7 Things I Learned From Making $15 Million as a Day Trader

7 Things I Learned From Making $15 Million as a Day Trader
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Time Period

I’ve been trading for over 10 years, and in that time period, I made a little over 15 million dollars from day trading. In this video, I want to break down all the lessons and things I’ve learned throughout my journey.

The first thing that I’ve learned is you don’t have to trade every day. When I first started out trading, I woke up every single day looking to take trades in the market.

Now, the market will present different opportunities based on your game plan, based on your viewpoint of the market, and based on how you trade. So, you have to identify the way you trade, what your strategies are, and then with that strategy or strategies, you need to approach the market with the ideology that, hey, the market may or may not present me an opportunity today, and if it doesn’t, it’s okay to stay cash. My problem was initially I was like, hey, I’m spending four hours in front of my computer, five hours in front of my computer, I have to put on a trade, I have to buy something, I have to sell something, and that would lead me to having terrible trades or me losing money and having trades that I had no business in taking.

Present Themselves

The next thing I learned is you must adapt to the market. Over the past 10 years, I’ve realized how the market has changed year over year and how the market has seasons. The way the market is moving now, the way your trades are going now, may not happen in the next upcoming months. A quick little story: there are times where I’ve been trading, and I would have great weeks, great days, and great months.

Now, most of the times, as traders, when we have big months, big weeks, and so on, we think that momentum will continue, those opportunities will continue to present themselves. But what happens in certain situations or the market, in general, is that the market shifts its direction or it pauses in the direction it’s going in. Your job as a trader is to understand that, recognize that, and make the proper transition.

But now, when the market transitions, you as a trader have to adapt and realize that if not, what I’ve seen happens is traders start blowing a lot of money, having big drawdowns because they’re not able to recognize this big transition in the market.

Adjustment

And that just causes them to keep hammering down on the same strategy or same focus that they have on the market. So, next time you’re trading for a long period of time and you notice that a strategy is not working, take a step back and say, ‘Did the market conditions change? The strategy that I was using isn’t not working at this current moment. Why is it not working?’ and try to understand the market from a macro point of view and realize that change will happen, and when it does happen, your job is, once again, to recognize and make that adjustment.

Next, make sure you have realistic goals and you set yourself up for success. One thing that I noticed a lot of traders do wrong, including myself, is we start setting money goals and we set unrealistic goals for ourselves in the market. This creates so much pressure in our trading that causes us to take terrible trades, that causes us to take FOMO trades, and that never leads to a good thing. So, in my early days, one thing I did a lot, once again, was I would say, ‘I need to make a hundred thousand in my first year. I need to make two hundred thousand dollars on my first year. I need to make this much, my account by this date has to be at this value.

False Expectations

And once again, all that did for me was it created false expectations and it created so much pressure. I would say, ‘Well, the first year, my goal is to make sure I can improve my win percentage. My first-year goal or my goals are to make sure I can improve my risk-to-reward ratio. I can focus on my R multiple. I can focus on things that I can control.’

If you’re able to kind of build those goals and going deeper into goals could be, ‘Hey, my goal is to not take more than five trades a day or four trades a day or my goal is to not lose more than 500 a day.’ Those goals are things that we as traders can manage, and if we manage those expectations well, we allow ourselves to have the highest possibility of success.

Invalidates My Idea

The only thing that really matters in the market is risk, the risk that you put out. So, every trade that we take as traders, one thing we can control is how much we are willing to risk if we are wrong. So, before you take on any trade, one thing that should be done is, ‘Hey, if this trade invalidates my idea, invalidates my thesis, that says that I am wrong, what is the price point that I should take my exit on that will say I’m wrong, and what should that look like in a dollar value?

‘ Now, everyone will be in a different position. For some people, it could be 300; for some people, it could be three thousand dollars, depending on your account size, depending on the stage you’re at. You need to understand that once again, risk is very crucial in this journey and that is one thing that you should control and you can control.

So, before you approach any single trade, guys, make sure you have a defined area of risk, meaning, ‘Hey, if I am wrong, I will lose 300.’ And you need to accept that loss before you take the trade. One thing I did wrong in my early days is a lot of times I would say, ‘Well, I’m gonna buy this stock or I’m gonna take this trade.

P&L curve

“You will have a really, really, really difficult time taking drawdowns or accepting drawdowns or just having a healthy P&L curve in your trading. So make sure you factor in risk, make sure you accept risk, and make sure you manage risk.

The next thing I learned is that one of the main key things that every trader should be doing is they should be tracking and analyzing their trades, meaning every single trader should journal their trades. Now, when I started trading my first two years, I never journaled, I never measured, I never did anything. had no idea.

So, I started tracking my data. What is the size that I trade well with, and what is the size I trade bad with? I started looking at my playbooks, my strategies.

What strategies are effective? What strategies are not effective? So, when I started measuring and tracking these things, what it allowed me to do is it allowed me to see where am I excelling in my trading journey and where am I behind. So, I was able to cut off the heavy baggage in my trading.

Your Strategies

The next thing I learned is if you really want to have good strategies, you need to have an outlined example of your strategies, which could also be known as setups or playbooks. So, having a playbook in the market is very, very crucial. So, over the years, I’ve developed multiple playbooks. Now, my playbooks would look something like me having an entry criteria, me having an exit criteria, me having a market condition.

So, if I have a playbook for, let’s say, an opening range breakout, now my question for that playbook would be when does this strategy or when does this playbook become in effect? Now, I’ve noticed some of my playbooks become in effect when the market is reacting in a certain way. So, to break down my opening range breakout strategy, my entry criteria or market conditions would be the market would have to maybe gap up.

If I can identify those things and put it together, now I have a certain setup, certain playbook that is effective for me to trade. So, if you do have strategies, my first question to you guys right now is, if you’re like, ‘Hey, I have a strategy,’ I would say, ‘What is your strategy? What’s it called? What’s your entry criteria? What causes you to take this trade or identify this trade? What is the market conditions that this criteria needs to be under, if it needs to be under any? And where would you exit? What is your exit criteria?

And that just allows you to have something on hard paper, and that’s what you want to do. And like I said, I wish I did these things early on.

Eliminate Emotions

The last thing I learned, which I think is extremely important and I’m pretty sure you guys have also run into these problems, is that trading is about 90 percent emotional. There’s so much psychology involved in trading. I can’t stress this enough. And one thing I hear people talk about all the time is, ‘I want to eliminate my emotions.’ And my thing is, you can’t eliminate your emotions. Like, we as humans, we cannot eliminate emotions.

We can’t destroy our emotions. But what we can do is we can manage our emotions, get better at understanding ourselves, get better at understanding how we respond to certain things in the market. So, this ties back a little bit with journaling. Right? So, my question to you guys, and I want you to process this for a quick second, is how do you respond when you’re in a trade that hits your stop loss? Do you exit at that point, or do you panic and get scared and get nervous or whatever the case is? Or do you actually follow it? How do you feel internally? Right? How do you feel when a trade actually goes in your favor?

 

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