6 MUST Know Trading Rules for Day Trading Beginners

there are six i mean six must know rules for day trading beginners to follow in order to avoid blowing up day trading especially in the current market conditions right now could be like the wild wild west where you can see three thousand percent gainers take off like a rocket and then a heavy sell-off on the stock to no bounds city as traders we must know how to protect ourselves and most importantly our trading accounts in these volatile market conditions after trading for seven years now i have some very simple yet extremely effective rules for day trading they'll help your journey to become and stay consistently profitable the six rules i'm about to share with you can definitely help new traders form a very solid foundation in their trading discipline such as not chasing hive the day breakout not adding to a loser and most importantly not forgetting to hit the like button at the bottom of the video as you start stay trading for a while you realize that knowing these patterns or news of a stock is just half of a story it's important to have a trade thesis yes but you cannot just hit by and go straight to chilling on the beach no trading is much more than that the most important rule in my daily trading routine is rule number one always have a trading plan specifically it needs to be a plan that includes an entry exit price and also the risk level for every single trade for example let's say i see a stock for a potential long i can only buy the stock when i see it consolidate around certain support levels with volume and it has to have found a bottom support as a level for me to risk off yes i understand that you might be thinking i'm limiting my trading profits by not trying to pick the very bottom of the stock or the very top if i'm trying to short but honestly for most day trading beginners waiting for confirmation and planning these entries with clear risk is going to make sure you profit from the meat of the move and limit the risks at the same time and a very crucial part of the trading plan is a potential risk reward of at least three to one that's of course three reward to one risk if the risk is more than that or if the stock is just consolidating sideways and can't give me a good reward of more than three then i'm perfectly fine leaving the stock alone just not trading it right sometimes the best trades are no trades and on a side note to planning your trade i really recommend new traders to stay away from small cap penny stocks and just to take them off your trading plans really in my opinion mid cap and large cap stocks are much more friendlier for new traders and their support and resistance levels are easier to plan out generally small cap penny stocks are companies that trade for less than five dollars a share such as opt which is currently trading around a dollar a share and solo right now around two dollars and forty cents these kind of stocks are basically just trash and they're very illiquid generally speaking your chances of actually picking the one out of thousands of penny stocks that actually becomes the crazy 100 or 1 000 ripper is next to nothing and when these stocks do trade with above average volume their price action can seem pretty random and it's very hard to gain consistency if newer traders start out trading just these small cap penny stocks yes while you do need to follow a trading plan on whichever market cap stocks you choose to trade don't permanently become fixated on old ways of trading as traders is actually very important to stay flexible and adapt to the current market conditions so depending on the research you've done on the stock the current news or the market condition you could increase both the size and the trade period on the stock especially if the headline could fundamentally influence the company's share value is there a company take over imminent a conference call coming up or a potential dilution any of these fundamentally negative or positive news are worth potentially sizing in even more in your trade positions and then perhaps try to let the winners write out a lot longer which brings us to rule number two in trading analyze stock news like your life depends on it because your trading account depends on it definitely i make sure to analyze and study the news before i buy or short any stocks especially if the stock has made a significant drop most people are trained to buy any dip because that's the practice that would be used in investing not day trading though it could be very tempting to buy any stock when you see a drop huge in prices without realizing about the circumstances behind the crash by the dip right it has to bounce well that strategy works very well until the dips just keep on dipping and this is a very common new trader mistake especially on the small cap penny stocks buying the dips and averaging down to a loser depending on the severity of the news the stock may either bounce or just keep on crashing especially if the news is potential fraud or lawsuit picking bottoms on these stocks such as offer clip could be a very very bad idea i've done this before many years ago and i spent days and weeks paying for it in terms of regret sleepless nights and broken dishes since then i make sure to check the news and find the catalyst for any single stock i'm looking to buy or sell that's very important trust me this extra 5 to 10 seconds of work of a quick search on benzingo news is a game changer now we have rule number three step away from my trading computer this one here when i sense myself starting to feel emotional emotions and day trading are like small account and chat room alert they simply cannot work together but if you get into a routine of planning your trades and trading your plan like rule number one this will eventually allow yourself to be more detached from the money and keep your emotions in check when you're trading you see it's not difficult to make money in day trading but it's very hard to keep it one thing that helped me greatly with controlling emotions and hype when i was new to trading was to avoid trading the market open and i think this is a tip that might help you out and the reason is that the first 10 minutes or 15 minutes after the non-opening bell is usually extremely volatile stop losses are getting hit market orders from hundreds of thousands of robin hooders are getting filled lambos are raining down from the skies it's a hot mess out of the gate if you are relatively new to trading i strongly recommend to avoid trading the market open by doing so this will give a new trader more time to analyze the stocks the news and the price action and playing out the trades basically following rule number one and two instead of panicking at the open and just fumbling your keyboard and blindly jumping into stocks most importantly this will help with controlling emotions in trading for many new traders the hardest part is not becoming emotionally attached to a trait and having one small loss leading to a string of bigger losses next we have rule number four be realistic about your trading profits take the meat of the move and do not outstay besides analyzing a stock before jumping into a trade you have to be realistic with a stock's upside potential intraday while you're day trading you can't just buy a stock and hold on to it and expect a 100 run each time i mean sure you see some small cap low float stocks going up one thousand three thousand percent in one day but how often does that happen right whether i'm buying the small caps or the large caps i don't expect the stocks to run to the moon every single time so you shouldn't either okay unless it's tesla stock it can just take off out of nowhere like nobody's business the point i'm trying to make is you shouldn't regret making small wins on a stock or mo on missing out and selling too early you can always buy the stock back when it dips and if the momentum an uptrend continues and it's the same thing when you're swinging or investing long term stocks like apple microsoft amazon and especially tesla dips every single time once a while so there's no need to panic that you're missing out on something huge for new traders especially if you have a small account do not aim for home runs focus on controlling your risk and look for base hits sure the profits are probably small but taking these small wins are less stressful and they will add up to your account slowly and the growth is exponential whining about missing profits and jumping back into trades due to fomo and the idea that oh i could have made so much more this stock owes me money now this could actually be a very negative and dangerous emotion because eventually that will lead to new traders revisiting trades and you start revenge trading and giving back profits i know because i'm guilty of that too when you are realistic about a trade it helps you ignore those dollar signs and becoming too attached to the money let me ask you something why do most people get into trading in the first place it's mostly for the money right but ironically if you focus on just the money you will fail in day trading if you're relatively new to the business starts trading with just one or two stocks per day take the meat of the move and be done don't follow every single scanner alert and go for more stocks due to fomo trading rule number five and it's an extremely important one actually always and i mean always smash the like button and meant to always prioritize risk management you see most traders fail not because they don't have winning strategies or they're using the wrong brokers or they don't have short locates it's because they focus too much on the shiny dollar signs the money like we talked about earlier so much so that they ignore their risk and failed to see the potential downside if they were wrong without proper risk management it's going to be very difficult to grow your account without stops and without setting max losses for the day the trader is likely to first try to make back small losses then over trade and start making more mistakes and eventually this is how many new traders blow up day trading is risky and that's why you shouldn't be trading with the money you cannot afford to lose if you use a margin account too short or have the cash settled within the same day that's great but for newer traders please do not use margin buying power that you cannot afford to lose i have a video on how much money do you need to start day trading if you're interested so make sure your trading funds are separate from the money for your emergency funds and you have separate savings and investing accounts as well managing risk is important but at the same time you need to accept the fact that taking risks is necessary in day trading like i said day trading is a risky business so you will need to take calculated and planned risks and at the same time manage them so you won't go overboard it's kind of funny because while we day traders are taking advantage of profiting from short-term momentum we must have a very long-term outlook in this trading business and from all the rules i mentioned tell me which ones do you find new and helpful and at the same time share some of your trading rules with me in the comment section below if you enjoyed the video please remember to drop a like and subscribe thank you guys so much for watching as always i'm the humble trader and i'll see you guys next week hey guys thanks for watching i hope you enjoyed the video and the bad jokes if you want to see more day trading content make sure to subscribe and follow me on twitter and instagram for more if you'd like to trade with me daily and get my free weekend watch list and trading journal make sure to check out the links below for more resources stay green stay positive and i'll see you guys next time

Channel: Humbled Trader

Views: 303,881

Rating: 4.973115 out of 5

Keywords: ricky gutierrez, warrior trading, beginner day trading strategies, day trading for beginners 2021, how to grow small account day trading 2021, stocks to buy in a recession, how to start day trading in 2021, how to learn day trading as a beginner 2021, best trading broker for beginners, how much money do you need to day trade, how much money to day trade, TOP day trading tips, must know day trading rules, how much money do you need to start day trading

Id: qL7Z7XQ6tPA

Length: 14min 3sec (843 seconds)

Published: Mon Dec 14 2020

Reddit Comments

[u/dariusd2003]

This is an excellent video. A friend of mine just blew up his account and lost -15k revenge trading with SPX options. You live and you learn.

[u/dujarianiket]

good suggestions...thanks!

[u/omarhaiani]

I use to watch her videos they are very good !! a place for beginners