Andrew Aziz [Aziz - How to Day Trade for a Living: Tools, Tactics, Money Management, Discipline and Trading Psychology

In this book, I explain the fundamentals of day trading and how day trading is different from other styles of trading and investing. In the process, I also describe important trading strategies that many traders use each day. This book is deliberately short so readers will actually finish reading it and not get bored halfway through and put it to one side. We are all distracted by Internet diversions, emails, Facebook or Instagram notifications, or the dozens of other apps that we have on our smartphones or tablets. Therefore, this book is concise and it is practical.

If you are a beginner trader, this book will equip you with an understanding of where to start, how to start, what to expect from day trading, and how you can develop your own strategy. Simply reading this book will not make you a profitable trader. Profits in trading do not come from reading one or two books, but, as I will explain later, profits can come with practice, the right tools and software, and proper ongoing education.

I have included at the back of this latest edition of my book a handy and helpful glossary of the most common terms you will come across in day trading. If, as you are reading this book, you come across a term or phrase that you dont recall the meaning of, please go and have a look at its definition in the glossary. Ive used easy to understand language to explain the lingo of day traders.

Intermediate traders may benefit from this books overview of some of the classic strategies that the majority of retail traders use effectively. If you dont consider yourself a novice trader, then you may wish to jump ahead and start reading at Chapter 7 for an overview of the most important day trading strategies. However, I encourage you to skim through the earlier chapters as well. Becoming a consistently profitable trader will not require you to master complicated new trading strategies every day. The strategies in Chapter 7 are the ones that traders have used for over a decade. They have worked so far and need to be mastered. Work on simple well-known strategies, but adjust them over time to complement your own personality and whatever the current market conditions are. Success in trading is not a revolution, it is an evolution.

In my opinion, the most important lesson that you can learn from reading this book is that you will not get rich quickly by day trading. Day trading is not similar to gambling or playing the lottery. This is the most important misconception that people have about day trading and I hope you will come to the same conclusion after reading this book. Day trading looks deceptively easy. Brokers do not normally release customer statistics to the public but, in Massachusetts, a state court did order the release of the records of financial brokers. Those records indicated that after six months of trading, only 16% of day traders actually made money. It is very easy to be one of those 84% of traders who are losing money.

This brings you to my first rule of day trading:

Rule 1: Day trading is not a strategy to get rich quickly.

A very common misconception that people have about day trading is that it is easy: buy low, sell high or buy the dip, sell the rally. Again, day trading looks deceptively easy, but it is not.

If it were that simple, everyone would be a successful trader. You must always remember that day trading is difficult and will not make you rich quickly. If you have this misconception, and if you want to get rich quickly and easily in the stock market, you should stop reading this book right now and spend the savings that you put aside for day trading on a nice family vacation. It would be much more satisfying to spend your money that way, rather than losing it in the stock market.

Having mentioned all of these points, day trading can be a profitable profession. But keep in mind that its a highly demanding professional career and most definitely not a casual activity for beginners. It takes time to become a consistently profitable trader. Many traders will fail in the long and at times fatal day trading learning curve.

Chapter 9 focuses on the real actionable steps you must take to successfully enter the world of day trading, but again beware that day trading demands a brutal learning curve. There are many things that you can do to speed up your learning curve. But you unfortunately cannot make the learning curve disappear. Trading in a simulator account is expediting your learning curve exponentially. One day of trading in a simulator can be worth weeks of training in real accounts or offline.

Often I am asked how long it takes to start making money as a trader. You may have heard it can take a year. Some professional traders may say it is not possible to make money for two years. I have found that most of the better fellow traders in our community consistently make money before the end of their sixth month. But for others it can take a year. On average, it usually takes from six to eight months. It always amuses me to see books and online educational courses that advertise teaching a simple strategy to make you money from day one or after a week or even after just one month. I am always intrigued to meet people who actually believe that advertising and are willing to pay for those products. Fast buying and selling orders in front of a moving screen demands the highest levels of concentration and discipline. Paradoxically, it attracts the most impulsive and gambling prone people.

In day trading, you will be competing with the sharpest minds in the world. The market is a massive crowd of traders. The main objective of day trading is to take money from other traders while they are trying to take yours. Thats why its such an intellectually intense business. You do not generate money in the stock market. The only reason there is money in the market is that other traders have put it there. The money you desire to win belongs to other traders and they have no intention of giving it to you. That is why trading is such a hard business.