"Buy when there's blood in the streets, even if the blood is your own." -Baron Rothschild
1) The first thing to do is learn sentiment analysis. You do this by watching a fund and then reading the news that you think will affect sentiment of that fund. Then you take a guess, and start to get an idea of what percentage of the time you are right. When you get to 65%, you are in a safe zone to start making money.
2) Next, is all about how to maintain that number, which at this step, comes to eliminating mistakes. That is why most of these next steps, will all be subsections of number 2.
2A) The more brokerage accounts you have, and the faster you can get to them on pc as well as phone, saves you seconds, and that offers protection. It also offers flexibility to exploit opportunity, which can increase profits.
2B) The more diversified your funds are, the more protection you have.
2C) The amount of diversity, needs weighed with the amount of diligence you can give them. It is better to have 100% diligence on 1 fund, than 95% diligence on 2.
2D) Extended trading hours lie about the price of the stock. This is because, people who don't have extended trading hours... their stock buy and sell orders that they put in previously, often disappear out of view when the market is closed to them. I'm not going to explain how stock price (SP) is calculated from bid/ask, but the point is, not getting fooled by this protects you.
2E) Human emotion is a killer, and is no joke. When you make a nice chunk of money it can make you crazy. When your stock takes too long to move it can make you crazy. When it goes the wrong direction, but not fast enough that you need to pull your funds out yet, it can make you crazy. When the mind heats up, it can be more impulsive and make panic or greedy decisions. Although these type of quick decisions don't usually break the bank, they can take a chunk out of your gains, and if you save yourself from losing enough chunks, all of a sudden you're making good money.
2F) You might think certain indicators are stupid, but if other people use them, they matter. The reason is, the indicator doesn't actually matter at all. That would be technical analysis. The reason technical analysis matters primarily, is because other people think it does, and therefore, should be looked at as sentiment analysis. This is an important distinction, because if you prioritize technical analysis, you will have a 2D view in a 3D world and not be able to creatively be flexible. In fact, I spent the first 2 years trading never looking at indicators or support and resistance lines. Then when I started using them, turns out the places I had learned to eyeball support and resistance, were almost identical. Relying on indicators can make a trader weak, however, it is still important to use them, because a portion of traders will buy and sell based on them, and so you need to buy or sell just before they do. For example, if you are coming up on 10,000, you sell at 99800.
2G) Check the average volume of the stock. If it is very small, then you might not be able to sell if you need to without losing a large chunk.
2H) Don't trade stocks that don't have the same reporting requirements to the SEC, such as OTC markets, and I could be wrong but, I think Chinese markets. I followed a company YRIV and their court case for about a year and it appears to have been just a shell company the whole time based in China to avoid SEC regulations. Granted, you can make money from stocks like that, but the risk of them getting sued is higher, which creates negative sentiment and a lowered SP.
2I) stocks under a dollar on certain exchanges periodically get sent SEC letters warning of delisting. This always causes a temporary drop in price.
2J) This whole section pertains to stocks around a dollar or less but not in the OTC markets ever. My goodness. Dilution and stock splits always kill stocks. This happens mostly with stocks priced under a dollar. Now, stocks under a dollar also have a lot of pump and dump schemes. The trick with these stocks is to find a whale investor (someone with a lot of share buying power) who has an online reputation, or, seek out accumulation in a stock which can be seen with an increase in volume of a stock without much of an increase in price over a period of time, then you can at times even triple your money. The problem is, sometimes these whales don't do what they say they are going to do, and that risk, along with the risk of dilution and stock splits require a lot of diligence. Dilution usually follows a pattern such as right after a surge in price, but not always. You can pull up their 10k and 10q financials and see how much money they have, but that doesn't mean they won't want more money. What you do need to know though is if they are losing money each quarter, which means they have to dilute the shares in order to stay open, so it is always just a matter of time. Stock splits are meant to avoid being delisted, and we always know how long a company has to get above a required stock price, and they usually don't do a reverse split to get above the price right away, but rarely it does happen, and if not watching, can lose a chunk of cash. This whole paragraph is about stocks around a dollar in price or less.
2K) Trying to understand cryptotechnology by understanding the political system of banking and the key players involved, I have found to be just as difficult as trying to understand oil. I did make 800% one time, but for now I don't touch it, or oil. A few years ago IPO's were really hot for pump and dump schemes, but that has largely cooled down as far as making easy profits.
2L) Biotechnology . Very unreliable! What you have in this group is basically a group that is excited about curing something like cancer, and you see progress being made as far as going through safety checks, then initial trials etc.. but this can take years, there is no guarantee that the drug will be effective, or safe, and as soon as it is not, it will tank. You can sign up for their website to email you with any press release, but you really have to act fast if this happens or you can loose a chunk of cash. Now if biotechnology is priced around a dollar, it is better to just look at it as a worthless pump and dump scheme. Some of them turn into a real company, most fail so that is important to realize. They are not for long term holding.
2M) When reading the 10k and 10q financials from a business. They paint a picture, but you always have to look at it as wishful thinking. If you find yourself asking "why don't they just do this instead," the answer probably is, they can't, and they aren't good enough to." Just because a ceo might be brilliant, it doesn't mean they are brilliant FOR the company, or get his... For you.
2O) Entry and exit. Time of day do have different patterns. For example beginning of day and end of day have much higher volatility. Many of these patterns exist and they are important. Never use a market order unless you are 80% confident or more in quick movement of a stock. One of the main feelings I tend to notice in myself and others when jumping in to a "stock battle" and that IS what it feels like, is that the second you get there, you are going to miss the bus, and miss the party and be late. Don't do this. It is better to miss the party, than to get on the wrong bus. because you took shortcuts. The same goes for laziness. People really want to get rich. The force is strong!! But look at this way. The trick to winning and becoming rich, is really just not screwing up as much as the other guys. Same is true in poker. When you just say "screw it, I'm going in" you submitted and gave in to weakness. Why do you think most people do not invest in the stock market? It is not that hard a skill to learn honestly. It is because the forces of greed and evil, are extremely strong, in everyone, and so really, succeeding in the stock market is really as simple as succeeding in ourselves.
2P) Now, finding stocks. I use finviz screener and i use stocktwits for trends and chatter. There are many message boards I do not use but likely would benefit from. And many other tools and screeners out there. Finviz has a filter for fundamental analysis, technical analysis, and descriptive, like filtering by price or market cap etc.
2Q) High Frequency Trading (HFT). This has been the way of becoming filthy rich of the last decade. Everytime you make a stock trade, if it is a high volume stock, you probably just got manipulated by a computer. Don't let this get you down. Just remember to breathe. Your goal isn't to be number 1 here. Your goal is just to become rich, a much easier goal. Becoming number 1 would require... well just read the book flash boys if you want to know. Don't worry about it. There are tons of retail traders to make money from. Don't worry about if computers or big whale price manipulators make their share too. In fact, you can even profit from large firms if you see what they are doing. I'll talk about that next point.
2R) Now a lot of trading by the large firms happens in dark pools which are hidden from the public eye for the most part. There IS currently a way to see their orders, however, the only problem is you can't see if they are buy or sell orders, you can only see how big they are LOL. Anyway this is a technique I was getting ready to incorporate during my last run. Disregard for now. If you are confident which direction the large firm is going, you can go with it. You can also wait till it starts to move in that direction as well, which is a common technique used by a small community who tracks these dark pool "prints."
2S) Marty Schwartz wrote a book called Pit Bull. He averaged I think 600% a year. Yes gains. A bit more than the 10% a mutual fund offers yeah? Lmao. Anyway he did something I like to do as well. When you are wrong, just get out. Just take the loss and get your skill up so that you are right more of the time. That's my .02 on it. The only exception is in extended hours. I did that during extended hours and had a 900 dollar loss. Granted I was up 1500, but still. This relates to the "extended hours stock price lies section I wrote about earlier. If I had just waited until the market opened, and realized that I was actually ahead of the curve in seeing the trend, then I would have realized that no one was bailing out just yet and many still had wishful thinking, and I could have sold for no loss in normal hours.
2T) Stay in the game. You can't learn and refine your skill if you don't stay in the game. You can't find those gold once in a life time opportunities if you do not stay in the game. It is better to go slow and cautious, and just put in enough skin in the game to make sure you are diligent to learn, than it is to get knocked out of the game. When you are knocked out, you lose the motivation that comes from having skin in the game, and so you not only lose profit, but you lose learning, which has the ability to exponentially increase profit.
2U) Shorting stock, which is basically making money when a stock goes down, is sometimes the best way to make money. The trick, is that many brokerages do not have this ability. You basically have to "borrow a share" and so a brokerage firm to offer this option, has to have enough shares on hand and be willing to lend them to you so that you can do a "short sale." Interactive Brokers I have heard is very good for this, but now that they are all offering zero commissions, I need to check to see if this has changed.
2V) Options. I've never messed with them, but I'll need to learn them. Options I believe allow you to get around the 3 day trade rule. Basically if you have less than 25 thousand in your account, you can only buy and sell the same stock in the same day, three times a week. I had to switch firms once when I got my account locked because of this. This is another reason to have many accounts open, and also to know how long it takes to move money. Usually you need to move money into your bank account and then to the new firm. And you can't just send shares without a fee a lot of the times too, so you have to sell them, then buy them in the other firm. s far as I know.
2W) ADD. Computer nerd. These are huge gifts to have when trading. ADD means you love watching all the charts fly across the computer screen or phone, and computer nerd just makes it doubly so. I would say introverted helps as well, but a lot of traders just make podcasts or run groups or take their laptop out to the beach and travel to make up for that need. But basically, if you are literally only a few seconds away from the trigger, you can defend yourself better than someone who only checks their phone once every couple hours. Air traffic controllers would make good day traders.
2X) If you take a loss, don't go in on another stock until you have analyzed and understood exactly what you did wrong. Never make the same mistake twice.
2Y) Be extremely aggressive. I know this sounds like the opposite of all the caution I've been saying. Not true. If you are wrong, get out. If you are not sure, don't go in or get out at an opportune time. If you are recovering from the emotional shock of a recent loss, go in with a much smaller position than you otherwise would have to make sure you get on the horse, . But when you are in, follow your instinct. Scared trading will result in more mistakes than aggressive trading. Now here is some perspective as well. Women traders are shown to do better than men. Granted there aren't enough of them to really get a good statistical comparison, but they tend to handle their emotions better and stick to a system. But I say aggressive because when you have a good hand, you should increase your bet, and sometimes aggression is necessary to get over the hurdle of being scared to follow the gut. Like in the military... you have to trust that your training will take over in the moment. Not all systems will be perfect when facing the enemy. You have to be aggressive, but also extremely patient. Both.
2Z) Automation. Once you have a few million, there are other options to make money other than day trading, such as corporate hostile takeovers, or wielding influence in other ways to try and influence a stock price in a legal way, or run your own firm and charge fees to clients. However, if someone wants to remain a day trader at this level, then automation can really help. It is quite possible to write scripts in order to retrieve news, set notifications, find opportunities, and even execute a lot of trades for you A lot of this is already available, except for the "seeing opportunities" part. Likely at some level, a programming language would need to be learned or partnering with someone of that nature would need to be done.
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