How to Do Day Trading

Do you know how to do day trading? Like riding the 9 ema or finding support and resistance. Those two things make you a great day trader. Do you feel a constant sense of being overwhelmed by the volume of trading information flying at you every day? What if I told you that day trading doesn't need to be complicated? If you answered yes, this blog is for you. I'm going to give you some practical ideas you can use to simplify your trading journey and show you why less is more in day trading.

Why Less Is More in Day Trading

  • Sometimes we can have too much of a good thing. And when it comes to trading, that's definitely the case. Over trading is such a thing. As a result, we have to KISS: Keep It Simple Stupid. When we do that, we'll find that we have much more success when it comes to day trading. 

1. Too Many Options

How To Do Day Trading

On a recent jaunt to my neighborhood supermarket to grab some crackers for a cheese board, I was faced with a dilemma. No, I stand corrected... 85 dilemmas. How is it even possible there are 85 different types of crackers?

Well, let me tell you. As I read through the product descriptions, I realized that some had sodium, other's didn't. Some were gluten-free, other's weren't. They came in large boxes and small ones. They came in bite-size and regular size. As someone new to trading, you'll quickly realize this dilemma is not unique to the grocery shopper. Should you trade off-VWAP? Which moving average should you use; simple or exponential?

What time frame should you use? The reality is, with hundreds of technical indicators, you're left with thousands of different combinations you could apply to your charts. 

Oh, and I haven't even touched on which strategy you should use to trade them. Will it be the bull-flag pattern, shooting star or ABCD?

Whether we're buying a box of crackers or trying to pick a day trading strategy, our everyday decisions - both big and small- have become increasingly complex due to the overwhelming abundance of choice presented to us.

How to Simplify Your Trading Day

  1. Contrary to popular belief, trading stocks doesn't need to be complicated
  2. Pick 1 or 2 strategies and master them
  3. One or 2 indicators is all you need
  4. Quiet the noise
  5. Be disciplined in all aspects of life

1. Pick One or Two Strategies and Master Them

You literally have hundreds of different strategies at your fingertips, and all are profitable under the right conditions. But your job isn't to trade them all.

Your job is to master one or two of them. The reality is, there is no best strategy among them; there is no right or wrong answer.

Just like there is no best car on the market, there is one that's best for you. Personally, some of my favorite strategies to trade are VWAP, opening range breakouts and the ABCD pattern.

Your job is to figure out which strategy you want to trade and master it. Here are some stock market books if you're a reader and want to learn more.

2. Pick One or Two Indicators

Likewise, you have hundreds of technical indicators to choose from. But, that doesn't mean you should use them all or worse yet, keep changing them to get "higher probability trades."

This approach doesn't work. What ends up happening is that you get a bunch of indicators telling you the same thing. Or worse yet, they give you conflicting signals causing you to second-guess your trading plan.

Limit your indicators to one, two or gasp.... none! If you take the time to learn how to read price action - the most timely market information - your technical indicators will serve little purpose.

LVS

3. Cut the Noise: No Financial News Allowed When Day Trading

When you day trade, your sole goal is to trade your system, that's it, that's all. To do this, you need the mental clarity to actually spot your setup so you can trade it.

With live chats streaming and news in the background, we overload our mental circuits, and we lose our ability to think clearly. In fact, people's opinions in the news may bias you and end up either trading a stock that doesn't meet your strategy or skip a trade you should take.

As a day trader, the news is not going to give you valuable insight into trades. By the time something reaches the news, it's probably too late to capitalize as the action's already happened.

However, I suggest you check the economic calendar in the morning before trading. The economic calendar will provide you with the precise times' conditions may become more volatile.

At these time's you might want to take a step back as things can hairy and unpredictable. As a result, read day trading books instead of looking at news sources.

4. Be Disciplined: Have a Daily Routine and Stick to It

How to Do Day Trading

What if I told you WWII was won due to a strict regime of afternoon naps, hot baths, and dictating in bed? You'd probably tell me I was crazy, but I'm not.

For those of you perhaps not as up on your history lessons as others, Churchill was the British Prime Minister who rallied the British people and led the country from the brink of defeat to victory.

And this most certainly was not an easy feat considering he was in charge of an entire nation. So, how did he do it? He most certainly didn't have an admin assistant keeping his blackberry up to date.

Churchill was a remarkably disciplined man. Yet the omnipresent cigars, regular afternoon naps, dictating in bed or the bathtub, and keeping his staff up all hours of the night, would have one thinking otherwise.

In many ways, Churchill was like an engineer - systematic, sequential, orderly in how he approached his day. Churchill was disciplined about his priorities and stuck to a system of small habits.

In fact, one of his literary assistants, Bill Deakin, described him as "absolutely totally organized, almost like a clock." His routine was in no uncertain terms dictatorial.

He set himself a ruthless timetable every day and would get extremely agitated and cross if it was broken. One of the keys to his extraordinary success and productivity was his regular (60-90 minute) afternoon nap, followed by a hot bath after he woke.

With this approach, he could split one day into two, which dramatically increased his productivity. Now, this required some juggling of shifts among his staff, but it worked.

5. What Are Your Daily Habits?

Take some time to reflect on your daily habits. Do you have a strict structure for your trading day? Are you prepared before you sit down?

Do you have distractions in the form of kids, spouses and even pets that freely roam into your home office? Are you disciplined and following your plan?

Often traders who fail to make money in trading get frustrated and go out and learn a new strategy and different technical indicators.

Unfortunately, they don't realize they're the problem. With no trading strategy, a lack of discipline, bad life habits, and impulsive behaviors, it's no wonder they are failing at trading.

Final Thoughts

Day trading isn't about re-inventing the wheel or continuously adding more information. Quite frankly, your trading will likely improve by cutting out all the useless information that distracts you.

Reduce or eliminate your financial news consumption; have a solid trading plan and be disciplined. Less truly is more in the trading game. At Bullish Bears, we understand this.

We want to help narrow your 85 trading options down to 2. Trading is not an exact science, but Bullish Bears will help you unravel the unknown. Learn the essentials in our free day trading courses.

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