It’s New Year’s day, 2024.
I’ve decided I want to become a day trader.
What’s the first thing I do?
Go to YouTube and watch some videos…
I don’t want to sound like a hater, but I get the YouTube game.
People selling courses have really big channels and really good videos. They’re so well done they make you want to watch the whole video, and sign up for their courses.
But the thing is, these guys are great at making engaging videos, but probably not at teaching me how to become a day trader. I know this from personal experience in the affiliate marketing niche. People make awesome engaging videos with amazing video editing skills about stuff they don’t really do. Or they give tutorials on stuff that looks so easy to do, but won’t make you money.
They put so much work into these videos because they get really good advertising dollars. So YouTubers want you to watch as many of their videos as possible. This is why they keep making videos that are so similar and target beginners.
I literally watched a video yesterday from a big YouTuber in the affiliate marketing niche giving the worst advice ever. So I’m super skeptical about YouTubers in the day trading niche. In fact many of them have been exposed for some shady stuff.
Now this doesn’t mean all course creators are bad. I’m a course creator myself, and I’ve learned everything about affiliate marketing from online courses and mentors. So I’m sure there are good people teaching day trading out there, I just need to do some real digging.
My First Day Trading Mentors and Groups
After binge watching videos exposing fake day trading gurus, I managed to stumble upon a really honest YouTuber called Iman Trading and I started to watch all his videos.
I also found a Reddit group called RealDayTrading. After reading a few posts, I knew right away that this is a community and resource I want to be a part of as I begin my journey with day trading. Here is a link to their wiki.
Below is the advice I’ve gathered from the RealDayTrading Reddit group on what to do in the first 6 months:
Month 1-2: Foundation and Setup
Unlearn and Commit
- Understand that this journey requires a minimum commitment of 2 years.
- Acknowledge that early wins can be misleading and there are no shortcuts.
Choose a Broker and Set Up Accounts
- Open an account with Interactive Brokers. Based on some initial research this is the best platform for me. Review this guide on choosing a broker.
- Set up a paper trading account for practice without financial risk.
Begin Educational Journey
- Start reading these recommended books:
- “Technical Analysis of the Financial Markets” by John Murphy.
- “How to Make Money in Stocks” by William O’Neil.
- “Options as a Strategic Investment” by Lawrence McMillan.
Month 3-4: Deep Dive into Learning
Master Basic Trading Concepts
- Learn all about buying and selling stocks, including going long and shorting.
- Understand bid and ask prices, liquidity, ETFs, Inverse ETFs, and more.
- Get familiar with setting real stop-loss orders and OCO brackets.
Introduction to Options
- Study options trading using the resources provided in the Reddit group.
- Understand option spreads and their strategic use in trading.
Practical Application in Paper Account
- Practice buying and selling stocks, options, and other instruments in the paper account.
- Apply concepts from the books and online resources in real-time simulations.
Month 5-6: Technical Analysis and Trade Review
Technical Analysis Skills
- Technical analysis vs Fundamental analysis.
- Learn how to read candlestick patterns.
- Study useful indicators and understand that there is no single ‘holy grail’ indicator.
- Keep It Simple, Stupid (KISS) – don’t overcomplicate a trading strategy.
Trading Journal and Analysis
- Sign up for a trading journal service like TraderSync.
- Record and upload trades daily, both from real and paper trading.
- Analyze each trade, labeling them with setups/mistakes, and review statistics.
- Focus on metrics like win rate, profit vs. loss, number of trades per day, and types of successful/unsuccessful trades.
- Categorize trades based on type of stock, time of day/week, trade size, and trade type (Long, Short, Option Spread, etc.).
Continuous Improvement
- Regularly review my trading plan and strategy based on the insights from my journal.
- Make adjustments to improve trading decisions and strategy.
By following these steps diligently for the first six months, I’ll build a strong foundation in day trading. The key to success in trading is consistent learning, adapting, and practicing discipline in my trading decisions.
My Thoughts on This Plan
I think this is a realistic plan and one I can definitely accomplish over the next 6 months. It’s similar to the plans that ChatGPT and Grok produced for me.
The key message is that becoming proficient in day trading takes at least two years, regardless of prior experience.
The recommended approach involves methodical learning: starting with paper trading, analyzing trades in a journal, and progressively build skills without risking real money.
This process should ideally span over a year, followed by cautious real trading with minimal quantities.
I think journaling is going to be extremely important for me. I can see myself not wanting to do this. Many successful traders have mentioned how important it is, so I need to really focus on making that a daily task.
Here’s What I Will Add to the Plan
I don’t have a really good understanding of all the markets and financial instruments, so I will want to sharpen up on the basics.
I want to better understand how the stock market actually works.
I will also get familiar with the basic financial instruments like stocks, bonds, commodities, futures, Forex, and cryptocurrencies.
Once I have done that, I will jump to these steps:
- Set up an account with Interactive Brokers and get familiar with it.
- Watch all the demo videos available and learn how the dashboard works.
- Open a paper trading account and get extremely familiar with this platform.
- Learn everything about buying and selling stocks. I plan on reading the recommended books and taking some courses on Udemy or watching YouTube videos about the basic trading concepts listed above.
Next, I will study technical analysis and open a trading journal with TraderSync.
After getting comfortable with all of this I will start to study day trading strategies.
I will update this post in July, 2024. Click here for the full update.
