Day Trading for Beginners 2021 (The ULTIMATE In-Depth Guide)

what's going on youtube craig here with the nevatrade and today i'm going to be exploring with you the world of day trading so even if you have no prior experience whatsoever i'm going to be discussing the most important day trading concepts so by the time you end this video and you get through the entire thing you're going to be able to know exactly what to do moving forward with your day trading career so grab a notebook get comfortable and let's get into the training okay so the first thing that i want to cover with you is what day trading actually is when you're buying and selling a stock you do so in order to turn a profit so there's investing which is long-term buying and selling and then there's day trading which is when you're doing that buying and selling within the same day period when you're day trading essentially you're buying a stock hoping that it appreciates and then selling it within the same day to turn a profit for that day okay so the objective of day trading is obviously to make money we know that but you're using a strategy in order to predict when and how these stocks are going to appreciate so that you can kind of quantify that into a system that's repeatable and manageable so you can turn a profit day after day okay so i'm going to kind of explain to you what individual stocks are and when you buy them and they appreciate how you make money okay so when you have a share of a company that means that the company is allowing individual people to basically buy a small portion of the investable part of the company so you can actually own small parts of the company right so if a company performs well those shares will increase in price so the amount you hold will increase in price and that will turn into your wealth as well so if we have one share of stock let's say that it costs ten dollars so now let's say you buy 100 shares of that stock right so now you have a thousand dollars worth of your money invested into that company so let's say that one share now appreciates and goes to 15 right so now you have per share 15 stock right so now that's 1500 worth of that stock so when you sell it back to the broker you basically are saying okay i bought this for a thousand dollars now it's worth fifteen hundred dollars so i'm going to give the shares back to you but i get to keep the profit that has been made on that trade because you've you've exposed yourself to the market into a certain amount of risk investing in that company when you buy a stock and it appreciates you make profit when you sell it same thing in the opposite direction right so now you're going to be losing 200 if the share price drops to 8. so appreciating each share appreciates you make money and then each share decreases in value you lose money okay so obviously the point of day trading is to figure out based on news and based on patterns if companies are going to appreciate or depreciate for that day so that you can usually place a larger position or a larger bet on that trade so that for that day you can turn a significant profit okay so that's the goal of day trading is to basically predict those appreciation and depreciations and put money behind it so that you can turn a profit for the day okay so now that we know what the objective is when we're day trading we need to go over how to read a stock chart okay and the first element of understanding that is going to be understanding what are called candlesticks okay so candlesticks are a visual representation of the open close and high and low of the stock movement for that set period of time so basically if you have a five minute st candle on a stock chart that's five minutes worth of up and down movement being quantified and represented in a candle that you can look at to identify that information okay so if we look right here here are two candles one is green and one is red green is signifying that over that period of time the price has made a positive gain or a gain and the red candles indicate that over that set period of time the price has gone down okay so if the candle is red that means that the price closed lower than what it opened at like we just said the wick what's called a wick right here is going to be the highest the price has gone for that set period of time okay this period right here is going to be where the price opened because since it's red this means that it must have opened here and closed here because it's a red candle okay so this bottom part right here is going to be the closing price that's signifying that basically the price has dropped over time in that set period of time like we stated and then the lowest price right here the the lowest point on this candle right here is showing us the lowest that the stock has gone for this duration of time okay so with the green candle same thing this top part is going to be the highest the stock has gone this is going to be the close price because it has made a gain over time because it's green this is going to be the closing price right here this is going to be where the price opened at and this is going to be the lowest point on the candlestick okay so now that we understand how to read candlesticks i'm going to show you candlesticks on an actual stock chart okay so if we look right here this is a visual representation of the price movement that sdgr has made okay so clearly this stock has gone up during the day in between these two gray columns right here is signifying a trading day right so it opens at 9 30 a.m and closes at 4 00 p.m this is a five minute chart which is indicating that each candle right here is showing us five minutes worth of price data okay so we can look at each candle and know that that's what the stock has done for that five minute increment and when you start to see them pairing together you can start identifying trends and and you can look at how they move and use that as ways to project what the future movement is going to do so that you can try to make money on that all right so let's take a look at an example of a trade where i logged a stock or bought a stock and made a profit on this trade so i identified that this stock was moving up and i looked into my system and i figured out that this stock is going to turn around at this level in theory right so i bought 300 shares at 54.65 right here so this candle i purchased 300 individual shares at a price of 54.65 then i set what's called a stop loss this is going to prevent me from losing more money than i want to right so i put a stop loss right at 54 dollars per share so theoretically if this stock was to come down and push through this price and continue moving against the direction that i think the stock is going to go in my losses would be completely contained to a certain dollar amount which is 200 per trade for me so when taking this trade i accepted that i was going to risk 200 on this trade in turn for it to turn around and the probability to be in my favor so that i make more money than i'm risking on the trade okay so i bought 300 shares at 54.65 and then actually the stock came down continued to push down and then turned up a little bit came up through here and then chugged up and i ended up getting out right before the market closed okay this was for a 417 dollar profit okay so i was risking 200 in this trade and i ended up making 417 dollars in the matter about five to six hours okay and that's the power of day trading basically if you can get good enough at this and you can figure out an exact system as to where to buy and sell stocks you can actually turn a pretty significant profit by understanding those concepts the next concept that i want to cover is a question that we get a lot and sometimes people have an issue understanding whether or not you can make money before you sell the stock and the answer is is that you're not actually making that money meaning that it's not locked into your account until you sell those shares okay so this floating profit which is profit that has been the stock is appreciated and the position is worth more than what you bought it for money is not in your account because you have not closed that position so if the stock moves down past where you bought it it will actually be negative value okay so if you're up in a trade and you're up let's say 300 on a trade but you're still in the trade nothing stopping that stock from coming down and basically making you lose money until you lock that in and sell the shares okay so in order to actually profit off of a stock you need to do both ends of the transaction you need to buy it and then you need to also sell it and as soon as you sell it those profits are going to be locked into your account okay so i know i talked about losing a stock trading position i kind of want to go into depth a little bit more regarding losing because it's very possible that you're going to lose a lot of your day trades a lot of people think that you need to be right all the time to make money and when you're wrong and you lose money that it's bad but actually you need to be able to retrain your brain and i talk about this a ton in my program but you need to be able to rewire your brain so that you can look at losses and understand that losses are a part of the game the only way you're going to be able to open yourself up for the opportunity to make money is to also open yourself up to do contained small losses okay so small contained losses that are a part of your trading plan are actually beneficial to your trades because it's allowing you more opportunity cost to basically be able to make profits on trades okay so let's say we'll take the same exact example right here where we bought the stock at 54.65 and we put a stop loss at 54. right so our stop loss line is an order that automatically goes to the broker that says if this stock moves down below this price i want out right so that this stock can't go all the way down here and you'll lose a massive amount of money that's what a lot of beginner traders will do is they'll just hold the shares hold the shares assuming that it's eventually going to come back up and then before you know it the stock price will drop like all the way down to like here and you're gonna lose like six seven times the amount of money you were going to make before you're going to sell the stock so you can lose a ton more money than you anticipated even making on the trade just by not having that discipline and not going into the trade with a predisposed plan let's assume that the stock price came down here and moved down through this red line we would then be telling the broker as soon as this hits right here i want to get out of the trade right and because we positioned our size into this trade so we bought with 300 shares right here because we bought with 300 shares here and we used a tool and excel tool that i also will put in the bio if you want to have a position size calculator but basically what you do is you find the difference between your entry and your stop loss and you figure out how many shares you need to enter with in order for this difference to only be a certain number amount that you want to risk on the trade so if i want to risk 200 on this trade and i enter with 300 shares here and it goes down by 65 cents we can pull up a calculator right here we're losing 195 dollars on the trade if it goes against us right so give or take we're five dollars away from our maximum loss that we are comfortable with that way if we are wrong which by the way traders are wrong about 50 of the time always regardless of how good or profitable you are if we lose this trade we're only losing 200 right but if we win this trade we're making 400 500 even 600 on some of these trades so eventually you know if you have a system where you're right basically half the time but when you are right you're making substantially more on the ones that you are right about you're basically going to be able to put yourself in a position where you can make money over time even if you're wrong basically all the time so you want to be accepting of losses and you want to understand that losses are a part of opportunity cost that are going to allow you to get into certain positions and get into certain opportunities that are going to allow you to make money okay so now i want to get into something called technical analysis technical analysis is when we look at a stock chart and we're able to draw things on it and identify certain technical elements by looking at the chart to figure out and predict where price movement's going to go and to understand why things are doing what so i'm going to take you through some very basic tools so you can understand how to start doing technical analysis for your own trades so the first thing i want to talk about are trend lines so trend lines are basically lines that are showing you where supply and demand imbalances are without even knowing really i can look right at this point and see that there's little points right here where the stock seems to be like bouncing off like basically an invisible looking wall right so we have a point here and we have a point here so we can draw a line along those bottoms and that is going to show us an uptrend right so this is going to show us the low of an uptrend so basically you can start identifying lines where the stock price will most likely not come down through unless it's going to do a pretty significant change in direction so i'll show you some more examples of these trends so if we look at the dow right here we can see kind of an invisible line going along these points right so if we i we can basically just look and say okay that's an invisible point right there this is an invisible point where it seems to be bouncing off of and then so is this one so if we were to draw a trend line along these parts where the invisible line is we can start to identify where stocks will bounce off of so like for example let's say we drew we just drew trendline on these points right here so we just went on this one and this one so we draw it across and right here as soon as the stock price in the future would come down here and move to this point we can understand that right at this level is a high chance that the stock is going to turn around in reverse direction okay so we can also see an invisible line going from here and here so we can see draw a line from there so now we have this point this point this point and this point so as soon as this price broke down through this trend you can see it really went down a ton okay so here are some areas where there's a supply and demand channel basically showing you where the price doesn't want to break above and where the price does not want to break below okay so and then as soon as it breaks below it right here this sold off a ton so it went down by a ton right so basically the idea of doing technical analysis would be that we could basically tip ourselves off so that we knew if we wanted to get into a position right here and bet that the stock was going to go down we could do what's called shorting a stock so when you short a stock you're betting on the stock going down so we could have a very good prediction that the stock would turn around right here and not break through this invisible wall we have right here and then we could ride this all the way down to hopefully somewhere around here and only be risking up to here because if it breaks through this invisible wall we know we're wrong we get out of the trade right so if it comes down here and we're able to exit the position down here that means that we were able to risk this much and make this much profit so that's kind of an idea of how you can use trends to be able to figure out when it's good when it's a good time to get in and out of trades so what i would recommend for you to do at home is to just go on to your charting software whatever charting software that you're using um i use tc2000 but you can use free options for like think or swim from td ameritrade or you can use trading view as well those are both two free options and what you can do is you can go onto your charts and pull up a random stock so just basically pull up like whatever stock you want and just start trying to draw these invisible lines along the uh what's called price action so where the candles move so like without even seeing without even really knowing i can tell at this point this point and this point are all hitting roughly the same line so i can draw a line along these i can draw a line right here and lo and behold you have points here here and here these are all downtrend points right but these are all points where the stock is most likely going to bounce off and change direction okay so basically while you're at home you start drawing these trend lines and start trying to look at how you could possibly use that as places where you could identify points where the stock is most likely going to turn around or change direction all right in this segment i'm going to be going over the indicators that i use for day trading okay so i like to keep it very simple and if you talk to a lot of professional traders the more simple that you can make your trading setup in your system the better okay the more stuff that you add the more moving averages and oscillators and everything the more you're just going to get confused okay so the only things that i keep on my day trading chart is v app which i'll go over bollinger bands which i will also go over and then what's called macd macd i'll also go over and then volume volume is is an indicator that just helps you look at market participation so i'm just going to go over all of these right now and just show you exactly what i use if you want to research more about indicators that you can use just research simple moving averages exponential moving averages front weighted moving averages um and then that's basically the extent of all of the trading indicators that most people use and that are actually helpful okay there's there's thousands of indicators if you want to read about those independently go for it but i would say as a beginner what you really want to use for day trading is v app bollinger bands macd and volume okay so keep it nice and simple all right so let's go over v-wap first so v-app stands for volume weighted average price and what this is showing us is this is showing us the average place where most of the buying and selling is going on so if we have an area that's plotted that is showing us where most of the buying and selling is going on that's most likely going to signify the fact that people that that's going to be the area that's most pivotal okay so this is often times the area where the stock price will bounce off of and continue going in the same direction so if the stock is on the stock drops down below v web we can see right here that basically we have a little poke through but for the most part the stock isn't really breaking through this blue line right because we have a lot of the buying and selling happening here and clearly because we have more selling in order to push the stock down below this price it's going to take more for it to break above where most of the trading is going on which is going to signify to us that the stock is most likely going to continue moving down for the day so consider v web kind of like a little barrier where if the stock breaks down through it and continues traveling in one direction it's going to take a lot of change in momentum for this stock to break through and start going the other way so this is like an area where it's like a gutter guard in bowling basically think of it like that so it kind of will keep you on the right side of the trend okay the second indicator i want to go over is called bollinger bands bollinger bands is a tool that is created to figure out areas where the volatility is the highest so it kind of shows you the range of probability of where the volatility is going to happen so when the stock moves very quickly and by a lot that's called volatility and you can see right here that on the outside of these very thin bands this is where the stock price moved outside of so it was right on the outside of the bands and then you can see right here it sucked back in towards v web so this was kind of the outside of the bollinger bands so it's kind of showing you the outside ranges of where the stock could possibly go and it's kind of forecasting where it should go within a normal trading range so it's kind of just a helpful perspective to be able to see where the stock is most likely going to go and then also you can look at it as period to show you periods of consolidation so as these bands pinch back together and continue moving side by side you're going to get an area right here that's an area consolidation so if you have an area of consolidation and then you start to see the bands opening back up it's usually indicative that a move is about to happen so you can start visually looking at bollinger bands to predict where the stock price is going to go just through looking at it through experience okay the third indicator i want to talk about is volume okay so all volume is is it's showing you the market participation so you're looking at actual buying and selling amounts through these bars right so in per five minute increments since we're on a five minute chart this one red bar means that there was more selling than buying in this in this period of time right and so if you look over on the side it says 110 000 shares were traded in this time increment so if we go up to the matching candle that means in this candle we have a hundred thousand shares being traded so basically we're able to visually look at how many people are doing what and when they're doing it so this is going to be helpful to see when big moves are going to happen so if you can look at like an average volume and then there's a candle that exceeds average volume it usually means that there's going to be a larger move in price for that set a period of time so you can use that as entries in exits on your trades once you have a system once you learn trading more you'll be able to look at volume and understand how market participation is going to catalyze actual moves and make the stock price move okay so you can kind of look at how many people are buying and selling and be able to use that as a forecast to see when the stock is going to move and the last indicator i want to talk about is macd so macd stands for moving average coverage and divergent so there's a moving average in here which is the orange line and then we have another moving average which is the where we have the macd line which is essentially a moving average as well but it's basically showing you short term and longer term um changes in direction so the orange line right here is an exponential line and this is a simple line so when these lines cross it shows short term periods of differences between short-term moves and long-term moves so when these lines cross it usually indicates the fact that there's a pretty significant change in temporary direction which is kind of why it's important to look at which side of the scale the macd is on and which line is crossing through which so when the blue line crosses through the orange line it usually means that the price is going to start moving up and when it crosses down back through that it shows that the stock price is going to continue moving down so you can see right here we have a cross right here and then the stock price kind of was attempting to move up but then it bounced off of v wap right here and you can see if we take this circle we have a cross point right here at that cross point we see that this is a significant move in the down direction right then we have another cross point right here we can see that the stock price started to move up so this is kind of just additional evidence so if you're on one side of the trade and you say okay i think this stock is going to go up seeing that these lines are about to cross can really help you have more conviction when you're taking trades and saying this stock is probably going to change directions so those are basically all the indicators that i like to use for trading and i think that that was kind of a good introduction to understand about candlesticks to understand about trends and identifying areas where there's supply and demand imbalances and then kind of also understanding which indicators are going to be helpful to gain general insight on which direction the stock is going to go okay so the last concept that i want to cover before we end this video is trading psychology and a lot of people glaze over this concept but this is actually one of the most important things to learn when it comes to trading okay you need to shift your mindset from what intuitively makes sense into what a trader should think in order to be profitable and this might sound weird like you have to shift your mindset and uh shift the way you think in order to day trade but it's so true so basically what we're taught in life is that when you lose money and when you're wrong that's bad right but in trading you're going to lose money and you're going to be wrong in order to put yourself in opportunities where you can also make money so if you're always associating losing trades with behavior that you need to correct that's going to result in fear and it's going to result in irrational fear that's going to paralyze you from actually being able to be in positions that are going to allow you to make money over time so really what you have to do is you have to trust your system if you're trading without a system you're going to lose money because you're not going to be able to quantify what you actually need to do in your trades and you're not going to know if what you're doing is actually going to be profitable over time so what you need to do is you need to be able to figure out a repeatable system that you can do over and over and over and then study it to make sure that it is profitable over time so that all the steps that you're doing are making you money when you execute it over say 100 100 trades once you can do that you can understand that your system is basically the only thing that you should be focusing on and that you will make money if you follow the exact rules you've established in your system it's completely irrational to be scared or to be worried or to get angry when you lose money on trades because it's only allowing you to get into more positions to make money over time so all of this information that we just covered i go into way more depth about in a fully inclusive training program i put together called inevitrade so i've been day trading for about three and a half years now and i wanted to put together a program to consolidate the learning and to get rid of all the misinformation online and give people a course it's going to allow them to basically fully learn all these concepts and get started on the right foot so basically you don't have to start your trading career losing money and not knowing what to do okay so all of the things that i've learned over the three and a half years and all the information i've learned from practicing professionals and for making the mistakes myself i put into this course and i discuss all of this stuff in way more depth so if you're interested in learning and launching your trading career check the link below for the program but all of these things are basically um the introduction things that i wish i was able to learn in one shot in basically one video it would put me literally miles ahead of the competition and as i said in the beginning you know if you made it all the way through this program i guarantee you you're walking away today with more information and more insight on trading that's going to help you not make those mistakes and to help you be more profitable in the long run i hope that you enjoyed this video i know there's a lot of misinformation regarding day trading on youtube so i just kind of wanted to provide some clarity in this video to have a nice introductory course so that people could just get into it and understand the general concepts and have a healthy way of actually emerging themselves into the day trading industry if you like this video don't forget to throw a like and if you haven't subscribed to my channel yet please subscribe and turn the bell on so you're notified when i drop a new video but other than that guys i hope you enjoyed the video and i can't wait to see you in the next one [Music] you

Channel: Craig Percoco

Views: 447,048

Rating: 4.9588356 out of 5

Keywords: Day Trading For Beginners, day trading for beginners 2021, ricky gutierrez, warrior trading, day trading, beginner day trading strategies, stocks, penny stocks, how to start day trading in 2021, stock market, how to grow small account day trading 2021, how to trade stocks, stock trading, invest, swing trading, trading, finance, best trading broker for beginners, investing for beginners course, how to invest 1000 dollars, Stock market for beginners 2021

Id: EMc2b3_YV7s

Length: 27min 39sec (1659 seconds)

Published: Fri Jan 08 2021