The Math & Concepts Behind Making Big #DayTrading Returns

It's certainly feasible. It relies on 4 things:
- Number of trades
- Position size (well-controlled)
- Reward:Risk (doesn't need to be huge)
- Win Rate (doesn't need to be high)

Here's how to do it 👇🧵 Trading on a 5-minute chart or lower time frame, a decent price action strategy should be able to find on average 2+ trades per day (40 per month) in under 2 hours of trading.

That doesn't mean exactly 2 every day. Some days there are no good trades, other days there are many.

Struggling with impulsive or random trades?

Missing trades you should be in?

Try “commentating” the price action to stay engaged and focused on the correct things.

When I do it, it DRASTICALLY reduces my mistakes.

Here’s how to do it. 🧵👇 Commentating the price action is CONTINUALLY talking through the price action (or current conditions) as it relates to your strategy, while trading.

I do it out loud, or when that's not possible, I commentate with my own CLEAR voice in my head...

I started #daytrading in 2005.
I have been making a living from it since 2006.

Here's how I started out (with a prop firm) and was profitable within 1 year.

A thread 👇 In 2005, fresh out of university I saw a job posting that said something like "If you like playing online poker and video games, maybe you want to be a day trader."

I said, "Yup!" and applied.

3 interviews later I was in training to be a prop trader (in a office, not online)...

I’ve been day trading for almost 20 years…here are a few things you should know about #daytrading stocks. (I can only comment on what works for me. Take what you like, leave what doesn't resonate with you.)
🧵👇 1. Don’t trade during New York lunch hour. There is occasionally some good action between 11:30 am EST and 1:15 pm EST, but not enough to warrant trading through it every day...

I've been trading for a living for 18 years.

Here are key things I've learned along the way, I wish I knew earlier.

A thread👇 1. Trading isn't about more knowledge

Most new traders try to learn as much as they can. This isn't necessary.

Trading is getting good at 1 or 2 strategies, trading them over & over.

This requires discipline & persistence, NOT more knowledge.
...

I've been a #daytrader for 18 years.

Here are the key lessons I've learned that made me money and kept me in the game that whole time.

A thread👇 1. Control daily losses

Even with a great strategy we can be impulsive or have days the strategy doesn't suit the price action.

If I lose 3% of my account in day I'm done for the day. You may choose less.

That's equivalent to 3 losses risking 1% of my account per trade.

Day Trading Stocks On the 1-Minute Chart

It's simpler than you think.

Here's how to do it...within the first 30 mins of the trading day.
🧵 👇 Why trade the 1-minute chart?

Because you can often trade for 30 mins and get multiple trades with nice profit potential relative to the risk...

The Math & Concepts Behind Making Big #DayTrading Returns

It's certainly feasible. It relies on 4 things:
- Number of trades (a couple a day)
- Position size (well-controlled)
- Reward:Risk (doesn't need to be huge)
- Win Rate (doesn't need to be high)

Here's how to do it 👇🧵 Trading on a 5-minute chart or lower time frame, a decent price action strategy should be able to find on average 2+ trades per day (40 per month) in under 2 hours of trading.

That doesn't mean exactly 2 every day. Some days there are no good trades, other days there are many.

Our Daily Routine lays out what we need to do throughout the day to give us the best chance of following our Trading Plan.

Our Pre-Trade Routine puts us in the proper mindset to actually follow our plan and maximize performance.

Here's how to create these documents👇 Here's a daily trading routine example.

Update it as your trading and life change.

The idea is that the routine serves you, helping you trade your best.

If the routine starts getting in the way of that, revise it to suit your life/current mental state.

This is one of my favorite #forex and day trading patterns (I also use in stocks).

It occurs nearly every day on the 1-minute chart and it often occurs multiple times within a 1.5 to 2-hour time period (or however long you opt to #daytrade).

Get in and Get Out.
Learn it 👇 I call these RTs or RBs, which stands for Rounded Top and Rounded Bottom. The pattern requires specific criteria, but if you practice them, you'll see them almost every day.

I daytrade them on the 1-minute chart, but I also trade them on other time frames and various markets...

Create these 4 documents to keep your trading on a profitable track.

1. Trading Plan
2. Daily Routine
3. Pre-Trade Routine
4. Trade Checklist

2, 3, & 4 all work to reinforce our Trading Plan.

Here's how to create them, so you can improve your performance NOW.
👇👇👇 1. The Trading Plan details how we trade. Here's an example outline.

More details if needed: tradethatswing.com/a-complete-tra…

I've made my living off the markets since 2005.

Here are 12 Lessons for #SwingTrading Stocks, including:

-capital needed
-strategies
-position sizing
-when to avoid trading
-scanning for stocks
-And Much More...

A thread 👇📷 👇 1. How Much Capital to Swing Trade #Stocks

If you pay commissions, start with $5,000+. Need bigger profits to compensate for commissions (often a flat fee).

If you don't pay commissions, can start with $1000 or less.

To earn a decent side income, you'll need more.

I’ve been day trading for almost 20 years…here are a few things you should know about day trading stocks.
(I can only comment on what works for me. Take what you like, leave what doesn't resonate with you.)
🧵👇👇 1. Don’t trade during New York lunch hour. There is occasionally some good action between 11:30 am EST and 1:15 pm EST, but not enough to warrant trading through it every day...

When ranges form and price starts chopping around, that's when most people lose money.

Here's how to avoid getting chopped up, profit if the range is big enough, and still participate in the breakout.

A quick visual thread on "range rules."
👇👇 My #daytrading "range rules" generate great returns (combined with my entry signals) and save me from unnecessary losses almost every day.

There are two concepts:
1. Room
2. Inside or Outside Swing

Both are important for navigating ranges or choppy trading...

If you decided to withdraw your #daytrading profits daily, would that change how you trade for the better?

It can create a real sense of the profits & losses being real, not just numbers on a screen. This may help some ppl. Think about the concept to see if it would help you... An actual withdrawal doesn't have to take place. Profits could simply be transferred into another account with your broker. On losing days the profits get transferred out and back into the live trading account...

Struggling with impulsive or random trades?
Missing trades you should be in?

Try “commentating” the price action to stay engaged and focused on the correct things.
When I do it, it DRASTICALLY reduces my mistakes.

Here’s how to do it.
🧵👇👇 Commentating the price action is CONTINUALLY talking through the price action (or current conditions) as it relates to your strategy, while trading.

I do it out loud, or when that's not possible, I commentate with my own CLEAR voice in my head...

I've been #daytrading the $EURUSD for 14 years.

Here are 10 key day trading insights that have kept me in the game.

Including strategies, ways to improve, position-sizing, making rapid trades on the fly, and more.

A thread👇 1. When day trading #forex, I only trade the EURUSD.

It has enough movement, the smallest spread, and the biggest volume (which translates to less slippage on orders).

No need to waste time or effort on anything else.

Specialize and get good at one thing.

One of the greatest skills you can develop as a trader is the ability to create your own strategies.

Even if it's based on others' ideas.

If you can develop a strategy, you learn how to find your own answers, and you'll never be dependent on anyone for trading info.

Thread👇 When I started out #daytrading in 2005, I knew nothing about trading. I was fresh out of university.

I applied to a proprietary day trading firm (they give me money and take part of my profits)...and they ONLY wanted people who knew nothing/little about trading.

Why?...

I set up most of my #trading strategies for regular wins (45%-55% win rate).

The occasional single, lots of doubles, some triples.

With the chance of the odd home run.

I like this for my mental health.

Even just lots of doubles can add up to home run performance overall.
👇 Define what those doubles and triples are for you.

For me, typically they have a reward:risk of 2:1 to 5:1.

Home runs are 7:1+, and singles are the trades that don't act right so they get trailed out quickly.
👇

Here's how my strategies and the mental game of trading link up for me.

If you're struggling, this could really help.

It puts the control in our hands, not the markets.

Here's how to do it.

A thread👇👇 As I watch the chart I am collecting data points. Seeing if the market is exhibiting certain characteristics I want to see prior to a trade.

This is my strategy (could be any strategy): what the market needs to do in order for me to take a trade...

Use the 80/20 rule to trade more efficiently.

Swing trading or day trading.
👇👇👇 If you trade all day, likely 80% of the profits will come from 20% of that time spent.

Trade for 1 hour instead of 5 or 6.

Make 80% of what you were making but save 80% of your time.