Day Trading Advice for Today

Are you looking for day trading advice? Making big money and beating the market is possible. But you need the proper rules and attitude to play by. If you’re looking for day trading advice for today and beyond, you’ve come to the right place. In this blog, I’ll dispel some common myths about day trading and one fantastic place to start with little money. 

Who Are the Successful Day Traders?

Day Trading Advice

Let me start by telling you what they’re not. They’re not the ones flying around in jets. Some are, but that’s not the norm. They’re not the ones flashing their money around on Instagram.

They’re not the ones throwing down huge money without carefully analyzing their trades. In fact, they’re not born lucky. When Richard Dennis, legendary commodities speculator, was asked how much of a role luck plays in trading. His response was” “Zero, absolutely zero. I don’t think anybody winds up making money in this business because they started out lucky. “

Successful traders are the ones who follow their rules and do not deviate. It shouldn’t matter if the trade feels good or bad. All that matters is that it meets your criteria; if yes, you take it; if no, you don’t.

Please keep it simple, follow your plan, and do not deviate. So that can you take away from that? Day trading advice 101: plan your trade and trade your plan. Do I need to be rich to start day trading?

What if I told you that you could start trading with as little as $500, would you believe me? Contrary to popular belief, you don’t need deep pockets or access to a trust fund to start trading. Undoubtedly, futures can be one of the most accessible markets for day traders.

Day Trading Advice With a Small Account

Did you know that you can open an account for $500 and start day trading micro emini futures? Will you get rich quickly? Likely not, but that’s not the point. You want to learn how to grow your small account first. So you can start with futures trading strategies.

My thought is that if you can’t make money trading a $500 account, there’s no way in hell you can manage a $5000 account.  If I was to articulate day trading advice here, it’d be that you can’t successfully manage a large account if you can’t manage a small one.

We see it so often in the trading community. People come in expecting to get rich. Not only quickly but by mirror trading. They just want to place the same trades the seemingly successful traders are. And hope they make just as much money.

All without realizing that account size and positions are going to be different. And they’re getting in their trade then telling you. So you’re getting in after them. They sell. And then tell you. So you’re also selling after them. Which is why our day trading advice would be to learn to trade on your own. Without the help of the “gurus”.

What Is the Best Market to Day Trade?

My day trading advice would be to look at Emini futures. In fact, they’re my favorite market to trade. Why you might ask? Pretty much anyone can trade micro e-mini futures now because of their affordability (i.e. lower cost and margins).

They’re cheap and won’t cost you $50 each time a trade moves against you one point. In fact, the /MES is 1/10th the size of their respective “normal-sized” counterparts (i.e. ES, NT, RTY, and YM). Check out the image below from CME Group.

Day Trading Advice

Let me put this day trading advice in perspective. One standard E-mini futures contract (ES) is worth $50 USD * the agreed-upon E-mini futures price. Since futures move in ticks, each tick movement in the E-Mini S&P 500 is worth $12.50. Like I mentioned above, a five-point move in the wrong direction will cost you $50, ten-point, $100.

In comparison, the MES is only $5 USD * the agreed Micro E-mini futures price. And with micros, a five-point move equates to only $25. With the right strategy, you can easily capture 5 points and quickly grow your account. For more information, check out this great fact sheet from CME group.

Day Trading Advice and Margin Requirements

Depending on your broker, day trading margins can vary by broker. Luckily, micro E-mini futures have some of the lowest day trading margins, only $50 with some brokers. This means you only need $50 in the account (plus room for price fluctuations) to buy/sell one micro E-mini S&P 500 contract.

Is Day Trading Really Worth It?

You see the glitz and glamour that’s touted with day trading on social media. What they don’t show is the risk. But then any type of trading is risky. So you’re going to see day trading advice that says to never start. Or you’ll see the opposite. It can be overwhelming with the amount of advice and opinions out there.

We think that day trading is worth it when you’re disciplined. But that requires reining in your emotions. Trading with manageable positions that allow for a realistic risk/reward ratio. Don’t bet the farm if you don’t want to lose the farm. If you trade smart, you’ll last much longer than the average trader. I’m talking directly to you crypto and potstocks traders especially!

Quick and Easy Day Trading Advice

  • Do not let emotions fluctuate with the ups and downs of your account balance;
  • Judge yourself not by your outcome (i.e. account balance), but by your process (plan);
  • Keep it simple, strip your chart of indicators and try only two;
  • Know what you are going to do when the market does what it is going to do;
  • Never risk more than 2% of your account;
  • Know your exit point before entering a trade.

Manage Your Risk Or Blow Up Your Account

Day Trading Advice

Success in day trading comes from risk management. My cardinal rule, I never risk more than 2% of my account on every given trade.

My job as a day trader is not buying and selling stocks; it’s managing risk. If I only have $1000, I can’t risk more than 2%.

This case, which is $20. It may sound small, but small wins slowly but surely can and will add up. My day trading advice would be to set small goals.

Setting small goals means you have perfect bite-sized trades that don’t choke you. Plus you have something to work towards. And I’ve found having a goal helps you be more tactical. One of our members doubled her small account because they set weekly and monthly goals of what they wanted to make.

As a result, she didn’t trade just to trade. She looked at each trade and made the determination of whether or not it’d help her reach her goal. And within 6 months, her account had doubled in size. So setting manageable goals can and will help you trade less emotionally.

Three Steps to Managing Risk

Your job as a day trader is managing risk, not buying and selling stocks. How do you manage that? Well, you need to follow the three-step risk management process below.

Step1: I determine my maximum dollar risk for the trade I’m planning (never more than 2%). 

Step 2: I estimate my maximum risk per share, the stop loss, in dollars, from my entry (10 cents).

Step 3: I divide “1” by “2” to find the absolute maximum number of shares I can trade each time. 

How Can I Day Trade Without 25k?

Most of us starting out don’t have $25,000 to open a trading account with. But you can still day trade without $25,000. If you’re on margin, you’re subject to the PDT rule. This means only 4 day trades in 5 business days can be placed. You can look for brokers with no PDT rule.

This usually means an offshore broker. Or you can open a cash account and trade with cash. My day trading advice would be to start out following the PDT rule. If you can’t make 4 successful day trades, chances are, you’re going to blow up your account. Restrictions can be a good thing.

One Downfall for New Traders: Busy Charts

Have you ever been in a situation where you can’t see, understand, or focus because you’re preoccupied with minor details? We see it in new traders who are hyperfocused on picking the right indicator and can’t figure out why their strategy is not working. While they’re obsessing over which EMA to choose, 8, 10, 20, 200, perhaps if they just stepped back, they’d realize all of it doesn’t matter as the market is tanking on the news. 

When you are too close to a situation, you need to step back and get a little perspective. When you do, you will notice there was a whole forest you couldn’t see before because you were too close and focusing on the trees.

If your trades are going against you, one piece of day trading advice I can give you is this: take a step back, admire the forest and strip your chart of indicators. 

Choosing a Broker for Futures Day Trading

With one of the most integrated trading platforms and a charting software system, NinaTrader is popular among futures and forex day traders. Apart from the technical indicators, charting tools and research, NinjaTrader offers a free trade simulator. I’d be remiss not to mention the ability to create and customize your technical indicators along with algorithmic trading strategies. For all of these reasons, it’s easy to see why day traders like the platform. Furthermore, the ability to live trade for free wins big points in my book.

I also like that Interactive Brokers (IB) supports NinjaTrader and connects through IB’s Trading Workstation. However, this may cause lags in data when using NinjaTrader with IB. Likewise, if you trade with IB and want to use NinjaTrader, you’ll still need to buy or lease the NinjaTrader platform.

Are you still uncertain as to which broker to choose or new to trading altogether? Check out our video on How to Open a Brokerage Account, as well as our vast array of courses and videos for beginners to help guide you in your trading journey!

Where To Get Started?

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