How To Start Day Trading Rationally with Free Resources – DataDrivenInvestor

A comprehensive guide.

Photo by Daniel Lloyd Blunk-Fernández on Unsplash

Day trading needs discipline, focus, dedication, and consistency.

Before paying for any course first check out these golden free online resources. Maybe you won’t need a course after learning from these. I explain what are these, how to use them, and how to start. The huge amount of information can be confusing, but this guide clarifies the path.

Right now we are in a bear market. This is the best time to learn to trade because it gives a realistic view of the market instead of hype and unrealistic expectations. Also, learning in a bear market makes you a more experienced trader because. If you could handle a bear market then you have no problem in a bull market.

In day trading buying and selling happen on the same day. The holding period is usually from a few minutes to a few hours. Day traders take advantage of the temporary fluctuations in the price of stocks and other securities.

Day trading is not gambling and one of the main reasons many people lose money in the stock market is this misunderstanding and the way they approach the market. The other reasons are excitement, greed, and lack of knowledge.

My suggestions include YouTube channels, books, and websites. Let’s start with books. You don’t need to read all these books before trading. Read a few of them to put you on track and then you can read more alongside your trading.

  • How To Day Trade by Ross Cameron
  • The Complete Penny Stock Course by Jamil Ben Alluch (a student of Timothy Sykes)
  • How To Day Trade For A Living by Andrew Aziz
  • Trade Mindfully by Gary Dayton
  • The Little Book of Market Wizards: Lessons from the Greatest Traders
  • Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude by Mark Douglas
  • The Playbook: An Inside Look at How to Think Like a Professional Trader Paperback by Mike Bellafiore
  • An American Hedge Fund by Timothy Sykes
  • Warrior Trading by Ross Cameron
  • Humbled Trader
  • Data Trader
  • SMB Capital
  • StocksToTrade
  • Fractal Flow — Pro Trading Strategies

It’s like Wikipedia but specifically explains the concepts and vocabulary of financial markets and economics.

In the beginning, I suggest just learning and paper trading to see those lessons in practice and get a sense of how to use them. Paper trading means trading with fake money. I think all brokers have this option. Paper trading lacks the psychological aspect of trading which is the most important thing but I highly recommend first trying the lessons by paper trading.

Unfortunately, most people get FOMO (fear of missing out) and immediately start trading with real money and lose all of it after learning just a few lessons.

While You are paper training record the reason behind every loss and profit. This way you will know what setups and strategies work and what situations should be avoided.

Ask yourself:

  • How I could have prevented this loss?
  • How I could have spotted this opportunity?
  • What are the common features of my successful trades?
  • What are the common features of my unsuccessful trades?

For new traders, social media can be very dangerous. There are a lot of incorrect information, imposters, dishonesty, and hype that can lead to severe financial losses. In the beginning, I suggest staying away from social media and just focusing on learning. Later you can use it to get the market sentiment, news, and what other legit traders are thinking.

Big Things Can Have Small Beginnings

After you passed the mentioned steps, start with little money like $2000, and try to grow it. A %5 profit with $2000 is $100. If you could do it every they, at the end of the month you have $4000. Do this with $4000 and at the end of the second month, you have $8000. At the end of the third month, you have $16000. So you can get the idea behind my example. Surprisingly many people can’t see this picture.

Losing is part of the trading. The idea is to keep losses less than profits.

After some point, you should start taking out your profits. For example, if you have grown a $2000 account into a $30’000 account then you should take out part of it. Applying this idea depends on the financial situation of the person and varies for different people, so someone may take out $20’000 and someone else may take out 10’000.

The wise thing is to use some amount of money for making profits and then take ou that profit. That is because you will get tempted to use all the money in your account and consequently your losses get bigger and you may lose all those hard-earned profits and get back to square one.

At the beginning of your trading career, since you don’t have that much money in your account so you can’t take out your profits.

Don’t complicate it

There are many concepts, tools, and indicators for technical analysis but you don’t need all of them. Most professional day traders use just a few. The common ones are:

  • Demand, supply, support, and resistance are the most important concepts in technical analysis.
  • Volume
  • VWAP(volume-weighted average price)
  • 9 EMA(exponential moving average), 20 EMA, 200 EMA
  • After these, you will also learn about candlestick patterns, trendlines, and chart patterns
  • RSI(relative strength index)
  • MACD(moving average convergence divergence): You may not need it that much.

If you lose money in the early months of your trading journey, consider it the price of learning to trade. The goal is to minimize those losses as much as possible. It may even take one or two years to start making profits.

Your profits are gonna be small but over time as you become more skillful and grow your account, they will become larger since you will learn how to trade with bigger position sizes.

There are other tips that I would like to mention but I don’t wanna make it long so I will mention them in future stories. I write on topics that help us have a better life both financially (DeFi, business,…) and mentally (art, philosophy,…). You can enter your email to receive stories fresh out of the oven.

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