Josh DiPietro [Josh DiPietro] - Day Trading Stocks the Wall Street Way: A Proprietary Method For Intra-Day and Swing Trading

As you've seen, in this book there are over a hundred rules and procedures. With that said, virtually every trade setup can go horribly wrong if you neglect even one of the rules or don't follow proper procedures. This is not only true for you. This is true for all Wall Street day traders and for traders at all private equity firms all around the world.

In the professional world of day trading, you don't just lose capital when you make a big mistake. You get fired. You take the proverbial walk of shame off the trading floor. In the interest of not losing your money, you need to approach my Fusion Trading system with exactly the same caution and prevention that the pros use to keep their jobs.

I can't tell you how many times I've been contacted by graduates who tell me the horror stories about their bad trades. They all have one thing in common. They all admit that they knowingly made a mistake.

As a trainer my main objective is to coach you to the point where you can back-test your trades at any time and know exactly where you should have entered and exited, or whether you should have entered at all. After learning my system beside me, one-on-one, you should have the ability to make, on your own, the proper decisions in real time while trading.

For instance, if you know that the swing trade you just placed was not actually a swing level (meaning the daily level never held for 10 days), then you should also know you jumped in too soon. You should know you made a mistake, especially if you held this position overnight. As a graduate, did you really need me to tell you to stop-loss? I certainly would have if you were still under my wing.

I'm concluding this book with a quick reference to several of the most important rules and procedures that can be understood here on paper. The rest can only be taught in real time while you're being coached by yours truly.

The following must be hardwired into your trading psychology and memory. Let's begin with what we always begin with: intra-day trading.

I will not list the Golden Rules again, but I will stress that if you break any one of them, your intra-day trades will be drastically off. For instance: the most detrimental mistake a trader can make is to start intra-day trading when more than $3 off their swing level.

I'll use TSLA as an example. TSLA can easily run $10+ in one single trading session. If it does skyrocket that far in one day, chances are it's because it's either hitting or approaching a swing level.

I can show you in words here, no need for a chart. Suppose you trade pre-market high and you enter a short position 50 cents past the resistance level. So far that sounds like my system. But, without this given information, suppose you enter the short position at $200, and the first tier swing price level is at $210. You are now $10 off your swing level. So what should you have done? You should have used the Golden Rule to wait for the price to come within $3 of a swing level.

If you ignore the Golden Rule, you may just get lucky and your trade goes green, and you exit. Okay, but if you continue to break this rule, I can promise that eventually you will get burned. In most cases, the price will run the full $10 against your short position and hit the swing level. In this hellish scenario you will likely be very upset and worried. Meanwhile, I and my disciplined trainees and graduates will all be perfectly content. Why? Because before we started intra-day trading the short position, we all chose to wait for the price to come within $3 of the swing level. We all chose the correct process. We started looking for the newly formed intra-day highs that were above $207 (within $3 of the $210 swing level).

So you see, because you threw one single rule out the window, your trade went terribly wrong, your trade went deep in the red, while the rest of us trading the same system were profiting that very day, or we never entered to begin with and are safe on the sidelines.

Here's a list of factors that contribute to disastrous intra-day trades:

• You didn't wait for intra-day levels to come within $3 of a swing level.
• You failed to find the correct daily levels and know where your first-tier swing level was.
• You traded a first-tier swing level when you thought it was a second-tier swing level.
• You didn't gather the correct previous-day high/low price.
• You didn't gather the correct pre-market high/low price (recall, sometimes pre-market starts at 6 a.m.)
• You weren't aware of the earnings release date of your stock.
• You entered more than one intra-day position within 50 cents of each other.
• You tried to get more than a 15-cent profit when you hadn't mastered the fusion system.
• You didn't have whiteboard price levels ready and organized when the bell rang.
• You didn't stick with 100 shares max per tier/intra-day price level until you mastered the system.
• You held an intra-day position overnight.

Now we'll move on to swing trading.

First, you must always remember that all swing levels are daily levels, but not all daily levels are swing levels. The 10-day hold rule is the key to knowing your swing levels.

Here's a list of factors that contribute to disastrous swing trades:

• You're not watching, or you lack the skills to properly watch, the daily chart every morning and nightyou're not back-testing.
• You're not realizing that your swing level hit in pre-market trading session.
• You enter a swing trade within five trading sessions of an earnings release.
• You're trying to get more than $1.50$2.00 on each swing tier.
• You are exiting your swing positions too soon and not recognizing your full $1$2 profits.
• You're not realizing the speed and volatility of the new stock you add.
• You're not sticking with 100 shares max per tier/swing price level until you master the system.
• You hold a swing position overnight and into an earnings release.