Summary of HOW TO DAY TRADE FOR A LIVING SUMMARY (BY ANDREW AZIZ)

Main Financial Strategies and Concepts:

• Stocks in Play:
  • High relative trading volume.
  • A fundamental catalyst (e.g., earnings report, merger).
  • Trading independently of the overall market and its sectors.

  Andrew Aziz utilizes both pre-market and real-time intraday scanners to identify these stocks.

• The 2% Rule:

  Traders should never risk more than 2% of their total capital in a single trade to manage risk effectively. This approach allows traders to endure losses while surviving long enough to achieve profitability.

• Understanding Candlesticks:

  Candlestick charts illustrate the balance of power between buyers and sellers, reflecting market psychology. The color and shape of candlesticks indicate whether buyers (bulls) or sellers (bears) are dominating the market.

• Support and Resistance Strategy:

  Focus on identifying support (price floor) and resistance (price ceiling) levels. Trading steps include:

  1. Identify support and resistance areas before the market opens.
  2. Look for indecision candles at support levels with high trading volume to buy.
  3. Set stop-loss orders slightly below support.
  4. Hold until the next support or resistance level.
• VWAP Strategy:

  VWAP (Volume Weighted Average Price) is a critical indicator for day trading. Trading steps include:

  1. Check if the stock respects VWAP as support.
  2. Buy slightly above VWAP and set a trailing stop below it.
  3. Hold until reaching the next resistance level.
  4. Consider selling half of the position near resistance and adjusting stop-loss orders accordingly.

Summary of Methodologies:

• Focus on Stocks in Play for trading opportunities.
• Adhere to the 2% risk management rule per trade.
• Utilize candlestick charts to gauge market sentiment.
• Implement simple support and resistance strategies.
• Master the VWAP Strategy as a key trading indicator.
• Practice trading in a simulator to enhance skills without risk.

Presenters/Sources:

• Andrew Aziz, author of "How to Day Trade for a Living."

Notable Quotes

— 00:50 — « Day trading is a license to print money, if you succeed, and it's probably the only one that the government won't put you in jail for ... »

— 04:25 — « Look for opportunities where you are risking cents to earn dollars. »

— 05:11 — « Day trading is the study of mass psychology. »

— 07:30 — « If you make it too complicated, your risk curve-fitting and if the patterns are too arbitrary, they become subjective and suddenly you can see them everywhere. »

— 11:35 — « Trading is much like learning to ride a bicycle - once you've mastered this skill, no one can take it away from you. »

Category

Business and Finance

Video