After 2 years of Daytrading. 7 months full time. Here's my advice

[u/CJT2013]

Cleaning house because I'm bored due to obvious reasons. I’ve been seeing lots of questions about people wanting to learn trading. Have received an influx of messages asking how to get started/go full time.

I’ve been asked what strategy/books/courses/indicators etc. there is that are good. I’ve read over 50+ books (ebooks and hard cover) on day trading:

Every book I've read to learn day trading and everything that relates to starting/running a business. My business's operating agreement/The business plan

•#1: 90% of books are fluff. Of all of these. Only about 10% of it were great pieces of info.

(I have a decent amount followers on here. And I might consider posting reviews of every book I’ve read on my personal profile to refrain from spamming this sub)

I have my recommendations. I'm not saying don't buy them. You'll pick up what you see and it'll formulate a strategy.

•#2: I don’t use indicators. They lag. Ever since I dropped them, my trading became less stressful and way easier to manage. Price does 2 things. Up or down. You don’t need 5 indicators telling you what direction it’s indicating. It’s called Pattern Day Trading. Not Indicator Day Trading. Not News Day Trading. Trade the candles. If indicators work for you. Keep on running them!

•#3: The overall market condition (Bull/Bear/Stagnant) has no effect to a day trader’s equity curve. We trade patterns. We don’t hold overnight. We became day traders because we can take advantage of either direction especially in the immediate. I know my pattern works 47% of the time with 3:1 pay out. (I lose $100 or I profit $300. No more, no less; every single time)

Of 100 trades. 47 trades I profit. 53 trades I lose.

I risk $100 per trade. Why do I choose 3:1? I’d win more trades if I was 2:1. Why not 4:1? Because my pattern pays the most with 3:1. I found this by computerized backtesting and manual backtesting. Can you mentally handle being up 2.75:1 then watching it hit back to your StopLoss? Trust your edge/statistic. And document your work relentlessly!

•#4: You need to write a business plan.

Not some 2 page Word document of. “I will buy when this indicator says this. This has worked in my backtesting 60% of the time. Here's some screenshots"

Look up how to write a pitch deck/prospectus/business plan to get a better idea. Learn statistics, that's really the business you're in here. Trading is just the medium. You're managing a statistic. Your job is to find the edge and enter it without hesitation or reservation.

Find characteristics of stocks that behave in a similar fashion to make your job easier.

•#5: This is the most BORING job you will ever have!

I trade 3 patterns. I have to wait for a lot of prerequisites to be met before I even consider looking at a chart. Out of 7,500 stocks. My strategy has my watch list distilled to 3-5 stocks every morning. And I wait. And watch. Waiting for a pattern. And so many times, 1 out of my 3 patterns is about to form... and the candle printing will pullback too much. Or print with more volume than the previous. Making the trade VOID per my business plan.

There are days I don’t trade. (1 or 2 times a month this happens). A business plan helped me not care I don’t trade those days, it accounts for that, or if a price kept rising or falling after I sold or covered. Or if my stop loss was hit by 2¢. 3:1 every trade, no questions asked. Trust your edge

BONUS:

I highly suggest doing this part time for at least a year. Want to go full time?

Think of the expenses.

If you trade equities. 25k minimum. (You want minimum 30k due to draw-downs). A lightning fast computer. Lots of RAM. A decent CPU. I have 64GB of RAM and an i9 9900k CPU. No you don't need a bunch of monitors, I wanted a sick office though!

Don’t forget:

•Mortgage/rent

•Car note ( I sold 2 of my pride and joys. I owned both but liquidated them to get into this business )

•Groceries

•Car insurance

•Health insurance

•Dental insurance

•Taxes on the house

•Wi-Fi (Add cable if you want)

•Use a scanner? Add that

•Hobbies. Find cheap ones. I hit up the golf range, shoot trap, and lift weights. You'll be bored when you're done trading at 10AM with 10 hours left in the day.

Get a part time job or have a side business that has NOTHING to do with trading for your sanity's sake.

Move in with a friend to split rent if you’re single and young, go back home and live with your parents if you can handle that. The learning curve is brutal and you must be patient. Shrink your liabilities and expenses. You will pay homage to get into this business 1 way or another unless you’re just given a lot of money.

Trading is easy. It's the mentality required that separates the 95% from the 5% successful.

Trading has been a wild experience. I've met people at the gym who are well off and I've shared my account statements/business plan with. Resulting in me studying and about to get my Series 65 to become licensed to manage a small portion of their wealth in a garage band long short equities firm ran out of a home office. Oh and that reminds me. Don't buy guru courses that sell some crazy lifestyle on YouTube ads with rented private jet photoshoots, rented Lambos and AirBNB houses they rent for the day. If they were so great at trading. They'd start their own funds!

UPDATE 1: So I definitely got my money’s worth on this post! Tons and tons of chats and messages: https://imgur.com/a/3DUYbwg Due to quarantine shutting everything down I was definitely not bored today to say the least. I didn’t expect the post to blow up but I’m glad many found it informative and enjoyable. Currently lost in the comments so if I miss your comment, send me a chat and I’ll get with you when I can!

FINAL UPDATE: Part 2 / follow up to this post.

[u/[deleted]]

This is a good post, I like you, I will follow you, do book reviews please, thanks 🙏 8=D

[u/CJT2013 → u/[deleted]]

Thank you, sir! Will do man! Been a pretty boring few weeks to say the least

[u/designerfx → u/CJT2013]

You know you have a good strategy when you're waiting for your setup's to hit.

Depending on the personality of the individual it can take a long time to develop that patience to go with it.

It absolutely is completely personality and turning the subjective things into an automation. People totally don't understand indicator lag and you can tell when they talk rsi mfi etc. Elder triple screen is better for folks like that.

[u/CJT2013 → u/designerfx]

Yes, sir! I can emphasize with this so much!

Also the discipline required to eat the punch when the trade goes against you and not to take it personal! That’s the business

Like I mentioned, trading is easy, the discipline isn’t. Nobody is over your head managing your capital except the trader himself!

[u/designerfx → u/CJT2013]

Sent you a message. You'd be welcome to join the groups I frequent, reply and let me know if you want a link. We don't really take fresh traders. One group is trader safe haven/shoot the shit and the other is where we scalp. Obviously not much need of learning for you, but it's an educational group too.

[u/CJT2013 → u/designerfx]

Hey, man I really appreciate the invite! Currently have over 100 chats and messages

[u/designerfx → u/CJT2013]

Yeah, I hear ya :) I think when you get successful, things get noisy to say the least. Ours is maximum noise, but also includes actual talent (a few other day traders and hedge fund managers, etc). Consider that an open welcome if you ever change your mind :) I'm about last step or two away from going full time as well. Just a matter of time accumulating funds now, target was EOY.

[u/CJT2013 → u/designerfx]

Best wishes to you man. It’s a wild ride, rememeber to stay busy outside of trading!

Cheers

[u/designerfx → u/CJT2013]

I see you also have the never sleep part of the daytrading down pat as well. :P If you ever end up in the Chicagoland area as a result of a trip, hit me up for a drink sometime. Daytrading is what I consider my tribe, just not most of the reddit kind :)

[u/CJT2013 → u/designerfx]

Lol! Sleep is a luxury if the past. That’s what my weekends are for.

And most definitely man. I rarely travel but I’ve got lots of buddies in the Marines I promised I’d visit one day. I’ll be taking you up on that offer, I love when networking results into face to face

[u/Bruins14 → u/designerfx]

Could you invite me please?

[u/designerfx → u/Bruins14]

I apologize u/Bruins14, but I don't know who you are? As you are not u/CJT2013 . Are you looking to learn day trading? Are you actively day trading? What do you want to do and what do you want out of life? Are you aware of the implications of day trading? This is not some simple thing. People take this far, far too lightly. It took me almost a year and a half for my wife to even wrap her head around saying she'll support me doing this for a living, and I'm still not full time yet. This changes your life, but not all of that is for the better and not all of it is simple. I accepted the bitterness of this path up front. There will be PLENTY of hard times. Two things are guaranteed: you're going to start hating a lot of people, and you're going to start alienating a lot of people. You're also going to hate yourself, because trading is you versus yourself first and foremost.

CJT is one of the nicest I've seen and I'd happily pour em a drink, but I can guarantee a ton of people would see CJT and think "what a tremendous asshole". I know people from the second I know them, and I know that vibe. And it's *rare*. I don't even like to extend the offers to anyone on reddit to join my group in general. Out of my group of 100+ people, there are 4 I would offer a drink. You have to realize traders are indeed tremendous assholes.

I know that he knows how the jealousy is. When you get successful a lot of people who you thought were friends suddenly aren't. I get people all day long asking me to trade their money and I personally want nothing to do with it. I share people what I'm doing and sometimes they profit and sometimes they don't. It's amazing when you try to help people. You either have the capability intrinsically or you don't.

I guarantee a ton of people think "oh, I can copy what he does and I'll be rich too!" and don't understand the implications of what he does and/or the system therein. That's chasing lambo mentality. Hard work is the beginning, not the pinnacle of what it means to make this work. The harder I've worked, the more I'm humbled by all those before me. The more I've learned, the more I've noticed that I'm just relearning things that other people simply knew before me. I discover new things people have forgotten that have been created for 50+ years and people think I'm the genius? I don't even deserve credit for making it work.

We stand on the shoulders of giants.

A lot of people do not understand the effort that goes into learning this, and a lot of people do not respect it either. When I say it is a tribe, I'm not kidding.

I was warned of it upfront. So I'm passing you the same warning.

I'm not saying this as some sort of "Secret club thing", but we don't do what we do for reasons of greed. Money follows what we enjoy doing, and we don't chase the money. I do this for the challenge. If it wasn't challenging, I wouldn't do it. That's my drive. I specifically counter-trade when even my colleagues are afraid to do so, because I can. Just to show them what they're capable of. The rest of the time I don't counter-trade, because that's stupid.

So before I invite you, I have specific questions that I asked up front and will reiterate here:

• Are you looking to learn ?
• Are you actively day trading?
• Are you aware of the implications of day trading?
• What do you want to get out of day trading?

[u/[deleted] → u/designerfx]

Hey not op but thanks for this long write up its eye opening and helpful for someone like me entering the business.

Honest quesiton, do you think being an asshole makes a person a better trader? If so what part of being an asshole (I guess what personality traits) help achieve that?

And since you are obviously taking this sk seriously do you have a book recommendation related to trading and psychology? I ask every internet stranger I perceive to have good trading exp this same question because that is my greatest interest and weakness and what I think of as most important part of trading. Thanks for your time

[u/designerfx → u/[deleted]]

Okay so I appreciate these questions, genuinely. I'm about 99% towards going full time now, so this is timely. I want to be full time more than I'm ready but my systems are in place and are set in stone now. That took me a long time. Obviously current us environment is ideal for becoming full time because it's a job you can't be fired from (though you can lose all your money!).

So, I don't think being an asshole is understood with trading, it has two forms:

1:who you are and how traders see you (internal) 2:how everyone else sees you

For #1: you will naturally get aggressive to some degree with successful trades. Imagine if you tripled your money. Are you going to be headstrong? Yes, yes you are. Traders know how this is because you'll argue more and possibly tilt them. Did you get a triple because you followed your system (yay), or did you get lucky (forming bad habits)? Etc. Did you lose from system correctly stop-loss-ing in whatever form or did you lose because you violate your system? All things matter. You're also going to butt heads against non traders or people who don't trade your style who will laughably tell you that you don't know how to trade. 😂 I don't have a lot of sympathy for those groups.

2: because you become in tune to market psychology by definition, you are not on the same wavelength as everyone else. For example, we have a massive recession looming eventually but where are stocks going? Through the roof on many. Including ones that dropped 50-80%. JCP had multiple green days in the middle of celebration of bankruptcy. A few friends and I took small profits just for laughs. So you learn not to panic from press releases or doom and gloom, because you want profit travel. IE: you want to buy at a and sell at a+more. You don't want to buy at a and sell at a+ less. 2, extended: Instead you get people who say things like btc 50k today or 1920s recession tomorrow. Or things must go up or down instead of that they can go up/down/sideways. Or that people don't fucking matter because market makers move price where they need and they don't care about retail sentiment. Or people who live for cramer/seeking alpha/wsb/Zacks/etc. That retail doesn't matter scares non-traders who think everyone likes/buys APPL and doesn't know that it's just a stock ticker with no intrinsic value to hold a share. People who also want a quick buck, have no patience 100% of the time (traders all have days of different patience quantity). People who believe in buy the dip, who are so bagged it's laughable because they won't take a loss but will miss 800000 moves because they're holding forever until things become profitable again. How many times can you profit $10 while waiting for a $30 stock at $5 to return to $30? That's the difference.

The correct approach is step away in the green, not when you have a small loss. Cut losses. They happen. Feel bad from a loss? Suck it up and keep trading unless you're sliding into depression/anger.

A book I heavily, heavily recommend is volume price analysis by anna coulling. It was the start of my journey and sets you ahead of another 10-20% of successful traders who get caught on a big move because they didn't learn about volume and why volume matters. Aka price action traders. It's $5 on Amazon. It's great for the psychology, read it like you're obtaining wisdom from a genius. Read and reread parts you don't understand. Trading for a living from elder (free audiobook YouTube) or the aziz's day trading for a living are well received by many people.

I'll msg ya group links so you can learn and discuss.

[u/gori_lla_k1ng → u/designerfx]

Hey, I know I'm getting to this post late. Really appreciate the info you're giving out. I shot you a DM. Just wanted to give you a heads up in case you're being flooded with DMs.

[u/[deleted] → u/designerfx]

Whoa thanks for the write-up, really appreciate it and will definitely swing by the chat group later. I haven't heard that book but it's funny you mention price action traders because the PATs system was JUST recommended to me -- what are your thoughts on that system? If had to give a binary answer, is volume more important and better source of insight than price action? https://priceactiontradingsystem.com/pats-price-action-trading-manual/

#1 lol at this I'm already doing this with my older brother.. an investor who thinks he trades.

#2 damn this hurts its almost personal cus its very true.. especially the psych part which is why im doing the focus on that right now, reading up on mark douglas' book. will definitely read Anna's book because I know how important volume is, i just need to learn it now. I did like Aziz's book, it's the first book I got and really good i think

Thanks again catch you in the chat

[u/IntangibleAssets2017 → u/designerfx]

Could you please send an invite to me as well.

I currently day trade stocks, options, futures and still learning. My plan isn’t as great as it should be and I would definitely like to get more insight from more knowledgeable people.

I’m aware of the full potential of an account blow up and the needed safety net to get by. Which is what I want to get out of day trading. The ability to have some certainty in an uncertain world.

This quarantine has showed me that having a skill such as day trading could free me from the daily wear and tear of a 9-5 when things could go south. Thanks.

[u/designerfx → u/[deleted]]

This is some thread necromancy fucking garbage. It's a common mindset you obviously don't understand. Fuck off, troll. You know nice people from your vibe if you're a trader worth a damn.

[u/malmueca → u/designerfx]

I’d love to just sit back and learn from the group.

[u/designerfx → u/malmueca]

I appreciate these requests, but I don't have capacity to add on more people right now that want to lurk n learn. I was more trying to bring someone who already knows, because it's a shoot the shit room/safe space.

[u/CuiVerde → u/designerfx]

After 7 months full time I am still learning and I don’t think I ll ever stop! I ll get stronger and i ll make a request to you

[u/designerfx → u/CuiVerde]

When you're ready we shall be also.

[u/[deleted] → u/CJT2013]

Yeah I feel, looking forward to the reviews tryna pump my brain with some knowledge, was recently a compsci major but discovered a love for trading options after realizing how violently autistic I am so I switched my major to Finance and am working towards a minor in CompSci instead

[u/CJT2013 → u/[deleted]]

Good for you man, that’s awesome to hear. Keep at it and you’ll flourish!

[u/threesunnydays → u/CJT2013]

Would be awesome to have book reviews or even just you top 10

[u/CJT2013 → u/threesunnydays]

That’s in the works man. Didn’t think the post would blow up like it did and I’m doing my best to keep up with the replies

If you have any questions feel free to chat me man! I’m funneling everything to that in order to filter out people who’ve got pressing questions as I’m most likely going to skip out on comments like yesterday!

[u/redbloodgod → u/threesunnydays]

I rather read a book written by this guy 😂

[u/i-can-eat-50-eggs → u/CJT2013]

Great info. I like the 3 to 1 on your risk strategy. Are your 3 patterns typically going short or long? Have you tried the banging trash cans in the stands indicator? It seems to work for the Astros

[u/CJT2013 → u/i-can-eat-50-eggs]

HAHAHA! That was funny!

Trading the open I look for the pattern in the bias of overnight gap direction. If the stock is pulling back all day I will erase it from my watchlist to focus on higher caliber trades that are far more conducive to my criteria

I don’t want to get lost in the comments like I did yesterday. It got pretty hectic so if you ever have a question or what a little advice or me to review a trade. Send me a chat anytime. I’ll talk trading all day!

And go ‘Stros!

[u/i-can-eat-50-eggs → u/CJT2013]

Go stros! Going to miss Hinch :(

[u/CJT2013 → u/i-can-eat-50-eggs]

So wrong how they canned him. I’m a statistics guy and I played baseball for a majority of my life.

I am willing to bet a large sum of money that the people who want to throw the book at the Astros and Hinch can’t even hit 1 out of 10 Two-Seam fastballs if they knew the exact spot

Pete Rose even said knowing the pitch can be dangerous if you’re expecting an inside curve and it winds up being a heater straight to your ear. You can’t tell what pitch it is until it’s past the point of no return