Back on Match 1st, we held our “40 things you’ll never hear us say about Day Trading” webinar. Normally we would post the recordings on our streaming site for everyone who couldn’t attend. Unfortunately, we ran into a few issues and can’t post the recording. So instead, I decided to turn the webinar into a blog. I’m not going to go into as much detail on every point like we did during the webinar, but I think the summary of each one will get our thoughts across.
A BIG part of learning to trade for many traders is unlearning something they learned in the past. Breaking those bad habits and stop doing the things that aren’t working.
For newer traders, it's important never to learn these things in the first place. Not developing a bad habit means you’ll never have to break it. Unfortunately, because there’s so much bad information out there, it’s really easy to start off on the wrong foot.
These are what we consider the 40 worst things a day trader can buy into. Some of these are obvious and you’ve heard us talk about them before. Others are slightly more nuanced.
Things you’ll NEVER hear us say:
1: Day Trading is easy.
It’s freakin’ hard. I wrote a whole blog about this one HERE. It’s the hardest career you can choose but also the most rewarding. Anyone who says it’s easy is trying to sell you something.
2: I bought the bottom/I sold the top.
That’s NOT your job as a Day Trader. Your job is to find your piece in the middle.
3: I don’t know where I’ll stop out of this trade.
Before entering ANY trade, always ask yourself “how much can I lose?” if you're wrong.
4: I’m all in.
Never bet the farm on any single trade. Small wins add up. Day Trading properly isn’t gambling.
5: That was obvious.
NOTHING is obvious in real time. Hindsight trading would be great, but it doesn’t exist. This is why studying charts after the fact only takes you so far.
6: I just buy more as the stock is going down.
NEVER average down. PERIOD. We did an entire webinar on this one: #WTF
7: Here are the 14 scans I run all day.
8: Pay me $40 and I’ll sell you one of my scans.
While we love our scans and wouldn’t trade without them, scan are not the answer for newer and struggling traders. They create more noise that you should simply tune out. First, find and develop your process. Scans can and will help you make more $ once you’ve learned how to consistently make some $.
9: I know what stock $XYZ is going to do (in the next minute, day, week, month or ANY timeframe).
10: I know what the overall market is going to do (in the next minute, day, week, month or ANY timeframe).
NO ONE ever knows. It’s all about playing the probabilities. Nothing is certain. Stay away from people who use words like “will happen”. Things might, could, may or even should happen but nothing is guaranteed. Day Trading is about playing the odds once you’ve found your edge.
11: That was easy (unless I’m referring to losing money).
You frequently hear this after someone "calls" a trade. However, there’s nothing easy about getting into any trade at the price you want. Finding the confidence to push the buy button when you see an opportunity take time.
12: The entry doesn’t matter.
As Day Traders, it’s ALL about the entry. Trade management is the less hard (I never say anything is easy) part. People that sell you on it’s about managing the trade say that because they haven’t figured out a process on how to nail their entries yet.
13: Size doesn’t matter.
There are times to push on the gas, times to let off and times to put it in park.
14: It’s all about how you manage the trade.
Again, nail the entry and this becomes the fun part. Get yourself into a “can’t lose” scenario right away. Struggling with how/when to scale out is a good problem to have.
15: You need to use VWAP (or ________ technical indicator) to be consistently profitable.
MANY technical indicators are just noise, especially if you’re a new and/or struggling trader. They are all lagging. Price and volume pays. Price and volume are what moves a stock. See our inflection points webinar for more info!
16: I’m in $YXZ.
17: Sign up for our text message alerts.
18: I’ll tweet out my entry idea.
If you’re going to follow someone make sure they talk in future tense. Wondering why you can’t trade as well as the traders you’re trying to follow? It’s because they’re already in. They are getting better entries than you. See #12. Stop chasing and learn to spot the setups in real time.
19: I’m an expert at ___________.
You never really master anything in the markets since they’re constantly changing and you must constantly adapt.
20: I’m going to jump in at the open.
It’s a coin flip not a viable long-term trading strategy. Works great if you have tons of sheep though!
21: I told you so.
You see this on twitter a lot. Usually from someone who is more concerned about being right than making money.
22: Draw lines on your charts.
Stocks don’t bounce off of or break through random lines on a chart. They react to price and volume. Again, see Inflection Points.
23: Check out my day trading laptop.
24: Check out my wireless mouse and keyboard.
25: Look how fast my Wi-Fi is!
26: I’m trading from the beach today.
Want to be a consistently profitable trader? Then treat it like a profession not a hobby by arming yourself with the proper tools. Trading on a beach from a laptop is a marketing gimmick.
27: Sure, you can day trade using a phone app.
28: I’m holding $XYZ overnight.
Swing trading allows you to get away with things that will crush you and your account if you do them as a Day Trader. Some people can separate the mindsets, most cannot. Can you? I can’t.
29: Check out our google ads. Did you see them on weather.com?
Just because someone has a lot of followers and spends a ton of money advertising doesn’t mean that they can teach you to trade. Most of them will only teach you FOMO and countless other bad habits.
30: I’ve never read any trading books.
Everyone should be constantly learning and trying to improve.
31: I’m a much better trader than __________.
You’re only competing against YOU and the market.
32: I’m not putting THAT trade in my tracker.
Pretending a bad trade didn’t happen will not help you. Instead, embrace the pain and learn from each and every trade, especially the bad ones.
33: I trade options, futures, forex and crypto too.
Too many people think they have to be an expert on EVERYTHING in order to be a successful trader. This couldn’t be further from the truth. The best traders I know all stick to about 6-12 plays in their wheel house. Trade only A+ Setups EVERY TIME you see an A+ Setup set up.
34: I’m not trading THAT stock, they’re probably going to do an offering!
35: I won’t trade that stock! Have you seen their PE ratio? It’s a crap company.
Who cares? We’re Day Traders. It’s these crap companies that have the potential for HUGE intraday swings. And by 4pm, we’re sitting in ca$h.
36: That losing trade wasn’t my fault.
37: The market is rigged against me.
38: As an independent trader, I have a disadvantage compared to the “big guys”.
These are all just excuses. Lies you’re telling yourself when you aren’t making money. Sure, stocks are manipulated. Algos, fakes bids/offers, HTFs, etc. are all part of the game. Learn how to trade with and/or around them.
39: No, I won’t show you my order.
Why not? Did you really not just nail that trade like you said you did? Anyone can “call” a trade. Consistently profitable traders are the ones that can consistently EXECUTE the trades. We do this to make money not to be right.
40: I’ve never made that mistake before.
Learn by doing. Learn by making mistakes. I’ve made every mistake multiple times and will probably repeat a few in the future. We’re human. Learning to control your impulses and emotions is critical but understand you’ll still make mistakes.
So, there you go! That’s the gist of what we covered in the webinar. If you have any questions and/or want more details on any of the 40, just reach out!