How to Day Trade for a Living

Rule 11:
Profitable trading does not involve emotion. If you are an emotional trader, you will
lose your money.
Education and practice give you a perspective of what matters in trading, how you trade, and
how you can grow and develop your skills. Once you have a perspective on what matters, you
can proceed to identify the specific processes on which to focus. The key to success is knowing
your exact processes. Often you will learn them the hard way - by losing money.
I have found that trading, sticking to my plan and the discipline inherent in my trading
methodology have had a snowball effect of positive habits in my life in general, and these habits
have contributed to even more trading success. For example, I start my trading process by
following the same routine when I get up in the morning. I always go for a morning run before
the trading session starts. As mentioned before, I live in Vancouver, Canada, and the market
opens at 6:30 a.m., my time. I wake up at 5 a.m. every morning. I go for a run from 5 to 5:45
a.m. (usually between 7 and 10 kilometers (or around 4 to 6 miles)). I come home, take a
shower, and at 6 a.m. start developing my plan.
I have found that when my body has not been active prior to trading, I will make poor decisions.
There are scientific studies showing that aerobic exercise has a positive effect on the decision
making process. People who regularly participate in an aerobic exercise (such as running for at
least 30 minutes) have higher scores on neuropsychological functioning and performance tests
that measure such cognitive functions as attentional control, inhibitory control, cognitive
flexibility, working memory updating and capacity, and information processing speed. You can
easily read about these topics on the Internet or you can email me in our chatroom and I will
send you some videos and information about these facts. I stopped drinking coffee and alcohol,
and I have stopped eating animal-based food, and my performance levels have increased
significantly. Not eating meat and fish (any living beings that are marked with blood), and not
using alcohol, coffee, tobacco and all other drugs lifts you above the curse and accelerates you
forward in every aspect of life.
In day trading, simply being better than average is not sufficient. You must be significantly
above the crowd to win in day trading. Unfortunately, day trading often appeals to impulsive
people, gamblers, and those who feel that the world owes them a living. You cannot be one of
them, and you should not act like one of them. You need to start developing the discipline of a
winner.Winners think, feel, and act di f f erently than losers. You must look within yourself,
discard your illusions, and change your old ways of being, thinking and acting. Change is hard,
but if you want to be a successful trader, you must work on changing and developing your
personality. To succeed, you will need motivation, knowledge, and discipline.
Now, back to trading: as discussed previously, trading cannot be looked at as a hobby. You must
approach trading seriously. As such, I wake up at 5 a.m., go for a 30-to-45-minute run, take a

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shower, get dressed, and eat oatmeal for breakfast prior to firing up my trading station at 6 a.m.
I am awake, alert, and motivated when I sit down and start building my watch list. This morning
routine has tremendously helped my mental preparation for coming into the market. So,
whatever you do, starting the morning out in a similar fashion will pay invaluable dividends.
Rolling out of bed and throwing water on your face 15 minutes in advance just does not give
you sufficient time to be prepared for the market’s opening. Sitting at your computer in your
pajamas or underwear does not put you in the right mindset to attack the market. I know,
because I have experienced all of these scenarios.
My watch list comes from a specific scan that I use every morning. I will not look anywhere
else because I am confident that the stocks on that scanner will have the best opportunity to set
up for me to trade. I will vet each stock in the same way, using a checklist where I can
determine if it is actually tradeable for me. My watch list is built by 6:15 a.m., and I will not add
anything to it after that time because there won’t be enough time to review new stocks and plan
for a trade. This allows me to watch the tickers on my watch list for the 15 minutes prior to
opening. This actually leads into the next step in my process.
During the 15 minutes prior to opening, I watch the tickers on my watch list and develop trade
plans for them based on the price action I am seeing. This is the most difficult part, and it
requires experience, knowledge and education. Many traders fail at this step. When the bell
rings at 6:30 a.m. (9:30 a.m. New York time), I’ll have my plans in place written on note cards
because it is too easy to forget what I’ve seen on each ticker coming into the open. What is my
plan if it sets up to the long side? What’s my plan if it sets up to the short side? What setup do I
want to see? What are my profit targets? Where will my stop be? Is the profit window large
enough for the trade to make sense? Just asking yourself questions like these when you are
planning your trades will give you a significant advantage because you can then go in with a
battle plan and stick to it. If it is written down close to my face I can easily refer to it, and that
eliminates the anxiety that I used to feel when that bell rang. All I am doing at the opening is
looking for my signal and trigger to enter the trade.
In the example above, I saw that SRPT had gapped down 15%. I knew that there wasn’t much
interest in buying the stock. Who would dare to buy when a stock gapped down 15% overnight?
Most investors are actually trying to get out and sell before it goes down even further, as though
there’s something seriously wrong with the company. I could not find any support or resistance
nearby, therefore I decided to watch VWAP and chose a VWAP short trade.
Once the stock sets up, signals, and triggers an entry, I will enter without question (well, that’s
the plan anyway). Sometimes I may second-guess myself, but not too often. I have my profit
targets written out on my trade plan, as well as the technical level that I am basing my stops on,
so after entry I am just concentrating on hitting my marks and booking profit. There are some
that say that knowing when to exit is the hardest part of the trade. It can be extremely tough not
to exit the trade too early if you do not have a pre-set plan. If you have a plan ahead of time and
you stick to it, you will have a better chance of letting your winning trades work and cutting
your losses off quickly instead of the other way around. This will also help with managing your
emotions while in the trade. Recently I talked to one of my students about filtering out the

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noise. This strategy goes a long way to help do that so you can focus on the trade.
Once the trade is done, I will reflect on how well my plan worked and how well I stuck to what
I had written. Most of the reflection on my trades will come in the evening when I review and
recap my trades from the day. I believe one of the key things forgotten by many is reflection.
“What did I do right?”, “What did I do wrong?”, and “Should I have sold earlier?” are all
extremely important questions for the development of your trading. Just because you made good
profits doesn’t mean you are a perfect trader. How you play both sides of the table are extremely
important. Write down or do a video recap of the trade and everything that comes to mind
lesson-wise, and then file it away with other past lessons, and use them all as a reference for the
future. Some lessons hit harder than others, but be confident that with time you will only get
better. It only takes one incident of getting your hand slammed in a door to figure out that you
must be more careful, but it may take two or three times to learn to turn on the lights before
walking around your house at night.
Why is this process in trading important? This process is important because it describes how
things are done to prepare for a trade and then provides the focus for executing them. It helps to
filter out the emotional social noise and gives you a better chance for a more successful winning
trade. It provides you with a tool to go back to and reflect on your trades and makes you a better
trader. If you focus on the right processes, in the right way, you can design your way to trading
success.

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Chapter 9: 
Next Steps for Beginner Traders
Successful day trading is based on three important skills.
1. You need to analyze the balance of power between buyers and sellers and bet on the
winning group (Chapter 6).
2. You need to practice excellent money and trade management (Chapter 3).
3. And you need sufficient self-discipline to follow your trading plan, to avoid getting
overexcited or depressed in the markets, and to resist the temptation to make emotional
decisions.
Now that you have read this book, you should be in a better position to make a decision on
whether or not day trading is right for you. Day trading requires a certain mindset, as well as a
discipline and a set of skills that not everyone possesses. Interestingly, most of the traders I
know are also poker players. They enjoy speculation and the stimulation that comes from it.
Although poker is a type of gambling, day trading is not. Day trading is a science, a skill, and a
career, and has nothing to do with gambling. It is the serious business of selling and buying
stocks, sometimes in a matter of seconds. You should be able to make decisions fast, with no
emotion or hesitation. Doing otherwise results in losing real money.
After you’ve made up your mind and decided that you want to start day trading, the next step is
to get a proper education. You should never start your day trading career with real money. Sign
up with one of the brokers that provides you with simulated accounts with real market data.
Some brokers give you access to delayed market data, but don’t use those. You need to make
decisions real time. Most of the simulated data software is a paid service, so you need to save
some money for that software. DAS Trader (
www.dastrader.com
) offers simulated accounts for
$120 per month. If you use it for one year and trade only with simulated money, it will cost you
only $1,440. This is the cost of a proper education. If you are seriously considering day trading
as a career, it’s a small expenditure compared to the cost of an education for a new profession.
For example, imagine that you want to go to school to get an MBA - it will easily cost you over
$50,000. Likewise, many other diploma or post-graduation programs cost significantly more
than the education required for day trading.
Once you have a simulated account, you will need to develop your strategy. Try the strategies
that I have discussed in this book, and master one or two of them. VWAP, Support or
Resistance, and Reversal Strategies are the easiest. You need to only master a few of them to
always be profitable in the market. Keep your strategy simple. When you have a solid strategy
that you’ve mastered, make sure there is no emotion attached to it.
Practice with the amounts of money that you will be trading in real life. It is easy to buy a
position worth $100,000 in a simulated account and watch it lose half of its value in a matter of
seconds. But could you tolerate this loss in a real account? If not, you will probably become an

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emotional trader and make a decision quickly, usually resulting in a major loss. Always trade
with the size and position that you will be using in the real account. Otherwise, there is no point
in trading in a simulated account. Move to a real account after at least three months of training
with a simulated account and then, start small, with real money. Trade small while you’re
learning or when you are feeling stressed. If you wish, you can always have a chat with me in
our chatroom and receive some guidance.
Continue your education and reflect upon your trading strategy. Never stop learning about the
stock market. It’s a dynamic environment and it’s constantly changing. Day trading is different
than it was ten years ago, and it will be different in another ten years. So keep reading and
discussing your progress and performance with mentors and other traders. Always think ahead
and maintain a progressive attitude. Learn as much as you can, but keep a degree of healthy
skepticism about everything, including this book. Ask questions, and do not accept experts at
their word.
Join a community of traders. Trading alone is very difficult and can be emotionally
overwhelming. It is very helpful to join a community of traders so you can ask them questions,
talk to them, learn new methods and strategies, get some hints and alerts about the stock market,
and also make your own contributions. If you join me, you will see that I often lose money. It
can be comforting to see that losing money is not limited to you, and everyone, including
experienced traders, has to take a loss. As I’ve said, it’s all part of the process. There are many
chatrooms that you can join on the Internet. Some of them are free, but most of them charge a
fee. By joining our chatroom (for free), you can see my screen in real time while I am trading
and listen as I explain my strategy. You can take trades with me, or just watch and listen. Or you
can take your own trades, but still be part of our community.
It is extremely important to remember however, that if you are in any community of traders,
either our chatroom at 
www.Vancouver-Traders.com
or the dozens of others out there, you
should not follow the pack but should 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 not to.
Last but not least, if you enjoyed reading this book and found it useful, I would very much
appreciate your taking a few minutes to write a review on the Amazon website. The success of a
book like this is based on honest reviews, and I will consider your comments in making
revisions. If you have any feedback, feel free to send me an email. Your review on Amazon will
help other people to make informed decisions about my book. I purposely priced it low so more
people would be able to purchase it and use it. Teaching people and helping them to start a new
career fulfills something inside of me that motivates me every day, so I hope you can help me to
accomplish this task of ongoing learning.
If you’re ever interested in connecting with me, check out our private chatroom at

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www.Vancouver-Traders.com
or send me an email at 
[e-mail]
. I’d be
happy to have a chat with you.
Thank you, and happy trading!

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