How to Day Trade for a Living

Community of Traders
Trading alone is very difficult and can be emotionally overwhelming. It is beneficial to join a
community of traders and ask them questions, talk to them if needed, learn new methods and
strategies, get some hints and alerts about the stock market, and also make your own
contributions. I personally trade in a private chatroom with some of my friends and family. We
can talk to each other and everyone can view my live screen and platform and watch how I am
trading. It is a fun, interactive environment, and we all learn from each other. I frequently
answer questions from other traders, and if there is anything I’m not sure of, I will ask other
traders. There are some experienced traders in our chatroom that I learn much from, and we tip
each other off about potential good trades and setups. We would like to grow our chatroom
slightly and therefore everyone who is reading this book is welcome to join with us. It is free, of
course, and you will benefit from both watching me trade and hearing my responses to
questions people have, including your own questions.
If you join me, you will see that quite often I lose money. It is always a good feeling to see that
losing money is not just limited to yourself, but that everyone, including experienced traders,
have to take some losses. It is part of the process. There are many chatrooms that you can join
on the Internet. Some of them are free but most of them require payment. You can join our
chatroom (of course for free) and see my screen in real time while I am trading and explaining
my strategy. You can take trades with me, or just watch and listen. You can also take your own
trades and still be part of my community. If you are interested in watching me or talking to me,
check out our private chatroom at 
www.Vancouver-Traders.com
It is extremely important to remember, however, that if you are in any community of traders,
either our chatroom or the dozens of others that are out there, you should not follow the pack.
You need to be an independent thinker. Generally, people change when they join crowds. They
become more unquestioning and impulsive, nervously searching for a leader whose trades they
can mirror. They react with the crowd instead of using their minds. Chatroom members may
catch a few trends together, but they get killed when trends reverse. Never forget that successful
traders are independent thinkers. Simply use your judgment to decide when to trade and when to
not.

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Chapter 6: 
Introduction to Candlesticks
To understand my strategies in the next section, we need to quickly review price action and the
fundamentals of candlestick charts. The Japanese began using technical analysis and some early
versions of candlesticks to trade rice in the 17
th
century. Much of the credit for candlestick
development and charting goes to a legendary rice trader named Homma from the town of
Sakata, Japan. While these early versions of technical analysis and candlestick charts were
different from today’s version, many of the guiding principles are very similar. Candlestick
charting, as we know it today, first appeared sometime after 1850. It is likely that Homma’s
original ideas were modified and refined over many years of trading, eventually resulting in the
system of candlestick charting that we now use.
In order to create a candlestick chart, you must have a data set that contains (1) open price, (2)
highest price in the chosen time frame, (3) lowest price in that period, and (4) closing price
values for each time period you want to display. The time frame can be daily, 1-hour, 5-minute,
1-minute or any other period you prefer. The hollow
 
(white) or filled (red) portion of the
candlestick is called “the body”. The long thin lines above and below the body represent the
high/low range and are called “shadows” (also referred to as “wicks” and “tails”). The high is
marked by the top of the upper shadow and the low by the bottom of the lower shadow. If the
stock closes higher than its opening price, a hollow candlestick is drawn with the bottom of the
body representing the opening price and the top of the body representing the closing price. If the
stock closes lower than its opening price, a filled (usually red) candlestick is drawn with the top
of the body representing the opening price and the bottom of the body representing the closing
price.

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