7 things I learned from making $15 Million as a Day Trader....

I've been trading for over 10 years and in that time period I made a little over 15 million dollars from day trading and in this video I want to break down all the lessons and things I've learned throughout my journey the first thing that I've learned is you don't have to trade every day when I first started out trading I woke up every single day looking to take trades in the market and over the few years I've learned that you have to focus on finding opportunities in the market and the market is a place that does not give you an opportunity every single day so that took some time for me to really develop and once I was able to develop and understand that I was able to approach each and every single trading day according to what the market presented now the market will present different opportunities based on your game plan based on your Viewpoint of the market and based on how you trade so you have to identify the way you trade what your strategies are and then with that strategy or strategies you need to approach the market with the ideology G that hey the market may or may not present me an opportunity today and if it doesn't it's okay to stay cash my problem was initially I was like hey I'm spending four hours in front of my computer five hours in front of my computer I have to put on a trade I have to buy something I have to sell something and that would lead you know me to having terrible trades or me losing money and having trades that I had no business in taking the next thing I learned is you must adapt to the market so over the past 10 years I've realized how the market has changed year over year and how the market has Seasons right so the way the market is moving now the way your trades are going now may not happen in the next upcoming months so a quick little story there's times where I've been trading and I would have great weeks great days and great months now most of the times as Traders when we have big months big weeks and so on we think that momentum will continue those opportunities will continue to present themselves but what happens in certain situations or the market in general is that the Market shifts its direction or it pauses in the direction it's going in your job as a Trader is to understand that recognize that and make the proper transition so if you are trading in let's just say a crazy Market that is rallying that is trending and having a strong uptrend right some strategies may be working in that market some plays may be working in that market and the way you approach the market during that period may be beneficial but now when the market transitions you as a Trader you have to adapt and realize that if not what I've seen happens is Traders start blowing a lot of money having big drawdowns because they're not able to recognize this big transition in the market and that just causes them to keep hammering down on the same strategy or same Focus that they have on the market so next time you're you know trading for a long period of time and you notice that a strategy is not working take a step back and say well did the market conditions change the strategy that I was using isn't not working at this current moment why is it not working and try to understand the market from a macro point of view and realize that change will happen and when when it does happen your job is to once again recognize and make that adjustment next make sure you have realistic goals and you set yourself up for Success one thing that I noticed a lot of Traders do wrong including myself is we start setting money goals and we set unrealistic goals for ourselves in the market this creates so much pressure in our trading that causes us to take terrible trades that causes us to take fomo trades and that never leads to a good thing so in my early days one thing I did a lot once again was I would say I need to make a hundred thousand of my first year I need to make two hundred thousand dollars on my first year I need to make this much my account by this date has to be at this value and once again all that did for me was it created false expectations and it created so much pressure and training is a place where we don't need to create outside pressure because that outside pressure just does not help so the goals that I recommend you guys to have or the goals that I would do if I was to go back is I would set goals that are not money related I would say well the first year my my goal is to make sure I can improve my win percentage my first year goal or my goals are to make sure I can improve my risk to reward ratio I can focus on my R multiple I can focus on things that I can control and some things to break it down on what I think you should focus on uh or you know once again focusing on your risk focusing on your game plans focusing on identifying opportunities right making those things small little goals and saying my goal for the month is to make sure that I don't have a drawdown more than 10 percent or my goal for this month is to make sure my winning percentage stays at 60 or my goal for this month is to make sure that my R multiple is above a certain number right if you're able to kind of build those goals and going deeper into goals could be hey my goal is to not take more than five trades a day or four trades a day or my goal is to not lose more than 500 a day those goals are things that we as Traders can manage and if we manage those X expectations well we allow ourselves to have the highest possibility of success but if we make our goals where this month I want to make ten thousand dollars or twenty thousand dollars all you're doing is you're creating false expectations and you're creating such high pressure for yourself and most of the time that just does not work out the only thing that really matters in the market is risk the risk that you put out right so every trade that we take as Traders one thing we can control is how much we are willing to risk if we are wrong so before you take on any trade one thing that should be done is hey if this trade invalidates my idea and validates my thesis that says that I am wrong what is the price point that I should take my exit on that will say I'm wrong and what should that look like in a dollar value now everyone will be in a different position for some people it could be 300 for some people it could be three thousand dollars depending on your account size depending on the stage you're at you need to understand that once again risk is very crucial in this journey and that is one thing that you should control and you can control so before you approach any single trade guys make sure you have a defined area of risk meaning hey if I am wrong I will lose 300 right and you need to accept that loss before you take the trade one thing I did wrong in my early days is a lot of times I would say well I'm gonna buy this stock or I'm gonna take this trade if this trade goes in my favor I'm gonna make two thousand dollars completely invalidating the risk component right because it's like you take a trade and you're like I'm not going to be wrong right so you just go in and you enter the trade you put on size without even factoring the risk because hey I'm taking this trade I know going to be right and when those trades go against you and they will if that risk is not managed well you will have a really really really difficult time uh taking drawdowns or accepting drawdowns or just having a healthy p l curve in your trading so make sure you factor in Risk make sure you accept risk and make sure you manage risk the next thing I learned is that one of the main key things that every Trader should be doing is they should be tracking and analyzing their trades meaning every single Trader should Journal their trades now when I started trading my first two years I never journaled I never measured I never did anything I would wake up I would put on a trade I would not know anything about what I traded what my R multiple is what my win percentage is what my average winter loss ratio is I had no idea I was just waking up putting on trades hoping to be red or green and I was calling it a day that's what I did my first year to year two now during you know year two is when I really started taking trading seriously or I I told myself I am right and one of my key important factors that helped me elevate my game was to track my performance so I started tracking my data I started looking at you know my winning percentage I started looking at my average winter loss ratio how much do I make per trade and how much do I lose per trade what is the size that I trade well with what is the size of trade you know bad with I started looking at my playbooks my strategies what strategies are effective what strategies are not effective so when I started measuring and tracking these things what it allowed me to do it allowed me to see where am I excelling in in my trading journey and where am I behind it so I was able to cut off like the heavy baggage in my trading I was able to put in more focus on the areas that I was good in the areas that I did need to put more sizing the strategies that were working when they were working and I was able to leverage that the right way now the only way I was able to do that was by tracking and journaling my trades right if you guys want to track go check out tradezilla if you you guys want to look for online automated Journal if not you guys can also use like a journal or whatever a notepad just to do it if you if you want to go that route but I would highly recommend to journal I would highly recommend to analyze your pre-market game plans your aftermarket game plans how you view the market what you actually did because those things are very very important to allowing yourself to have the highest possibility of success the next thing I learned is if you really want to have good strategies you need to have an outlined example of your strategies which could also be known as setups or playbooks so having a playbook in the market is very very crucial so over the years I've developed multiple playbooks now my playbooks would look something like me having an entry criteria me having an exit criteria me having a market condition so if I have a playbook for let's say an opening range breakout now my question for that Playbook would be when does this strategy or when does this Playbook become in effect now I've noticed is some of my playbooks become in effect when the market is reacting in a certain way so to break down my opening range breakout strategy right my entry criteria for or market conditions would be the market would have to maybe Gap up now if the market has gapped up for me yesterday's low or yesterday's closing session most of the time I'm now in a trading criteria Zone then my second entry criteria would be seeing volume above average US breaking above my huge supply zone or my huge level that I have established with extreme amount of strength or buying pressure if I can identify those things and put it together now I have a certain setup certain Playbook that is effective for me to trade so if you do have strategies my first question to you guys right now if you're like hey I have a strategy I would say I would ask you what is your strategy right what's it called uh what's your entry criteria like what what causes you to take this trade or identify this trade what is you the market conditions that this criteria needs to be under if it needs to be under any and where would you exit like what is your exit criteria because having an exit in the market or having to exit in any trade is always crucial because you can't enter a trade right and not know where you're going to exit right going back to like the risk component you need to always make sure that hey I have an area where if I'm wrong I'm going to exit so that's why having the exit criteria in your game plan having it in your playbook just allows you to be very fluid in your trading and just kind of have like a visualized game plan right hey this is what the strategies are this is what my playbook is this is what I'm going to take to trade to see when I'm going to exit and that just allows you to have something on you know hard paper and that's what you want to do and like I said I wish I did these things early on if not you know I would have done better way early on but obviously it took me some time I went through trials and and issues and failures and so on in my first two three years to kind of really narrow these uh aspects of trading down right the last thing I learned which I think is extremely important and I'm pretty sure you guys have also ran into these problems is that trading is about 90 percent emotional right there's so much psychology involved in trading uh I can't stress this enough and one thing I hear people talk about all the time is I want to eliminate my emotions and my thing is you can't eliminate your emotions like we as humans we cannot eliminate emotions we can't destroy our emotions but what we can do is we can manage our emotions get better at understanding ourselves get better better at understanding how we respond to certain things in the market so this ties back a little bit with journaling right so my question to you guys and I want you to process this for a quick second right is how do you respond when you're in a trade that hits your stop loss do you exit at that point or do you panic and get scared and get nervous or whatever the case is or do you actually follow it how do you feel internally right how do you feel when a trade actually it goes in your favor do you get excited do you get happy do you start looking at that trade and you do start saying well now I need to take this trade I need to take the profit I need to see green like how do you respond during these moments how do you respond when you have three back-to-back losing trades or winning trades you get so excited where now your next trade start getting impacted right that's where I learned that there's so many different ways that we all respond to emotions and you know for the first two years of my trading and so on I try to like I tried every way to be robotic hey how do I become robotic how do I remove emotions and it's like over over the few years I was like wait you can like I can't remove emotions it's impossible so how do I manage them how do I deal with them and for me to manage them it was like once again understanding them going into journaling learning about how I react learning about how I respond and then I started creating something in my head and this is one one saying that's helped me out a lot with every single trade it's like one of my favorite things as a Trader is always think about your next 100 trades you can have a big trading day tomorrow a big trading a bad trading day tomorrow whatever trading day or trade it is think about your next 100 trades right so imagine tomorrow you have a big loss or you have a big win don't get too excited or too sad about it because if you think about the long-term trades and you think about the next hundred trades you start realizing how small that one little win is or losses but if you keep those losses manageable you keep those losses manageable uh those gains like manageable as well like you know you don't go crazy with risk and so on over those hundred years you start seeing real success in every trade you do take doesn't really impact your psychology it doesn't impact your emotions if I go on tomorrow and I take a trade and I lose money cool I lost money now why because I'm gonna think about my next 100 trades and that kind of puts my mind at ease and it allows me to not allow that trade to impact my next day or my next trade same thing when I have a big winning trade I'm like all right I had a big winning trade I can lose it all in the next 99 trades so I can't get ahead of myself and I need to narrow that down so those are some of the things that I've learned in my 10 years and plus of experience uh like I said I had a lot and a lot of highs and lows in my trading career I know a lot of people are saying well this guy you know it has made 15 million dollars in this period and guys most of the money I made came in like my last five years right the first five years equated to maybe 10 or 20 percent of my whole trading profits and you know out of those 10 years one year I had a seven and a half million dollar year so just one year made up over 50 of my trading profits right so that's just to show you that this is a long-term game and you know if you guys don't find momentum or don't find success year one year two year three and you stay alive and you keep consistent at it and you kind of work on the skill sets the right way like I don't mean you just wake up and put on trades and go crazy I mean you actually take trading serious your success your knowledge your you know wisdom in trading everything will start compounding and year after year you will see success so with that being said thank you so much for watching if you guys enjoyed this video please give it a thumbs up and uh you know subscribe and I'll see you guys next time thank you

Channel: Umar Ashraf

Views: 616,144

Keywords: Day trading, day trader, umar, umar ashraf, tradezella, trader

Id: elO6nmqj2Ng

Length: 16min 16sec (976 seconds)

Published: Mon May 01 2023