What's up Everyone In today's episode? I'm going to answer a few questions about day trading. The first is what is day trading, How to make money, day trading, and how to start day trading. We've got the white board, we've got screen share, and we've got the camera. So before I jump in answering the first question of what is day trading, let me talk to you for one second about why I'm qualified to answer this question.

I am a day trader and I'm a profitable day trader. Now that's pretty rare. I should probably say my results are not typical. I printed out my most recent audit.

I have my broker statements audited at the end of each year and that right there is 9.5 million dollars with 159 000 of average monthly profit over the last 60 months. That's real money. Now again, I share that. not because I want you to assume that my results are typical, and not because I want you to assume that trading is easy because it's not, but I want you to know that the person that you're about to learn from right here today actually knows what the heck they're talking about.

because there's a lot of people that post videos on Youtube, tik tok, Instagram, and they don't have any profits to back up the things they're saying. I am in the trenches every single day trading the markets. So let me answer some of these questions for you. The first one is what is day trading and let's switch to the whiteboard.

So I'm going to answer this question with an example. So a day trade is simply when you buy and sell a stock intraday. So let's say you have stock and we'll just name it after. Maybe we'll just say Ross.

Let's say Stock Ross. You buy it at four dollars and then you sell it at 440.. that would be a ten 10 profit intraday and this type of thing happens all the time, especially especially on lower price stocks. Now, if you start trading trading stocks like Apple, Facebook, Facebook, Netflix, these higher priced stocks, they don't go up 10 intraday, but there's a lot of lower price stocks that do almost every single day.

And if we jump over the screen, share real quick. Just as an example of that, we can see that our leading gainer today is up 59 Dtst. Now that's a pretty big gainer for one day. So the whole idea of day trading is to try to find those types of stocks to trade to get in and get out before the end of the day.

Now the market opens at 4 00 A.m Eastern standard time. That's the beginning of pre-market and the market closes at 8 P.m That's the end of after hours. The traditional trading day is from 9 30 until 4 P.m But these days you could trade anytime pre-market And of course you could trade from your phone. You can trade from of course your laptop and so you can execute trades during the pre-market session from Nine Four A.m till 9 30 just as easily as you could if you wait until 9 30 and trade from 9 30 to 10 or 11..

So the whole idea of trading is try to capitalize on intraday volatility. So one of the things that a lot of day traders will do is within a very short period of time. In order to capitalize on what might be a relatively small move in a stock, they use a larger position. That's really the whole idea.

If you're a long-term investor, you know you would probably never put 50 percent of your account in one stock. That would not be good diversification. There would be too much risk in doing that, but as a day trader, we do that all the time. So if you're a day trader and you've got, let's say, a 2500 account.

if you put fifteen hundred dollars into one stock and that stock goes up ten percent, you're up 150 bucks. So you know this trade right here on um, on Ross, right? You're in with 50 of your account or whatever it is. At four dollars, you're out at four Four forty. That's position is up ten percent.

Your account in one day is up five percent. Now, if you know about the history of the market, the trajectory of the market over the long period of time has been seven percent per year. That's per year. All right.

So as a day trader, you know I mean it's not like our goal is to do seven percent per day, and to do that, you know, compounding. But the idea is to try to find one or two, maybe three opportunities each day to capture a stock that's moving and some profit from it. And so instead of using typical diversification of maybe one tenth of our portfolio in any single day trade, the way I trade is, I take one trade at a time, and I'll put a larger percentage of my account into it in order to try to capitalize on that relatively small move in price. Now hey, sometimes we end up finding stocks that go up 59, 60, 75, 100 in one day and those become the huge winners.

They don't happen all the time, but they happen frequently enough. You might not think so if you're new to the market, but there's a whole world of stocks pretty much every single day. They're making these really big moves and they're generally small cap stocks. They're not your Netflix, Facebook, you know, Apple, Tesla.

They're your lower price stocks between two dollars and 10 15 that are small cap companies. and they come out with news whether it's quarterly earnings or something like that. And all of a sudden, the stock can go up 50 or 100 in one day. So as a day trader, those are the types of stocks that we're really looking for.

So now the second question is how to make money Day trading. So what is day trading is simply buying and selling a stock intraday And the way to make money? Day trading is to find a stock that's going up and to buy it and sell it higher. Now, one of the things that's kind of interesting when you're talking about day trading is that by the time you're seeing a stock. So I run these scanners and these scanners which you can see right here are searching the market for stocks moving up right now.

So this stock marps just hit my scanners so I can pull up the chart on it and I can look at the chart and I can see that this stock is moving a bit. It's gone from 820 up to about 9.50 which is more than 10 in less than five minutes, which is a pretty impressive move. One of the last stocks that hit the scanner was Indu, so Indo went from 15 to 18. That's 20 a 20 move in about 20 minutes.

So as a day trader, what you're typically going to be doing is buying high and selling higher. You're buying something that's already starting to move. So I think of this sort of as like a wave and you're jumping on the wave. It's already building some momentum and then you want to ride that wave, but get out before it pulls back.

So you sort of think of these stocks as waves of momentum, They increase in volume, They increase momentum, they get that nice big move, and then they start to pull back. which is really exactly what you can see on this chart right here. This nice increasing move as it goes higher and right here. it's now on the pullback.

So the idea with a day trade is that this is enough volatility to potentially be profitable, right? You've got a high here of 1874, and you've got this area back here that was at like 1523.. So that range right there. That's enough range to make money. So your goal as a trader is to try to find those types of stocks basically in real time and buy high.

Ultimately, you're never going to buy a low. As a day trader that's investing, that's like a Warren Buffett thing. Within the confines of one day, a stock is not going to go from low to high. It'll go from high to higher.

It'll go from low to lower. But it's not going to go from low to high within just one day. That's just not the way it's not. It's too short of a amount of time, and so what we're looking for as a day trader is to find something that's already started to move and to buy it on.

Hopefully a pullback. Which I don't want to get into too much of the nitty gritty here, but that's the idea is to buy a little bit of a pullback, on the wave and then get in for that next wave higher. So the way to make money trading is pretty simply to find the right stocks to trade to get in and then sell for a profit. Okay, that's very simplified and it's obviously easier said than done.

The reality of trading is that most traders somehow manage to lose money. They jump into the market at all of the wrong times and they lose money. And the reason is because they don't follow any strategy, they just shoot from the hip. They follow emotions, and this is an area where the market will trap you.

it will trick you and what traders end up doing. And it's a chronic mistake for beginner traders and even seasoned traders is they will watch something starting to move and they don't get in, they don't get in and then it finally is up a lot. Which means they miss the whole opportunity and they get in. And if they have a profit because they got in so high, they're nervous that the profits could disappear and so they sell it immediately.

So their profits are tiny. But if they get in and it draws down and it pulls back like on this big red candle right here, they end up holding on the pullback. Why? Because they're afraid of actually having a real loss and so they keep holding until it turns around. What successful traders do is they wait for opportunities to buy pullbacks and then they sell into strength.

So essentially, that kind of is a little bit on a very micro scale of the whole Warren Buffett theory of be greedy when others are fearful. and when others are greedy, be fearful. So when a stock has been strong, but then momentarily pulls back, it's it. Sort of reflects a little bit of fear.

People are a little scared. It's pulling back. it's dipping. That's the place that I want to be a buyer.

I want to buy that micro dip to ride the next leg up. Now for those that are curious, I will put a link, um, in the description and let's see, I'll jump over to the whiteboard down the description. I'll put a link to download my micro Pullback Strategy Pdf. All right.

So it's a Pdf right here. and it's a strategy Pdf that actually walks you through the strategy that I trade around micro pullbacks and just to show you a visual what that would look like, let's pretend that this stock that we just talked about has squeezed up here from 350 up to 370 380 and pulled up here to about four. and then it dips down right here. and this is the area that I would consider the micro pullback and I want to be a buyer.

Right here to ride the next wave higher. And if it goes all the way up to here, that's fantastic. So let's say the entry was right down here at four dollars and up here is you know, 440. that right there is your 10 move.

What so many traders do is they buy right up here. They hold through the pullback and if it keeps going lower, they end up losing. Or if it goes back up, you know. Okay, they make money.

but their entry is terrible. So timing is critical. As a day trader, Ultimately, timing is one of the most important things. You have a stock that's moving.

Can you time your entry and your exit? well? So if you can, you'll make money. and if you can't you'll lose money. I mean it's kind of as as simple as that. So now let's talk about the third question, which is how to start day trading.

So there's a couple different approaches to this, but I'll sort of lay out for you what I would do if I were starting over today. If I was going to start over today as a brand new trader, I would probably do things a little differently from how I started years and years ago. The first thing I would do is I would not put real money into the market until I had first proven I could be profitable in a simulator. And this is like it seems like so logical.

I mean you don't fly a plane without practicing in a flight simulator and doing hours and hours And hours more than just two or three. But you know, probably hundreds of hours of training you wouldn't perform surgery before you know, doing your residency and watching other people do it. And this I mean. it's just like there's a process of how you learn to do things that are difficult and that require a pretty high level of experience.

And then there's the way that most people start day trading and the way most people start day trading is. they open an account on their phone, Robinhood, E-trade Ameritrade, and on their phone, they tap the buy button and they're in. And just like that, money's on the line and you know why traders are inclined to do that. It's because they want, they want it fast, they want to make money quick, And I can tell you after years of doing this, there's no shortcuts.

You're not going to have quick money, you're not going to be able to blindly follow me or anyone else and just make money overnight or within like five minutes. You need to pay your dues. And so if you actually want to learn how to day trade, your best bet is to set up a simulated trading account. And in that simulated trading account.

So a pretend Money account. And you could do this with Td Ameritrade. I do have a simulator that members over at Warrior Trading use, but it has real-time market data so it costs money with Td Ameritrade. they often will let people with a very small account even like 500 bucks use the simulator that they have for free.

It's not perfect. It's not as good as the simulator that that I use, but you know it. It can work if you want to start and you're on a budget. So practice is a simulator and what you want to start practicing is test out a strategy.

So like that micro pullback strategy Pdf: Try trading that in a simulator and see if you can make money doing it. Because here's the thing. If there's someone else out there that has this blueprint and they're making money trading, then you want to try to figure out what they're doing. You want to see if you can replicate it.

It's not about blindly following. it's about actually understanding how they're getting in and out, how they're trading the market. This would be the same if you're going to open a coffee shop. What makes sense? It probably makes sense to look at a business model for coffee shops because it's a proven business model, but yet there are some people that open a coffee shop and go out of business.

They fail, so it seems like some of those failures are somewhat avoidable if they take the time ahead of things, to really research what they're getting into, and to really think about it carefully. So I think the best way to start day trading is to set up a simulated trading account and to practice trading a strategy that someone else has already proven is profitable. Now, whether that's mine or someone else's you do as you'd like. But the whole idea here is just to kind of get your feet wet to see whether or not you feel like this makes sense and you can do this.

So let me jump over to the charts and let me just show you a couple of things here. So one of the things that I do each morning is I try to find the right type of stock to trade. This is one of the most important things you'll learn as a aspiring trader is that 99 of the stocks in the market on any given day are not good stocks to try to day trade because they won't have enough intraday volatility. They'll move, but they won't move enough.

You know, this is a stock that went up 30 percent if we look at our um, so these are the scanners that I use here. Um, so we can look at top gainers right now. So our top gainer scanner right now shows Agris holding at first place as a 44 Gap, then you've a 44 Gainer. you've got Awh at 41 Dtst is pulled back.

Is it 35 now versus a Gap pre-market of 59? And this is some lingo, gaps and stuff like that. You'll learn that the more you tune in, the more you kind of study and watch the markets. You can also subscribe because every morning I go live on Youtube for the morning show so you can watch the morning show and that's when I break down my watch list, All right. So my goal is to try to find these stocks as early in the morning as possible.

And so what I do is I have a system of scanning the market and that's what this all this software is. If you're not familiar with it, this is stock scanning software. So this is actually searching the market in real time. Kind of like radar.

It's searching for something moving. If something starts moving, I'm going to get audio alerts and it's going to pop up right here. I'm going to be able to pull up that stock really quickly. So Marps Indo, you know, these started alerting.

Let's see, Indo started alerting down at what was it? 15, 15, 73, 1565 and it kept alerting right? The fact the stock kept alerting, kept alerting, kept alerting. It gave multiple opportunities to see that stock moving in real time. And then the question is, you know, was there a micro pullback that you were comfortable with that you were able to take a trade on and then how did you perform on that trade? So the way I kind of break down stock selection, uh, and I'll back this up. There's a couple of criteria that I look for.

So in order to find a stock that I think has the potential to do something like this, right to go up at least 10 percent. What I'm gonna do is, I'm gonna look for stocks Number One Price Between uh, two dollars and twenty bucks. By looking at this price range, this these stocks a two dollar stock. For it to go up 10, it only needs to go up 20 cents.

That's very achievable if the stock has a catalyst. So what's a catalyst? This is, um, in parentheses News. All right. So over here.

What I'm searching for on these stocks is what's the headline? So Dtst This one. I pull it up on Warrior and I pull, uh, scroll down here and I can see that we've got headline right here. So this was earnings. That was the headline this morning reports a 230 percent, 236 percent increase in revenue and achieves profitability.

So that's a catalyst That's a real stock. A real company that is putting out news right. And that's what sent the stock up sixty percent. Now the thing is, this news was posted at Seven A.m.

Okay, now we know that pre-market starts at 4 A.m So let's look at the chart. Dtst. So and let's look at 4 A.m This is pulled back a little bit or 7 A.m so the news comes out and pretty much immediately it starts squeezing up. And so that right there gives you multiple opportunities to see the stock in real time.

So the price on this is right. Okay, the price is between 2 and 20. it's got a catalyst, it's got news, and the number three. One of the things I look for is relative volume five five times or higher.

So this is an interesting calculation. relative volume. What this does is it tells us the average volume of the stock over the last period, over a fixed period of time and then what the volume is today. So yesterday for instance, this traded on 30 000 shares of volume and today has is that 60 million shares.

So the relative volume is ridiculous. and this is going to show Actually is 1167 times relative volume over on my scanner right here. So 1167 times relative volume. That's Huge.

That certainly meets my minimum of being at least five times higher. But the fact is, if we look back at this scam, we'll see today. In the entire market of thousands and thousands of stocks to trade, you know there's less than probably 20 that have relative volume of five times are up. So just like that, in terms of finding stocks to day trade, I've whittled down from 5 000 stocks or 7 000 stocks down to about 20 just with one filter.

One filter relative volume and now you filter again. you add a price filter on it. You have the price filter between two and 20. You add a couple more filters and next thing you know, you've got a list of three or four stocks and those are the ones that you want to be watching Very, very closely.

So if we go back to the whiteboard at the top, you know the basic question is: what is day trading? And day trading is the simple act of buying and selling within a very short period of time. With the goal of producing profit and the way to make money, Day trading is to find stocks moving quickly and to be able to get in and get out capturing a profit. You want to make more than you lose on average, and you want to win more frequently than you lose on average. And this, all of this goes back to Metrics.

So you know I've got my Um, you know my broker statements here, which are over on the Warrior Trading website, But I have a long history of data from my trading that I can review and I can look at those metrics and from those metrics I can draw insights about what time of day I perform the best, what price range, stock I trade the best? Uh, what? Um, we've got time of day. We've got price range. We've got What my accuracy is what my average profit to loss ratio is. So all of that data really is pointing me in the direction of what I should focus on and what I should avoid.

So the idea is to double down on what you're good at. and if you have things that you're losing on that you're not doing well at to cut those out. And the best way to start is by practicing in a simulator. Practice trading in a safe environment where the losses won't cost you actual money, but it gives you the opportunity to begin learning these early lessons about what works and what doesn't work.

That's the best way to get started. So I do encourage you to download my micro pullback strategy Pdf. It's going to be down in the description. I think you guys will enjoy that.

Uh, I encourage you to practice trading in a simulator and I'd I'd love to have you subscribe to the channel and tune in for the morning show or watch some of my live trading archives where you can go back and actually see me trading. A stock that would have met the criteria for being the right type of stock to trade is of course a day trade. and on some of those days I actually make money. Now some of those days I lose money just like anyone else.

You know, there's no such thing as 100 accuracy. You can actually be a trader and lose money thirty forty percent of time. It's very typical. The accuracy usually is like sixty to seventy percent for for decent traders, so that's part of the deal.

You just have to learn to be really good at cutting your losses quickly. don't get emotional, cut them quick, and then focus on doubling down on the winning setups and letting your winners run. It's oversimplified, but as a at a very high level the whole idea for this video is just to talk to you about the basics of what is day trading, how you make money, day trading, and how do you get started as a beginner. If you want to continue learning and you like this episode, I'm going to put two more recommendations right here of videos you should continue watching.

So there'll be one right here and there'll be another right there. So keep studying, keep learning, and I'll look forward to seeing you in the next episode.