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More About This Title The Truth About Day Trading Stocks: A Cautionary Tale About Hard Challenges and What It Takes to Succeed
English
The Truth About Day Trading Stocks
A realistic guide to day trading today's stock market
In terms of the potential for heavy financial losses, day trading is a high-risk profession. No one should contemplate day trading without giving thought to the ways he can lose, and all the ways to lessen or avoid them. Yet many people enter the game with unrealistic expectations, unaware of what it takes to succeed. Seminars and software alone do not make a successful day trader, cautions author Josh DiPietro. Instead, a trader must learn hard lessons of self-discipline, consistency, and staying in the game for the long haul to have a real chance of success. In The Truth About Day Trading Stocks, DiPietro offers the amateur day trader a brutally honest look at the pitfalls of day trading—and how to hopefully avoid them.
Written in an engaging and sometimes humorous tone, The Truth About Day Trading Stocks draws on the author's own experiences as a day trader to offer a clear-cut departure from typical "golden goose" strategies promising instant wealth. Instead, he attempts to slow down the dangerous fervor of the average amateur and demonstrate the ways you can become a professional and not lose your shirt in the process. The Truth About Day Trading Stocks shows how trading decisions are bent and shaped by emotions, and why it is critical to know yourself, understand risk, and remember that increasing your skill level is a gradual, ongoing process—there's always more to learn! After dispensing with popular illusions, DiPietro proceeds to offer realistic, practical trading advice—comparing pay-per-trade with pay-per-share brokers, determining which works best and when, offering suggestions on how to avoid the prospect of perfect trades turning ugly, and more. At the end of the book, he also includes a section called "Rules to Remember," a list of over eighty rules, simply stated and easy to grasp, to benefit amateurs' performance.
Throughout the book, the author describes his development of acute self-awareness while figuring out how to succeed. Through that blunt self-portrayal, the goal of The Truth About Day Trading Stocks is to help you create a disciplined mind-set and apply it to your own successful trading style.
English
JOSH DIPIETRO has been day trading stocks for ten years. He operates a web site (www.daytraderjosh.com) and provides training programs for aspiring day traders. DiPietro's trading approach involves making many trades every day, taking small profits, exiting losing trades quickly, and minimizing transaction costs. He is a critic of the educational paths offered by the established trading industry and is dedicated to providing an alternative educational approach for aspiring traders.
English
Preface xiii
Acknowledgments xvii
Introduction: The Wholehearted Amateur 1
PART I Psychological Truths and What to Do about Them 5
CHAPTER 1 Truths about Yourself to Know First 7
How Often Do You Trade, and How Profitably? 10
How Much Are You Trading in Capital and Leverage? 10
How Long Have You Been Trading? 12
What Financial Instruments Are You Trading? 13
Are You Trading Other Peoples’ Money or Your Personal Capital? 13
Are You a Licensed Trader, or Trading Independently? 13
How Were You Trained? 14
Rules to Remember 14
CHAPTER 2 How Emotions Can Destroy a Trade 15
The Fear Factor 16
Greed Is Not Good 18
Rules to Remember 21
CHAPTER 3 Preventing Overconfidence 23
Ignoring Your Predetermined Stop/Loss Price 24
Holding Too Long 24
Rules to Remember 26
CHAPTER 4 From Impatient to Cool, Calm, and Collected 27
The Waiting Is the Hardest Part 29
Deciding to Learn More 31
Rules to Remember 33
CHAPTER 5 Taking Breaks 35
Break When Your Confidence Is Low 38
Break Because It’s Just Not Working 38
Break and Then What? 39
Rules to Remember 42
PART II The Truth about Your Risk 43
CHAPTER 6 The Importance of Risk Management 45
The Amount of Trading Capital Allocated to Each Trade 46
The Timing for Allocating Capital to a Trade 47
Overexposure to Risk 48
The Stock or Company You’re Trading 49
The Time of Day You’re Trading 49
Gambling 50
Rules to Remember 51
CHAPTER 7 Why Overexposure to the Market Can Hurt 53
Time versus Timing 54
Rules to Remember 58
CHAPTER 8 Budgeting: Knowing Your Financial Limitations 59
Don’t Quit Your Day Job: Catch-22 60
Crunching the Numbers 62
Cushion Cash 63
Rules to Remember 64
CHAPTER 9 Minimizing Your Risk with Stop/Loss 65
Making Stop/Loss Automatic 65
Rules to Remember 71
CHAPTER 10 Averaging-Down: A Skilled Strategy 73
To Average-Down Successfully Takes Mastery 74
Know-How Doesn’t Grow Overnight 75
Rules to Remember 77
CHAPTER 11 Gambling versus Day Trading 79
Rules to Remember 82
PART III Intraday Trading Truths 83
CHAPTER 12 Why Some Traders Make
More Mistakes 85
Pick Your Stocks Carefully 86
Focus, Focus, Focus 87
Pay Attention to Market-Moving News 90
Rules to Remember 91
CHAPTER 13 Trading Consistently All Day 93
Rules to Remember 98
CHAPTER 14 Stock Picking: Simplifying the Process 99
Your Stock Should Have an Average Daily Volume of One Million Shares or More 100
Choose Stocks between $10 and $100 101
Pick Stocks That Display Tradable Intraday Price Swings 102
Don’t Trade Stocks Affected by Strict Federal Regulations 102
Beware of Stocks Directly Affected by Current News Headlines 104
Rules to Remember 105
CHAPTER 15 Why News Can Be Just Noise 107
Trading on News versus Monitoring News 109
Rules to Remember 111
PART IV The Truth about Training and Preparation 113
CHAPTER 16 About Those Training Programs 115
Seminars for the Greenhorns 116
Training Programs for the More Experienced Trader 119
Tips for Selecting the Right Program 120
Rules to Remember 123
CHAPTER 17 Picking the Right Online Broker: Pay-per-Share versus Pay-per-Trade 125
Starting Out with Pay-per-Trade 125
Transitioning to Pay-per-Share 126
High Leverage Pros and Cons 130
Hang on to Your Pay-per-Trade Account 131
Rules to Remember 132
CHAPTER 18 Paper-Trading Strategy 133
Paper Trading for the Amateur 134
A Word about Advanced Paper Trading 139
Rules to Remember 140
CHAPTER 19 Trading for Skill versus Trading for Income 141
Building a Foundation of Trading Skills 141
First Level 144
Second Level 146
Third Level 147
Summary 148
Rules to Remember 150
CHAPTER 20 The Perfect Trading Day 151
Early Morning Activities 151
Pre-market Trading 153
The Opening Bell 156
Midday Activities 157
The Last Hour of Trading 159
The Closing Bell 160
After-Market Trading 160
Homework 161
CHAPTER 21 The Worst Trading Day 163
Early Morning Activities 163
Premarket Trading 164
The Opening Bell 166
Midday Activities 166
Last Hour of Trading 167
The Closing Bell 168
After-Market Trading 168
Homework 169
Conclusion: Parting Words 171
Appendix: Rules to Remember 175
About the Author 181
Index 183
CHAPTER 2 How Emotions Can Destroy a Trade.
The Fear Factor.
Greed Is Not Good.
Rules to Remember.
CHAPTER 3 Preventing Overconfidence.
Ignoring Your Predetermined Stop/Loss Price.
Holding Too Long.
Rules to Remember.
CHAPTER 4 From Impatient to Cool, Calm, and Collected.
The Waiting is the Hardest Part.
Deciding to Learn More.
Rules to Remember.
CHAPTER 5 Taking Breaks.
Break When Your Confidence is Low.
Break Because It's Just Not Working.
Break and Then What?
Rules to Remember.
PART II The Truth About Your Risk.
CHAPTER 6 The Importance of Risk Management.
The Amount of Trading Capital Allocated to Each Trade.
The Timing for Allocating Capital to a Trade.
Overexposure to Risk.
The Stock or Company You'Re Trading.
The Time of Day You're Trading.
Gambling.
Rules to Remember.
CHAPTER 7 Why Overexposure to the Market Can Hurt.
Time versus Timing.
Rules to Remember.
CHAPTER 8 Budgeting: Knowing Your Financial Limitations.
Don't Quit Your Day Job: Catch-22.
Crunching the Numbers.
Cushion Cash.
Rules to Remember.
CHAPTER 9 Minimizing Your Risk with Stop/Loss.
Making Stop/Loss Automatic.
Rules to Remember.
CHAPTER 10 Averaging-Down: A Skilled Strategy.
To Average-Down Successfully Takes Mastery.
Know-How Doesn't Grow Overnight.
Rules to Remember.
CHAPTER 11 Gambling versus Day Trading.
Rules to Remember.
PART III Intraday Trading Truths.
CHAPTER 12 Why Some Traders Make More Mistakes.
Pick Your Stocks Carefully.
Focus, Focus, Focus.
Pay Attention to Market-Moving News.
Rules to Remember.
CHAPTER 13 Trading Consistently All Day.
Rules to Remember.
CHAPTER 14 Stock Picking: Simplifying the Process.
Your Stock Should Have an Average Daily Volume of One Million Shares or More.
Choose Stocks between $10 and $100.
Pick Stocks That Display Tradable Intraday Price Swings.
Don't Trade Stocks Affected by Strict Federal Regulations.
Beware of Stocks Directly Affected by Current News Headlines.
Rules to Remember.
CHAPTER 15 Why News Can Be Just Noise.
Trading on News versus Monitoring News.
Rules to Remember.
PART IV The Truth About Training and Preparation.
CHAPTER 16 About Those Training Programs.
Seminars for the Greenhorns.
Training Programs for the More Experienced Trader.
Tips for Selecting the Right Program.
Rules to Remember.
CHAPTER 17 Picking the Right Online Broker: Pay-per-Share versus Pay-per-Trade.
Starting Out with Pay-per-Trade.
Transitioning to Pay-per-Share.
High Leverage Pros and Cons.
Hang on to Your Pay-Per-Trade Account.
Rules to Remember.
CHAPTER 18 Paper-Trading Strategy.
Paper Trading for the Amateur.
A Word About Advanced Paper Trading.
Rules to Remember.
CHAPTER 19 Trading for Skill versus Trading for Income.
Building a Foundation of Trading Skills.
First Level.
Second Level.
Third Level.
Summary.
Rules to Remember.
CHAPTER 20 The Perfect Trading Day.
Early Morning Activities.
Pre-Market Trading.
The Opening Bell.
Midday Activities.
The Last Hour of Trading.
The Closing Bell.
After-Market Trading.
Homework.
CHAPTER 21 The Worst Trading Day.
Early Morning Activities.
Premarket Trading.
The Opening Bell.
Mid-Day Activities.
Last Hour of Trading.
The Closing Bell.
After-Market Trading.
Homework.
Conclusion: Parting Words.
Appendix: Rules to Remember.
About the Author.
Index.
