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“John gave me valuable insight on how to be a winning day trader, on building my own day trading business and some great day trading tips on how to be in the present moment during a trade, where before I mostly fretted about losing and begging the gods to win.
I will definitely be utilizing his expertise and stock calls to stay on top of my game… the big money game.” Darlene Elenor
What is day trading – aspiring day traders ask?
Hi, this is John McLaughlin, Stock Coach at Pebble Beach, with the fog rolling in, one of the best places to visit in California.
What is day trading?
For us (my clients and I), day trading is about buying and selling a stock within the same day (9:30am – 4pm EST (not 8am-9:30am, nor 4pm-8pm, commonly referred to as “pre” and “post” market trading, as the volume is extremely low and the risks are unacceptable – except when trading earnings release notices, then all price and volume hell can let loose).
What is Day Trading – Margin Day Trading:
While day trading, day traders seek to make profits busing margin (leveraging offered, 4 times your capital. Say you have an account balance of $50K, 4 times margin allows you to trade $100K, a $100K account, $400K buying power. This, of course, accelerates, magnifies your potential gains or losses on whatever capital traded.
Investopedia – Margin Trading: What Is Buying On Margin?
What is Day Trading (About.com) – Day Trading Stocks?
Below you will find the traditional answers to that question?
The more important questions I hear from investors, swing trading and day trading traders are:
- “John, as an active day trader, what makes your style of day trading so different from all the others?“
- “As you day trade, why are your day trades so profitable?“
I’ll answer both questions, but first let me point out that we only trade stocks in our trading room – no other financial instruments (I usually say when asked why, “I’m not smart enough” – or – “I’m too busy trading stocks.”).
Reasons Why I Day Trade Stocks
First, it’s about the winners and the losers – the 2% winners and the 98% of all traders around the world, the losers, by my estimate.
The 2%, smart money has sophisticated software to gather world-wide investor, swing trader and day trader information – not just some information, all of it; this software is designed and continuously redesigned for one purpose, and one purpose only – kill the 98%.
This trader information (trade execution info) includes both market and limit offers to purchase long or go short; market, stop limit, and trailing stop limit orders; and all the various target or exit orders that have yet to activate. They have it all.
They use use this info to make clever tactical decisions based on New School day trading rules of the game being played to move both market indexes and certain stock prices, all financial instrument prices, for that matter, in any direction that suits them for their advantage – and your (loser’s) disadvantage.
This is to the distinct disadvantage to 98% of all the other traders in the world – all those day trading for a living.
The dreadful results for the 98%, especially for those just learning how to day trade stocks is a killer – they take you out both financially and emotionally – when? – when you least expect to lose.
Applying their proprietary day trading software, these big money winners act when the vast majority of traders, the crowd, least expects to be “taken out” – what I refer to as Smart Money TRICKERY.
They go in for the kill and get out in a matter of a few minutes, taking huge profits.
How do they do that? simple – they trade the new-school trading game I just described; and the crowd trades stock with what they learned over the years, old-school trading that’s been rendered obsolete by the big boys.
Are you describing high frequency trading? That’s another trickery game, under attack now with new trading rules, and more rules coming, by the SEC.
No, I’m not referring high frequency trading. I’m describing the hard to take fact of new-school trading that the world of losers are missing, along with their money.
No what distinguishes what we do (me and my clients in our trading room) – we trade on the shoulders of the big money trickster traders.
Simple as that. Well not so simple for you, as you have no idea what I’m talking about, and won’t know until you engage the Trading WEALTH learning program as a client.
You really didn’t think I was going to spill the secrets, just like that – did you?
But I will tell you that: just like investors relying on company, executive, product and services sales data (fundamental analysis), and swing traders and most day traders glued to their indicators relying on charts (technical analysis) – we rely on those as well, along with a few observed activities that comprise trickster analysis.
Yes, I’m talking about the new, game changing, day trading power of Trickster Analysis
You won’t find mention of this approach anywhere on the internet but here on this website.
If you Google it you are likely to come back here or my other sites or any number of my social networking sites.
Our Trading WEALTH learning program takes full advantage of this smart money trickery with our day trading secrets, new-school day trading systems, day trading strategies – with a focus on Day Trading Stock for big money winning.
Here are our 2 typical new client questions:
- What is Day Trading?
- How do I Day Trade Stocks?
What I’m going to share with you on this site is about day trading “new school” and is not available anywhere else on the web, that I know of.
Because I invented it over 10 years ago, and other than my clients, it’s not applied by the masses of traders who I call losers (we’ll get into all that, later).
Because most so-called day trading gurus (offering how to day trading courses, books, CDs, software, endless indicators, computer generated picks of the day) – and the investors, swing traders, and day traders paying for their wares) are talking, teaching, day trading old-school, whereas I’ve discovered where the real money lies, day trading new-school – where the big money is being traded.
Day Trading Stocks – New-School – Success Factors:
- New day trading Perspective – learning what really happens when stock prices explode.
- New day trading Strategies – forecasting in seconds, not hours or days, then executing trades that cannot be attacked by the big boys’ trickery – not distracted by the noise, info overload, or the money, but – on WINNING.
- New day trading Systems – to bring all this together for trading POWER, that is, day trading on your terms, absent the distractions and distress of big money losses.
And what would mastering the new game of be like without a new set of day trading rules, not many rules, just the right mix for winning.
Rules, all originally designed to allow troubled investors, swing traders, and day traders to take the bull by the horns for consistently profitable winning , for wealth building trading, day by trading day.
You like having all the hot indicators, you like to pay for and collect, like a garage pack rat, all the picks of the day, and you love listening for hours to the forecasters on the Web and TV?
Then guess what? You are either going to change all that crap – or this learning program is not for you and now would be a good time to go your own way.
Learning never happens accumulating knowledge by listening to what others have to say; learning happens by doing, with an outside observer: keeping you on the winners track, encouraging and even badgering to to displace obsolete, loser habits with the habits of a world-class winner – a wealth building winner.
The Trading WEALTH Learning Program
First – our day trading goal is to make $1.00 to $3.00 a trade, not $.20 – .50 scalps – yes, you figured that out: thousands a trade, certainly thousands a day, hundreds of thousands a year – day trading stocks.
If that scares the hell out of you or you somehow, think you don’t deserve that kind of big money success, then you’ve come to the wrong coach.
Pick up your hat and head off to one of those old-school, so-called coaches who will teach you how do one thing well in the long run – get your ass kicked making big money losses that eventually get you on a psychiatrists couch or, worst case, in a hospital gurney recovering, from excess brain or heart drain.
Second – our day trading approach is about ending big money losses.
Third – Typically, we will hold a position for not much more than 3 minutes, as usually that’s all it takes for smart money to trick most traders with price reversal, a price extension, a “short squeeze”, or a “long squeeze”.
You name it, We love trading it.
Investing, Swing Trading, and Day Trading
Most traders I talk with, investing, swing trading, and even day trading have become time and money wasters: distractions, boring, especially during the summer months, when most big money traders holiday for weeks on end.
So most loser wait in search for what’s really happening on the internet, to get your illusive pot of trading gold. After hearing all these stories about day traders making it rich, that’s probably you. Other losers look at charts all day and frequently think – “I could have made a ton of money right there, if only I knew how to…” – you finish the sentence.
Traders want the most relevant, reliable, problem solving websites (right on a the first page results, the first five spots, right below their Pay Per Click AdWords entries) to have answers to their questions, solutions to their problems – not info buried pages deep – to do one thing, and one thing only – make big money trades.
Well, sad to say it doesn’t work that way for one. Second, that you found me for your answers, most traders tell me, is a miracle – given the unrelated, irrelevant sites showing up on page one of a search.
What is Day Trading? Back to Day Trading Stocks…
Below I have excerpted definitions from several authority (i call them dictionary) websites, all found at the top of a search related to trading stocks – for your additional information. Take them, as they say, with a grain of salt – you might get lucky – I doubt it.
Notice they don’t even use the terms: day trading stocks, how to day trade stocks, day trading stock, stocks day trading, day stock trading, day trade stock.
No, if you want relevant, valuable information to learn how to be successful in the day trading stocks business, you need to dig deep – as Google missed the boat when it comes to value and relevancy for day traders like you and me.
Who knows – no one can change what is – not even Google.
Like any aged reference material, remember that this information below is like any book – dated, thus questionable for accurately and reliably in painting a real-world, real-time picture of what’s going on in the stock markets these days – what day trading is really all about is likely missing.
Although Google has talked about current content being valuable – I, frankly don’t see and current content with stock trading searches. I’m going to try to change that with blog pages I’ve added which will contain curated contend I glean from the internet and provide my perspective and observations.
From Wikipedia, the Free Encyclopedia
What is Day Trading
“Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders.
Some of the more commonly day-traded financial instruments are stocks, stock options, currencies, and a host of futures contracts such as equity index futures, interest rate futures, and commodity futures.
Day trading used to be an activity exclusive to financial firms and professional investors and speculators. Indeed, many day traders are bank or investment firm employees working as specialists in equity investment and fund management
However, with the advent of electronic trading and margin trading, day trading has become increasingly popular among at-home traders.”
“Search “day trading” on Google and you will see why there is controversy! The profit potential of day trading is perhaps one of the most debated (and misunderstood) topics on Wall Street.
Countless internet scams have capitalized on this confusion by promising enormous returns in a short period. Meanwhile, the media continues to promote this type of trading as a get-rich-quick scheme that always works.
The truth lies somewhere in the middle.”
There are those who engage in this type of trading without sufficient knowledge (or some even admittedly for a gambler’s high!); however, there are day traders who are able to make a successful living.
Many professional money managers and financial advisers shy away from day trading, arguing that in most cases the reward does not justify the risk.
They often cite that no day trader is world renown, whereas icons like Warren Buffet and Peter Lynch (see The Greatest Investors) are a testament to the success that can be attained by more traditional forms of investing. Conversely, those who do day trade insist there is profit to be made.
They say the success rate is inherently lower as a result of the higher complexity and necessary risk of day trading, combined with all the related scams.
Overall, the street remains divided on the issue. At the very least they agree that day trading is not for everyone and involves significant risks.
Moreover, it demands an in-depth understanding of how the markets work and various strategies for profiting in the short term. Now we’ll take a look at the various aspects of day trading
Characteristics of a Day Trader
This article will focus on professional day traders – that is, those that trade for a living, not simply as a hobby or for a “gambling high”.
These traders are typically well-established in the field and have in-depth knowledge of the marketplace.
Here are some of the prerequisites to day trading:
Knowledge and Experience in the Marketplace
Individuals who attempt to day trade without an understanding of market fundamentals often end up losing money.
One cannot expect to make money day trading. Day traders use only risk capital, which they can afford to lose.
Not only does this protect them from financial ruin, but it also helps eliminate emotion from their trading.
A large amount of capital is often necessary to capitalize effectively on intra-day price movements.
A trader needs an edge over the rest of the market.
There are several different strategies that day traders utilize, including: swing trading, arbitrage as well as trading news, among others.
These strategies are refined until they produce consistent profits and effectively limit losses.
A profitable strategy is useless without discipline. Many day traders end up losing a lot of money because they fail to make trades that meet their own criteria.
As they say, “Plan the trade and trade the plan.” Success is impossible without discipline.
What is Day Trading stocks?
There are two primary divisions of professional day traders: those who work alone and/or those who work for a larger institution.
Most day traders who trade for a living work for a large institution.
The fact is these people have access to things individual traders could only dream of: a direct line to a dealing desk, large amounts of capital and leverage, expensive analytical software and much more.
These traders are typically the ones looking for easy profits that can be made from arbitrage opportunities and news events.
The resources to which they have access allow them to capitalize on these less risky day trades before individual traders can react.
Individual traders often manage other people’s money or simply trade with their own.
Few of them have access to a dealing desk; however, they often have strong ties to a brokerage (due to the large amounts of commission spending) and access to other resources. However, the limited scope of these resources prevents them from competing directly with institutional day traders; instead, they are forced to take more risks.
Individual traders typically day trade using technical analysis and swing trades – combined with some leverage – to generate adequate profits on such small price movements in highly liquid stocks.
What is Day Trading
Day trading demands access to some of the most complex financial services and instruments in the marketplace.
Day traders require:
Access to the Trading Desk
This is usually reserved for traders working for larger institutions or those who manage large amounts of money
The dealing desk provides these traders with instantaneous order executions, which can become important, especially when sharp price movements occur.
For example, when an acquisition is announced, day traders looking at merger arbitrage can get their orders in before the rest of the market, taking advantage of the price differential.
Multiple News Sources
In the move “Wall Street” Gordon Gekko says that ‘information is the most important commodity when trading’. News provides the majority of opportunities day traders capitalize on, so it is imperative to be the first to know when something big happens.
The typical trading room contains access to the Dow Jones Newswire, televisions showing CNBC and other news agencies, as well as software that constantly analyzes various other news sources for important stories.
Trading software is an expensive necessity for most day traders. Those who rely on technical indicators or swing trades rely more on software than news. This software typically contains many features, including:
- Automatic Pattern Recognition – This means that the trading program identifies technical indicators like flags, channels and even more complex indicators like Elliott Wave patterns.
- Genetic and Neural Applications – These are programs that utilize neural networks and genetic algorithms to perfect trading systems to make more accurate predictions of future price movements. (see Neural Trading: Biological Keys to Profit.)
- Broker Integration – Some of these applications even interface directly with the brokerage, which allows for instantaneous and even automatic execution of trades. This is helpful for eliminating emotion from trading and improving execution times.
- Back Testing – This allows traders to look at how a certain strategy would have performed in the past in order to predict more accurately how it will perform in the future (although past performance is not always indicative of future results).
Combined these tools provide traders with an edge over the rest of the marketplace – what is day trading stocks questions answered.
It is easy to see why, without them, so many inexperienced traders lose money.
What is Day Trading – Conclusion
Although day trading has become somewhat of a controversial phenomenon, its prevalence is undeniable.
Day traders, both institutional and individual, play an important role in the marketplace by keeping the markets efficient and liquid.
Some argue that individuals should stay away from day trading, while others argue that it is a viable means to profit.
And although it is becoming increasingly popular among inexperienced traders, it should be left primarily to those with the skills and resources needed to succeed.
Justin Kuepper has many years of experience in the market as an active trader and a personal retirement accounts manager. He spent a few years independently building and managing financial portals before obtaining his current position with Accelerized New Media, owner of SECFilings.com, ExecutiveDisclosure.com and other popular financial portals.
Kuepper continues to write on a freelance basis, covering both finance and technology topics.
From the U.S. Securities and Exchange Commission (SEC)
“Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits.
Day trading is extremely risky and can result in substantial financial losses in a very short period of time. If you are a day trader, or are thinking about day trading, read our publication, Day Trading: Your Dollars at Risk
We also have warnings and tips about online trading and day trading. For more information on day trading and the related FINRA margin rules, please read the SEC staff’s investor bulletin “Margin Rules for Day Trading“.”
What is Day Trading?
By Adam Milton, About.com Guide
“Day trading (and trading in general) is the buying and selling of various financial instruments, such as futures, options, currencies, and stocks, with the goal of making a profit from the difference between the buying price and the selling price.
Day trading differs slightly from other styles of trading in that positions are rarely (if ever) held overnight or when the market being traded is closed.
Day trading was originally only available to financial companies (such as banks), because only they had access to the exchanges and market data.
But with recent technology such as the Internet, individual traders now have direct access to the same exchanges and market data, and can make the same trades at very low cost.”
What is Day Trading Stocks – Trading Styles
“There are several different styles of day trading, suited to different day trader personalities.
The styles range from short term trading such as scalping where positions are only held for a few seconds or minutes, to longer term swing and position trading where a position may be held throughout the trading day.
Most day trading systems have a lot of flexibility, and can have open positions for anywhere from a few minutes to a few hours, depending upon how the trade is doing (whether it is in profit). Some day traders will trade multiple styles, but most traders will choose a single style and only take that type of trade.
Day trading also has different types of trade, such as trend trades, counter-trend trades, and ranging trades. Trend trades are trades in the direction of the current price movement (i.e. buying if the price is moving up), and counter-trend trades are trades against the direction of the current price movement (i.e. selling if the price is moving up).
Ranging trades are trades that go back and forth between two prices, and are used when the market is moving sideways.
Most day traders will choose a single type of trade, but some traders will take different types, and choose which one to trade depending upon the current condition of the market.
In addition to the style and type of day trading, there are other variances between day traders.
Some day traders like to make many trades throughout the trading day, while others prefer to wait for what they consider the best conditions for their trade, and perhaps only make one trade per day.
However many trades are made, the trading process that is used, and the desired goal of making a profit, are the same.”
John McLaughlin, Day Trading Coach
Day Trader (Day Trading Stocks) – Consultant / Coach
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“It is refreshing to hear John’s clear and contemporary day trading strategies – delivered effortlessly with a candid yet simple approach to change, for every daytrader to be a winner.” David Lionel