Intro to day trading for beginners! What is a day trader? A pure day trader buys and sells stocks and ends the trading day in cash with no open positions. A swing trader holds positions overnight or for several days. Most day traders use a blended strategy, where some positions are closed out during the trading day and others are held for a short duration of time.

Day traders use a professional high frequency trading platform through direct access brokers. They connect with high speed internet connections and use a multiple monitor computer system. Day traders use technical stock analysis as the basis for their trading strategy. Day traders have little or no concern about the fundamental strengths or weaknesses of a company. Day traders use charts and data to determine patterns, volumes and price movements. Common technical indicators used are support and resistance levels, MACD, SMA, volatility, price oscillators, Bollinger bands, candlestick patterns and RSI.

Most day traders make money on relatively small price movements in liquid stocks or indexes with mid to high volatility. Positions with higher volatility have higher risk, and higher risk means greater swing potential. Positions with lower volatility have lower risk, and lower risk means lesser swing potential. A successful day trader plans the entry and exit point of a trade before execution. Some trade one to two stocks a day while others trade a small handful of stocks. Successful day traders learn the personalities, or the volatility, of certain stocks under differing market conditions.

Day traders often trade in margin accounts to increase leverage. Since day traders often trade in and out of stocks multiple times a day, this racks up commission costs. Many traders need to borrow money in order to make a profit. In a margin account, you are buying an asset and the buyer only pays a percentage of the asset value and borrows the rest paying interest on the loan.

On average, 10% of day traders are successful and 90% are not.

Successful Day Traders (10%)
1. Study the personalities of a few stocks.
2. Identify entry and exit points before executing a trade.
3. Trade in a sophisticated platform.
4. Watch multiple technical indicators to predict price movements.
5. Sell as soon as the planned exit point is reached.
6. Cut losses ASAP.
7. Trade without emotion.

Unsuccessful Day Traders (90%)
1. Trade any stock as they have no criteria.
2. Buy on impulse and sell out of fear.
3. Watch too many indicators, information overload.
4. Have no plan for the trade.
5. Ride winners into losers out of greed.
6. Trade based on emotion.

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Nate O'Brien says:

Any book recommendations on technical analysis? I’ve read a few but I’m looking to learn more about it. Awesome video by the way!

Carlos Cubias says:

You should make a video explaining some stocks that have the best price swings for beginners that want to become day traders

Pavorish says:

8:51 Any cunt, eh? :^)

rui manuel says:

Now I notice you Death Wish coffee sticker! Is it powerful as they say?

guitpizz says:

Hi Ryan, nice video. However I need to add that there are a TON of different styles of day trading. No different than fishing. Some like to fly fish salmon, others are OK pulling some mackerels from a dock while having a smoke with their old pals. A very rewarding style for the top level pros it to trade the hot momentum stocks of the day really close to the open. However, like racing formula it is high rewards but very, very high risks for beginners and even intermediates. You need perfect timing and discipline to cut your losers fact, hotkeys are preferable, etc. I have seem some guys really good at it but this is not for me right now. At the other extreme you have those guys that only trade the same stock or 4-5 maximum. It’s like a farmer milking his old jersey cow every day for daily living with low risk as typically you will get to know the moves of this stock. Mine these days is AMD. It moves nicely and it is very liquid. That drop the other day was nothing. I saw the whole thing on the level 2 second by second as I knew the night before that the stock would be decimated. I don’t short but I enjoyed the show to see if it would be as volatile as those crazy pharma stocks that crater 100% or go up 100% in a day after a big news. Not even close. Nice smooth and orderly drop so unless someone (a daytrader) was in a coma, they could have gotten a million times. So the bottom line is that AMD will typically give you a few 30 cents moves or often more a day that are relatively easy to catch if you are not too greedy. So someone who trades 1000 shares and who gets let’s say two tiny 25 cents sings a day is still $500 in a day. That same guy can also have a long term position. Nothing wrong with that. I am only trading 200 shares right now and I can only trade the first hour though I trade for several hours when I am off with the kids. If I catch a low entry for the day and the stock is up when I go to work I either take some profit and try to put the stop at break-even so I can exit on my coffee break or lunch. It is key to find a nice jersey cow that won’t catch you by surprise. AMD is cheap and very liquid. However other stocks like DAL are big and liquid but it has longer candle and it swings a lot more than AMD. AMD is more grand-pa but safer for the day trader wanna be. Best is to trade it daily with even 50 shares just to get some skin in the game. However if you don’t pay let’s say a penny per share and you pay $10 to get in and $10 to get out, it might be better to paper trader it for a month, the go with bigger size. Zero need for margin. Keep in mind that what I am describing is not as sexy as what we read online with those kids with a powerboat packed with hot chicks… but that’s all garbage. None of the few solid day traders I know has a lifestyle like that. Can’t get into details but your screen set-up, etc. is absolutely key as stocks like AMD do react to certain levels, etc. and you need that stuff in your face. Anyway, for all of you that got killed trading the wrong stocks day trading there is a light at the end of the tunnel and it does not have to be the Midnight Express. It is doable but find a few safe set-ups and one or two grand-pa stocks. Make those $20 trades several times a week, then grow your trading size once your batting average is solid. There is nothing wrong with $500 USD a day if you can trade all day.

chester field says:

where did you learn this stuff? I like your videos and the way you display it. also I like how you input your personal experience…. but I wanna know how you became knowledgeable, I will still support the channel, but when you talking about my hard earned money in something you can understand why I can be cautious

Robert Caldwell says:

Just to clarify….100% of daytraders use technical analysis and 90% of them fail, so it shows how much technical analysis actually works. It’s like walking into a casino and seeing the last 10 numbers on roulette being red, and then you bet black because you think it’s going to normalize….or betting red because you think it’s going to continue the trend…..somebody is going to be right and keep their money, the other people are going to be wrong. Over time, more people are wrong about their assumption on the position of the stock than they are correct, when it deals directly and ONLY with the price action.

Are there patterns with charts? Sure, humans have the tendency to see patterns in many things in life, like faces in toast…..the problem is that humans see these patterns AFTER the fact. You might get lucky in repeating the pattern that you saw if it comes out again, but the chances become slim….and EVERY one seems to think their way is the “correct” way. I use some myself, and I might tout my own programming skills in defining a stock movement, but I make sure that I always disclaimer that it doesn’t always work…..and I always look at the underlying fundamentals.

The ones I use are:

Implied Volatility (or 14-day ATR, which is similar) to determine if options are pricing high in explicit value
30-day (sometimes 45-day) future expansion prediction algorithm based on ATR (my own design) to determine where the minimum and maximum possibility the stock will be at so that I can set my options strike correctly
30-day standard moving average but I hardly determine anything off of it, just lets me know what other traders are seeing

That’s it, here’s an example:

Here’s another thing about daytrading….you can make as much money as any of the 10% simply by flipping a coin, set a profit limit at 5 times your stop limit, and done. The idea is that you will be 50% right in your “guess,” but receive 5x if you are correct, while losing only 1x if you’re wrong…..over time, you’ll make money. This is effectively the only reason they are the 10%, because of stop-loss maneuvering (methodical).

Another way you can actually make money in daytrading (if you have a LOT of bankroll), is be a market maker with wider spread. For example, let’s say you pick CAT and it opens at $101.50, and it has been trading with a high-low spread of $1.20….so you put a buy order of 1,000 shares at $101 and a short of 1,000 shares at $102 (50 cents each direction of the open). You are hoping that both orders get hit at some point during the day, just not sure in which order, giving you $1,000 profit. The following day, if one of your orders didn’t hit, you sell 8 Calls (if you bought) or 8 Puts (if you’re short) at that price level for the next month, giving you an extra 200 shares to add to the daily position to rinse and repeat. You can shorten the spread more to reduce your open risk, but at a daily profit reduction. You could also have more spreads in recursion for capture and refill during the day if you plan on sitting at the computer all day……but all in all….you do not need 6+ monitors, high speed connection with 50+ stocks open and 10+ hours invested, 10 minutes is all I need to set all my positions.

jim H says:

tons of very useful information here good job

Dy Lo says:

first comment! Just checked your page to see if you posted anything about this AMD stock drop! IDK if its a good day to buy or not! Really looking forward to your opinion! hae a great day handsome too 🙂

Freeman Fry says:

Do you have any idea why it’s required for a pattern day trader to use a margin account? It sounds like they are trying to increase the chance of traders losing a lot of money.

shante edwards says:

Great video, didn’t know the qualifying criteria to be a day trader.

Dude Gaming says:

would you recommend optionshouse or td ameritrade for a beginner looking to get in the stock market?

Shawn Coleman says:

Good information, easy to understand. I had no knowledge of day trading or swing trading before watching this, but now I feel I could have a good conversation with some of my friends who seem to do this. Thanks.

Ryan Scribner says:


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