 and that little wick on the daily chart you can see over here that's 280. So I'm going to draw a line over there as well and you can see intraday Now intraday the stock was trading below the key level on the here on the pre-market highs and once it breaks out about the V-wap indicator which we talked about early on, a very useful tool. Um then it has the uptrend to the upside to the Daily resistance like we talked about. So this is a very simple way to use.

Use V-wap to buy the bounce on this very simple strategy. you're looking for stocks that either have gapped up or gapped down with no meaningful news once it breaks about V-wap If it has good upside in this case to 279 280, then you buy the pullback on each one of these dips once it's above V-wap Okay, not below. It has to be above V-wap So let's say I'm looking at trading the stock midday around 10, 50, 11 o'clock I see it trading above the web right above V-wab over here after some consolidation and remember if a stock is trading above the web, it's both especially has more upside. So I see the upside to 279 280s and over here.

You know it's over pre-market highs and over the view up area. so that's it. I Want to buy it here I Want to buy it here around 276 as close to view up as I could 276 t650s. and if the strategy is to buy the dip along V-wap I Know my risk needs to be below it, but not just right below V-wap I Want to give it let's say a dollar room for a stock like Nvidia that's very necessary.

So if I'm risking below V web over here 275 70s. So this is like what 70 cents? Almost a dollar per share. So let's I'm gonna make this red. So this is going to be my risk.

this is my entry the yellow line and then I know upside has room to 279 280s that we talked about. So in this case I'm risking a dollar right? I'm risking a dollar here for the potential upside to make. Uh, this is what 250 2.50 So this risk of word is one to two point five and if it goes to 280 or 281 it's like we planned out which it doesn't always go according to plan. Then it's gonna get us one, two, three and more one to three point five risk award.

And this is how you do the most basic trade planning process. You need to do this. Before you enter the trade, you have your entries, your risk, and your potential upside. If you will just do this for all your trades starting out tomorrow, you will be surprised how much better you can perform as a Trader Trading without a plan is like going to work with empty hands or getting married without the prenup.

Happy. I'm just kidding. Okay, okay that might be a really bad joke. If you really want to eliminate emotional trading over trading or Revenge trading, this is a number one rule to follow.

I Promise You By planning your trades and trading your plan, you're gonna be way less emotional, have less fomo, and you are going to have a lot more confidence as a Trader While I cannot make all of your trading plans for you, you can receive my weekend watch list with some potential trades for the next week. I'm gonna disclaim this: These watch lists are not buy or sell alerts for you to follow. That will be against the rule that we're going to talk about later in the video. These watch lists are plans that I make on the weekends that could potentially be in play the next week.

Basically, very similar to the trade planning we just did. and if you want to receive these free weekend watch lists, you can sign up through the link down below. It's the same link you saw earlier. Once you've signed up, you're gonna get a free trading Journey know the risk calculator and then we can watch this.

So a lot of goodies in the next couple of days. The fourth trading rule I have for you came from my early years in trading and I'm pretty sure some of you are really experienced in this. Yes, that's blindly following chat room alerts or signals or copy trading. I was once a Trader who subscribed to multiple chat room alerts while talking about small caps, low floats, penny stocks, big caps options, and I would blindly follow alerts to place trades without knowing any of the reasoning behind them.

And while I have made some small profits successfully following alerts during the times when alerts were wrong and lost everything and more. Essentially, I was making small wins, but big losses. And here are the real dangers with copy trading. and following chat room alerts, you're receiving signals from traders who have already made their move.

Meaning, most of the time they have already bought in the stock and have gotten the ideal entry. and if you're just following them, your entry is always going to be a few seconds behind. And if you're trading these low float small cap stocks, a few seconds can mean a big difference. Imagine this: Bob a trading signal seller bought the stock ABC at a dollar per share and told us 100 000 followers on Discord the signal to start buying right after he did.

Everyone will attempt to buy the stock at the same time and that's going to increase the price in a short amount of time artificially so there might be new Traders getting in at 105 110 or someone would be that dumb schmuck like I was buying at 140. And if the stock is a low float, the chances of this happening is even higher. And when Bob is finally ready to sell at 150, guess what happens? Do you think all 100 000 followers will get to sell at 150 or even at 120? That's rarely the case. Sadly, these people often knew Traders they're probably the ones buying the shares that Bob have just sold at 150.

these people will have to sell their own shares for a loss much later on as the price is driven downwards once everyone or 100 000 followers are trying to sell at the same time. Does this scenario sound kind of familiar to you? Yes, You should have been aware by now of the 100 million pump and dump scheme by a group of stock market influencers late last year. These influencers had huge followings on Twitter and free Discord groups and they were pumping many of these low float small cap stocks to their followers and then they will sell their own shares to them and make massive profits I Hope none of you ever have to experience this with your hard-earned money because number one, you won't know how to plan your own trades and ever trade sufficiently on your own. and number two, you will never have proper risk management.

but that's the reason I taught you how to do both of these things early on in the video so you won't need to resort to following charum alerts in order to day trade. The key takeaway here is avoid chat room alerts or text alerts like how I avoid my ex-husband my bag holder 500 feet away and really learn how to trade the right way for yourself. And by that I mean come up with your own trading plans, risk management profile and make your own informed decisions. When you rely on following chat room alert, you are essentially handing your money over to someone else.

Remember I Have to do so for my ex-husband but you don't have to going back to the first trading rule to become a profitable Trader Only use one or two indicators. You guys saw that I only use a V-wap indicator alongside with my volume to trade. That's the best way to really trade and read price action successfully as a Trader in my opinion of course. And if you want to learn more about how to use V-wap indicator to generate more profits I have a free crash course for you and I'll see you there.