My First Day Trading Strategy

After going through the 6 Month Blueprint, I am at a stage where I know the basics, have a brokerage account and paper trading account, know how to buy and sell stocks, know the basics about options and the basics about technical analysis…

So now what? What should I do next? 

When I look at a chart, how do I decide to make a trade? 

What is my strategy?… 

This is a question every new trader asks once they feel they’ve built a solid foundation. There are countless strategies available, and many of them can lead to successful trading. In this post, I’ll be discussing the first strategy I’m going to explore, one shared by a transparent and knowledgeable trader named Hari, the founder of the RealDayTrading Reddit group.

Why This Strategy?

What drew me to this strategy is Hari’s transparency and willingness to share his insights without asking for anything in return. His Wiki is 100% free, and while there are paid tools and subscriptions recommended, you don’t need them to succeed with this strategy. Hari posts all his trades on X, and many beginners in his Reddit group have reported success using this method without paying for additional resources.

The Edge in Trading: Following the Institutions

One of the keys to success with trading is finding an edge in the market. An “edge” refers to a specific advantage or strategy that gives a trader a higher probability of making profitable trades over time. For retail traders like us, that edge often comes from skill rather than deep analysis, as we don’t have the same resources as large institutions like banks or hedge funds.

Institutions move markets, so a core principle of this strategy is to follow their moves. These big players—like banks, hedge funds, and mutual funds—have vast resources and can significantly influence stock prices. By observing their trades, we can follow their lead and profit from the trends they create.

The strategy focuses on two concepts: relative strength and relative weakness. These terms describe how a stock performs in relation to the overall market, specifically the S&P 500 ETF (SPY). For example, if a stock is rising while the SPY is flat or declining, that’s a sign of relative strength, suggesting that institutions are buying the stock. By identifying stocks that exhibit relative strength or weakness, traders can follow institutional money and increase their chances of success.

The Four Key Indicators

There are four primary signals that traders look for when using this strategy:

1. SPY is up, and the stock is stronger than SPY – This indicates relative strength.
2. SPY is up, but the stock is down – This indicates relative weakness.
3. SPY is down, and the stock is weaker than SPY – This is another sign of relative weakness.
4. SPY is down, but the stock is up – This suggests institutions may be buying the stock despite the market dip.

By focusing on these indicators, traders can better understand where institutional money is going and use that information to make informed decisions.

For example, if a stock shows relative strength during a market dip, it may be poised for growth once the market recovers.

Why I’m Starting Here

After reviewing the Wiki, I believe this strategy is a great starting point. The information is free, the guidance is clear, and the community is supportive. It’s encouraging to see so many traders achieving success using these methods without needing to invest in paid subscriptions. Even if I eventually decide to pursue a different strategy, the knowledge gained from following the Wiki will serve as a solid foundation.

What’s Next?

Moving forward, I plan to document my journey through this strategy in each episode of my podcast. In my next post, I’ll dive deeper into the concept of “telling the story of a stock,” a key component of the strategy, and introduce you to another trader whose methods I plan to explore – Matt, aka the “Great Mattsby.”

If you’re following along with my journey, I hope you find this content valuable. Don’t forget to subscribe to the podcast and check out the Wiki for more details on this strategy. Thanks for reading, and I’ll see you in the next post!