How I Day Trade Like a Business

one of the fastest ways to become a profitable Trader is to treat your trading like a business yes like your business now a lot of people do not understand this nor do a lot of people incorporate this into their trading I see so many Traders just wake up open an account Buy sell just take on trades without any proper structure without any proper plan and that ultimately leads them nowhere and in this video what I ultimately want to talk about is I want to talk about how do we treat trading like a business and what are their steps to do so now before diving into how to treat trading like a business or what the steps are the first thing I want to put together is how trading and a business are relatively very similar so imagine you open up a restaurant and in that restaurant business you're going to be focused on what are you selling what food will you be serving what the location will be how much investment you're going to make and you're just gonna start looking at these different data points and have its proper structure to give yourself the highest level of success so this is the same thing that we want to do in our trading and if you're not doing this in your trading you will have a very low chance of being profitable or making it here in the long run now there's three steps that we want to focus on to make our trading be correlated as a business now going on to number one having a business plan now what does this business plan or trading plan consist of so let's start going over these questions that should be asked in your trading game plan or your business game plan if you want to call it to give yourself the strong foundational aspect that you need to be a profitable Trader let's start with the first one the markets you will trade so you want to understand what markets are you going to trade are you trading the crypto Market are you trading the stock market are you trading Futures are you trading Forex like what are you going to trade now I see so many Traders go and trade crypto trade Forex trade stocks trade options trade Futures trade everything when they start out and I'm like well this is not the time for you to pay pick multiple markets pick one market become really good at it so that's the first thing you want to structure your whole business around what direction is your business going to go in so pick a market and identify what Market you want to trade and if this changes in the future that is okay but we want to create this business around one structure that we can build off now so we're not confused and nor are we all over the place after you understand what Market you want to trade now you have to go into what assets you want to trade right so if you're trading let's say Forex what pairs you want to trade if you're trading stocks what type of stocks you want to trade do you want to trade High mid cap stocks you want to trade Blue Chip companies right do you want to trade options of these stocks do you want to trade the future markets if you are trading Futures markets you want to trade micro contracts right like what type of contracts do you want to trade like these are things that you should have a foundational understanding of before you even begin to trade them so if you don't even have a foundational understanding of any of these markets or any these asset classes then you need to learn that first before you even pick why how much are you planning to invest or trade with this is a very big question you have to ask yourself and everyone watching this will have different answers based on their financial situations right now I'm not saying if you're starting from scratch you need to start with a lot of money start with something small just to get a feel of the market just to get a feel of your business right because you don't want to start a business and expose yourself with the most amount of risk you want to start a business see what works see what doesn't work and then slowly start putting more money in but that is a question you have to ask yourself that is applicable to your financial situation what is the amount that I'm gonna start with and is that amount that I'm comfortable with starting with so for example if you are starting and let's just say you are starting with five thousand dollars and that five thousand dollars is all the savings you have I wouldn't recommend you put all that five thousand dollars in the market why because a lot of your emotions are going to start playing a role in positions you take trade you take and you're just going to keep thinking about oh my God this money I can't lose so that attachment to money will make it harder for you to take on trades so I would personally probably go with the lesser amount that I'm comfortable putting in the market and I don't have that emotional connection with in terms of financial connection right and once you pick that number you have to stay stuck on that number for the next six months and say you know what I'm starting with two thousand dollars I'm starting with one thousand dollars and I'm gonna stay consistent with this amount until my business starts seeing some consistent growth and I start seeing some results I will not look to add more money which leads me to the next point which is after you have identified how much money you will be investing into the market you want to understand how much will you be risking per trade this is the main thing that is going to separate you guys from people or traders that blow their accounts which is risk management how are you protecting your downside and I'm really focused in this part is because guys if you really want to make it in this game long term and you want to survive you have to have to have to protect your downside if you do not protect your downside if you do not have a proper risk management plan you will make it really difficult for yourself to make it in this game in the long run now in order to do that once you identify how much money you are risking or how much money you're investing into the market you want to try to work off the one percent or two percent rule so for example if you are investing one thousand dollars into the market the one and two percent rule essentially says that you will not risk more than one percent of your total account in a particular trade so if you take a trade tomorrow and with one thousand dollars that one percent rule will allocate to about ten dollars so any trade that you take you are not allowed to lose more than ten dollars on that particular trade especially when you're starting out now obviously when once you get ahead of ahead in trading and you get more comfortable you get more consistent you can increase your risk aspect but starting out guys just think about it why would you want to put out so much risk when you don't understand the market dynamics you don't understand yourself you don't understand what parts of your business are going to be good what parts of your business are going to be bad so that is going to take some time so once again allocate a small percentage of risk and whatever that risk percentage is keep it consistent because if you can maintain a small risk per trade and keep that consistent you will still be here in six months you will still be here in a year or two years because you will make it easier for yourself to take losses over and over again because there will be so minimal right because I see Traders with a thousand dollar account risking 500 a trade or risking 800 a trade and then one or two trades they blow their account now the most important part about your business plan is your strategies your playbooks your setups what do your strategies look like what does your playbook essentially look like right how are you going knowing about the market like what time frames are you trading under right because you can't go and say well I'm gonna trade options in the stock market and I don't know what time frames I'm trading for you to know what time frames you're focused on you need to know what type of Trader you are in terms of your strategies are you scalping right are you getting in and out of positions very quickly are you day trading where you're holding positions you know for a couple of minutes to maybe a couple hours or you swing trading or you're holding positions for days and days or maybe weeks and weeks or are you position trading what type of Trader are you and within that understanding of what type of Trader are you it goes into what type of strategy you will use to identify the time frames you're focused on that will identify the methods and focus points that you are kind of you know paying attention to in the markets are you trading off basic price action are you using any indicators are you trading off order flow what are you trading off so all of this starts off from the top as mentioned once again what type of Trader you are how you want to change in the markets going into time frames going into strategies this whole concept is very important for you to incorporate into your trading plan you can't wake up one day and say well today I'm going to be a swing Trader and the next day you're a scalper and then the next minute you're a day trader know you want to try to focus on one way of trading get really good at it and once you get really good at it and you have strategies and setups surrounding it it will make your life a lot easier because you'll know you'll know what's working and what's not working within a certain strategy so those are the main components that you guys have to have answers to if you want to have a solid trading business plan right you should have an answer to all of that and by the way if you have an answer today and that answer kind of changes in three months that's okay the answer is not rock solid where it's set in stone it will change and that once again is fine but the idea is to have a framework to work off and build off if you build that framework now you'll make your life a lot more easier and then in the future when you do make tweaks there'll be small tweaks you'll know what what's working what's not working what areas you want to improve in and so on but if you're just going out and you don't have any of any answers to these questions you're going to be all over the place and you won't have that structural framework or guidance to get to the real point of being profitable now we're going to point number two track your trading progress if you open up a business tomorrow you're focused on your p l statements you're focused on your balance sheet you're focused on these metrics within your business you're paying attention to what parts of your business make the most money what times your business makes the most money what times your business doesn't make money or it's slow in your business right what are the strengths in your business what are the weaknesses in your business right you're going to be focused on this and the only way you can get this is by data by getting your own data and putting it on paper this is the same thing we want to do in our trading and the best way to do that is by journaling and tracking your trades so I journal and track my trades every single day every trade I take I go into trade Zella and I upload my trades and I check I recap my day I recap my week I go into every single individual trade and I get an idea of where I entered where I exited and I kind of jot down my thought process of okay well why did I buy this stock here why did I exit here what setup was it What playbook does it fall under did I make any mistakes and then when I keep doing this and I keep a pattern of it I can see multiple different stats about my trading I can see the best times I trade the best days I trade what are my best performing trades worth performing trades right what periods or duration do I hold trades that do well and durations of Trades that don't do well under what Marquee conditions right so I started getting this good understanding about my trading by just looking at my stats and if I look at my stats I start understanding that these are areas that they need to improve in and these areas that they need to take a step back in and double down on and the only way I can do that is when I once again track and journal my trades so if you guys are not track or journaling your trades right now I would recommend that you start today and create a structure to track create a structure to understand your data because that's going to allow you to understand what's working and what's not working there is a link down below for tradezilla.com which is a trading journal so check that out if you guys want to check it out and you know start journaling your trades today and just guys take trading seriously if you really want to make it in this uh profession just please take it serious and treat it like you care and you want to actually make it because the best businesses or best Traders can go back into their data and they can tell you hey on on January 26th this was how I traded what I traded on this month this is what I did that worked or what didn't work this is what my data has told me even in any business they have all of these points because that's what they use to get better and better so as a Trader why aren't you doing that now I go into my last Point have a process have a structure right where you are once again in having internal meetings if you want to call it within yourself which are called weekly Recaps which are monthly Recaps and monthly meetings you can have daily meetings and daily Recaps right that's one component of having the structure the second component of having the structure is to have a Time block Zone within your calendar as mentioned before of when you're trading when you're going to have these meetings meaning when are you going to review your days when are you going to review your weeks when are you going to review your months when are you going to spend time on educating yourself because once again it's a business 100 but you need to spend time in education and learning consistently and I'm not just talking about learning about the markets I'm talking about learning about yourself too because you're going to make so many mistakes here on out even me right now 10 years in training I still make so many mistakes and the only way I get better is by having these internal meetings Within Myself and identifying problems going through my journal going through mistakes even when I have good trades going through them and saying okay what did I do good here did I actually do well or did I get lucky and those internal meetings and structures and time blocking on a weekly basis keeps me accountable it keeps me focused and allows me to really treat this profession like a real real profession as I should and allows me to treat it like a business and that's what we're trying to do here so yeah guys this is something that's really worked for me I wish I started treating trading like a business early on in my trading career I started a year and a half in and surprisingly a year and a half in is when my trading started seeing improvements that's when I started making money uh you know prior to that my first year and a half if you ask me anything about the markets I was shifting from different risk amounts from different markets different strategies and I had no foundation and that just kind of threw me all over the place which is why I wanted to share with you guys and say hey let's save you time let's make your journey a lot more effective and quicker to get into the financial end goal of trading and becoming profitable and these are the things you guys in my opinion should be doing and I hope you start doing them now and if you found value from this video I would love to hear some of your ideas of or game plans trading game plans and business game plans that you have set for yourself and if you do have that comment that down below and once again thank you so much for watching and I will see you guys on the next video

Channel: Umar Ashraf

Views: 329,737

Keywords: Day trading, trading, day trader, trading guide, trading plan, trading journal, tracking trades, trades, option trading, stock trading, futures, options, forex, day trading, risk management, How I Day Trade Like a Business, futures daytrading, stock market for beginners, umar ashraf, umar ashraf strategy, umar ashraf trades, umar ashraf live, should you start a business or start trading, is stocks risky, is day trading hard, the truth about day trading, live daytrading

Id: nq3Jsg35pnw

Length: 14min 14sec (854 seconds)

Published: Sun Aug 06 2023