How to Day Trade for a Living – Andrew Aziz

Very few careers can offer you the freedom, flexibility and income that active trading does. As a trader, you can live and work anywhere in the world. You can decide when to work and when not to work. You may only answer to yourself. That is the life of a successful day trader; but it is not easy to achieve and very few succeed.

Cons

  • Steep learning curve
  • Only 16% of day traders are profitable after first 6 months
  • Profession and not a strategy to get rich quick

Pros

  • Can be executed anywhere in the world
  • Time flexible

Stocks in Play

  • Always step out of their positions at the end of the day
  • Only as good as the stocks he/she is trading
  • Trading at high volume for the day vs historical
  • Fundamental catalyst: product release, earnings, new product, merger
  • Trading independent of the market and sector
  • Premarket Scanner:
    • >2% pre market movement
    • >50K shares traded pre market
    • Avg daily volume > 500k shares
    • Avg True Range > 50cents
    • Fundamental Catalyst
    • Short Interest < 30%
  • Real Time Intraday Scanner:
    • >1$ Gap During the Day
    • Avg True Range >50cents
    • Avg Relative Volume >1.5
    • Average Daily Volume >500K shares

2% Rule

  • Rule: Live to trade another day
  • Importance of risk management: limit your losses
  • Never risk more than 2% of total capital in your trade
  • Invest in stock with high potential upside but small downside

Understanding the Candlesticks

  • Patterns in intraday prices to determine the behaviour of the market
  • Look at hourly, 5 min and 1min time frame

Support and Resistance Strategy

  • Support is the expected bottom of the price
  • Resistance is the expected top
  • Trade near the support, sell near the resistance

VWAP Strategy

  • Volume weighted average price
  • Moving average of price that also takes account of volume
  • If price is above the VWAP, then it’s bullish and vice versa