As a gainfully employed loser who lives with his mom, I have acquired a decent sum of disposable income (again) and I have decided to dip my toes into the world of day trading once again.
I’ve done this once before, it did not go well for me, but since then I’ve grown a lot and recouped all losses. To learn more and expand my interest in the topic, I have decided to write reports on the different videos I watch to kill time. These are their stories… dun dun.

Day Trading Strategy

1. Introduction to Day Trading

Understanding candlestick charts is essential, but overcomplicating trading setups can hinder decision-making. Using fewer indicators and focusing on structured approaches helps improve success rates.

2. Key Trading Criteria

• Pick the Right Stocks: Focus on stocks with high relative volume, news catalysts, and price movements.
• Entry Points: Wait for a first pullback before entering to confirm momentum.
• Share Size: Start small to minimize risk.
• Risk Management: Predetermine stop-loss levels to control losses.

3. Stock Selection Strategy

• Focus on Gappers: Stocks that open higher than the previous day’s close.
• Relative Volume: At least 5x the normal volume.
• Price Range: Between $2 to $20 for optimal risk-reward.
• News Catalyst: Stocks with breaking news tend to have more momentum.
• Float: Prefer stocks with less than 20 million shares outstanding for volatility.

4. Trading Execution Process

• Identify the Setup: Stocks with high volume and strong price movement.
• First Candle to Make a New High: Use candlestick confirmation before entering.
• Monitor Buyer Activity: Look for strong buying pressure on Level 2 and time & sales data.
• Profit to Loss Ratio: Target at least a 2:1 profit/loss ratio to maintain profitability.

5. Common Trading Mistakes

• Overcomplicating Charts: Using too many indicators reduces efficiency.
• Selling Too Soon: Many traders exit early due to fear of loss.
• Holding Losing Trades Too Long: Failing to cut losses when an exit signal appears.
• Ignoring Market Conditions: Adjust strategy based on overall market trends.

6. Pre-Market and Live Trading Approach

• Use Stock Scanners: Identify the best stocks meeting gap, volume, and news criteria.
• Follow a Routine: Analyze pre-market movement and adapt accordingly.
• Limit Losses: A three-strike rule—if three trades go against the plan, stop for the day.

7. Psychological Aspects of Trading

• Fear of loss can lead to poor decision-making.
• Use hotkeys to remove emotional selling and enforce proper trade execution.
• Accept that losses are part of trading and focus on following the strategy.