How do day traders place so many trades? Which products do they trade? How much do they bet? How do they know when to buy and sell? What does their trading set-up look like? Which make money? How much do they make? How many trades win? How many lose?
9. What Do Winning Day Traders Do Right?
Trade 5-6
products
Trade
about 2-3
hours a
day
Long and
Short
Shorts
make
profits
quicker
Dow,
GBPUSD,
FTSE
Time
frame – 1
minute
and 5
minute
charts
1 or 2
strategies
max
80-90%
winning
trades
52%
trades
held
under 1
hour
24%
trades
held 1-6
hours
Hold
under
10% of
positions
overnight
max
10. What Do Winning Day Traders Do Right?
Have a max loss of around 5 x average winning
trade
Winners take lots of small wins & some large
losses
Account size $7,000-$20,000 = 80% of day traders
Lots of small bets compared to account size
11. Cleverest Thing Day Traders Do…
• Bet small…0.1% of their account per point on index/currency
• Eg $20,000 account. Bet $20 per point move in Dow or GBP/USD
12. Why Small Trade Sizes
They would
have open 3-5
positions at any
one time in
different
products
If lose, lose
small
Feared losses
16. Strategy: Scalping
Up to 200
trades in a day
About 5 trades
per product in
an hour
80% of trades
last 5 minutes
to 2 hours
80% win
17. Strategy: Scalping
Win target: 3-5
pips
Add to winners if
price moving
sharply (watch
chart)
Add to losers up to
maximum 3
additional
positions
Bet size: 0.1% of
account size per
point ($20k
account = $20 per
point bet)
Stop loss if 3 x
winning target (ie
3 x 5 pips lost ie 15
pips)
Trade in direction
of trend, or of a
pullback – see next
Popular products:
FTSE, Dow,
GBP/USD/JPY/EUR,
Gold
18. Why – What’s The Theory?
The markets moves
short sharp
amounts
So capture many
small profits with
small moves
When it moves fast
in your favour,
quickly add to your
position
As soon as it slows,
get out
If you have a loss,
add to it, to reduce
your average entry
price and the
market will come
back
19. Profit Maths
8 x 5 pips =
40 pip profit
2 x 15 pips =
30 pip loss
Net profit 10
pips
20. Profit Maths
$20 bet per pip
is $200 profit
per 10 trades
2 trades per
hour per
product
5 products = 10
trades per
hour
100 trades per
day = $2,000
21. Profit Maths - Caution
• Assume 10% of that whilst you learn and make errors
• Increase profits: larger account and bet size; more products observed
22. When Do You Know To Enter The Trade?
Method 1: Trend
24. Method 2: The Pullback
• Draw a line to represent the average price of the past 9-12 hours
• Ie a line above which as much time the market was as below it
• Ie a line around which the market traded
• Expect pullbacks to the line when price goes above it too far and below it too far
25. How Do You Know The Trend?
Look at the
prices
Look at the
chart
42. Step 2: Familiarise Yourself With How To Place
a Trade – 2 minutes What we are
trading eg Dow.
Buy and Sell Buttons
and the Buy and Sell
Prices. If buy and then
sell – make 1 point
loss.
43. Step 2: Familiarise Yourself With How To Place
a Trade – 2 minutes
1GBP profit/loss per
point change from buy
price to sell price
44. Step 2: Familiarise Yourself With How To Place
a Trade – 2 minutes
Optional: At what price
you want to sell at a
loss ie price below
your buy price
45. Step 2: Familiarise Yourself With How To Place
a Trade – 2 minutes
Deposit needed to bet
1gbp per point on this
product