Day Trading Questions and Answers from Facebook

Last week, we created a post on our Facebook page to see if anyone had any questions about trading. If you guys like these posts, we’ll continue to do them in the future so make sure to leave a comment if you want to see more!

Easy enough! You’re welcome hope you enjoy the free content and helps check some boxes off in this insanely confusing but fun industry.

It depends on the stock that we are looking at. If it’s a strong daily chart (in other words looks like it can break out with a sustained trend) vs. choppy one day wonder style move I’ll look for a weak open, stabilization and perk – once that perk comes in many times I’ll anticipate the red/green move with partial size and if higher lows HOLD then I’ll add in with a set risk off LODs.

One of my favorite trades is a day where the SPY is gapping down 100-200 + points which makes the overall sentiment nervous, scared and all these other names start to gap down which don’t typically trade with the market. For example many of the China names in the past like YOKU and SINA (before recent pull backs) many of the pharma names like KITE and ISIS and some momentum names like HIMX all would gap down when the SPY was in the  gutter as much as 5-10% + and end up rallying back near green or green on the day as soon as the market puts in a tiny bounce.

Market has definitely been choppy and thin, I think that’s the biggest difference. For me, it’s about not being biased in any direction. I had a tough time adapting in June and July because what worked perfectly from November to May was NOT working for me the last two months. Over extended charts were pulling back only to be met with support and ripping right back on highs. I went through a period where just about every day I had a major gain turn into either flat or a loser on the day because I was too patient thinking that a pullback was likely.

These changes in the market obviously happen all the time, and adapting is key – it’s just how quick you do it. I had a lot of emails, tweets asking “Is the market always this slow in the summer” but I’d challenge that because the market HASN’T been slow at all, the problem is this: You zone in and focus (myself included) on names you think should be pulling back, breaking out etc and you’re attention is focused THERE and not on the names that are moving.

For me, being patient out of the gate, starting in SMALL (really .. much smaller than normal) and then ADDING to the winner has worked a LOT better than anticipating and doing a typical scale I may normally do.

There are plenty of brokers, perhaps the most popular for non-US traders is SureTrader as they provide my favorite trading platform: DAS Trader. I would suggest as always to shop around and although sometimes the fees are a bit higher I think you’ll find that the benefits outweigh.

I rarely trade pre market I’m glued enough to the markets as is so I try NOT to get involved but at times I do.

Physically, I just click the mouse – I try not to strain too hard.

I do not use hot keys, although many I trade with do. It’s whatever works for you. DAS Trader has a great feature where you can point and click an entry, or many times I’ll have it mostly filled in and just add the last cent or two, for example $35.XX and I fill in the $35.5X or just click the bid/offer when it’s close. Keep in mind you can prepare an order before triggering it so do as much as you can before the point of the entry. I use a confirmation window if it’s over a certain amount of shares and $ value but if it’s a smaller order no — keep in mind having the pop up does help prevent some fat fingers at times especially if you’re acting quickly.

They key isn’t trying to ‘succeed’ the key is LEARNING and educating yourself the right way. So many traders come with $500 or $1,000 and ask hey how do I turn it into $5,000 or $25,000 what is the easiest way.

I always tell traders that at that level … $500-2500 range it’s more important to be saving your money to give yourself the best chance at the markets while educating yourself properly. Put yourself in a the trades with a paper trading account to see if you GET IT. Forget the money right now, focus on am I understanding the set up? Am I buying lower and selling high? Do I respect my rules?

If so, at that point you can start slowly dabbling with real money and slowly scale up from there as you prove to yourself that you are doing the right thing.

Too many try to make a tiny account work and all you’re doing is frustrating yourself and burning commissions. Why not focus on value add and take the trades FREE with no risk (simulated account) then use that positive experience to apply it to real money if it works for you. Nothing worse than trying something new and getting beat up at the same time in the market. One thing people don’t understand is by taking this route, you’re actually winning, staying ahead! Most people just go right to the market and blow a few accounts up and learn nothing.

On smaller accounts sometimes it’s worth trading nice daily chart set ups so that if it doesn’t work out on your time table you can actually be confident in a swing trade (over night) and let the trade work vs. trading something with big range and getting smacked around due to the volatility.