Description
Book SynopsisThe Truth About Day Trading Stocks
A realistic guide to day trading today''s stock market
In terms of the potential for heavy financial losses, day trading is a high-risk profession. No one should contemplate day trading without giving thought to the ways he can lose, and all the ways to lessen or avoid them. Yet many people enter the game with unrealistic expectations, unaware of what it takes to succeed. Seminars and software alone do not make a successful day trader, cautions author Josh DiPietro. Instead, a trader must learn hard lessons of self-discipline, consistency, and staying in the game for the long haul to have a real chance of success. In The Truth About Day Trading Stocks, DiPietro offers the amateur day trader a brutally honest look at the pitfalls of day trading?and how to hopefully avoid them.
Written in an engaging and sometimes humorous tone, The Truth About Day Trading Stocks draws on the author''s own experiences as a day
Trade Review
"DiPietro gives an insight int to what it takes to become a day trader. And he should know..." (City A.M. July 27th 2009)
Table of Contents
Preface xiii
Acknowledgments xvii
Introduction: The Wholehearted Amateur 1
Part I Psychological Truths and What to Do about Them 5
Chapter 1 Truths about Yourself to Know First 7
How Often Do You Trade, and How Profitably? 10
How Much Are You Trading in Capital and Leverage? 10
How Long Have You Been Trading? 12
What Financial Instruments Are You Trading? 13
Are You Trading Other Peoples’ Money or Your Personal Capital? 13
Are You a Licensed Trader, or Trading Independently? 13
How Were You Trained? 14
Rules to Remember 14
Chapter 2 How Emotions Can Destroy a Trade 15
The Fear Factor 16
Greed Is Not Good 18
Rules to Remember 21
Chapter 3 Preventing Overconfidence 23
Ignoring Your Predetermined Stop/Loss Price 24
Holding Too Long 24
Rules to Remember 26
Chapter 4 From Impatient to Cool, Calm, and Collected 27
The Waiting Is the Hardest Part 29
Deciding to Learn More 31
Rules to Remember 33
Chapter 5 Taking Breaks 35
Break When Your Confidence Is Low 38
Break Because It’s Just Not Working 38
Break and Then What? 39
Rules to Remember 42
Part II The Truth about Your Risk 43
Chapter 6 The Importance of Risk Management 45
The Amount of Trading Capital Allocated to Each Trade 46
The Timing for Allocating Capital to a Trade 47
Overexposure to Risk 48
The Stock or Company You’re Trading 49
The Time of Day You’re Trading 49
Gambling 50
Rules to Remember 51
Chapter 7 Why Overexposure to the Market Can Hurt 53
Time versus Timing 54
Rules to Remember 58
Chapter 8 Budgeting: Knowing Your Financial Limitations 59
Don’t Quit Your Day Job: Catch- 22 60
Crunching the Numbers 62
Cushion Cash 63
Rules to Remember 64
Chapter 9 Minimizing Your Risk with Stop/Loss 65
Making Stop/Loss Automatic 65
Rules to Remember 71
Chapter 10 Averaging-Down: A Skilled Strategy 73
To Average-Down Successfully Takes Mastery 74
Know-How Doesn’t Grow Overnight 75
Rules to Remember 77
Chapter 11 Gambling versus Day Trading 79
Rules to Remember 82
Part III Intraday Trading Truths 83
Chapter 12 Why Some Traders Make More Mistakes 85
Pick Your Stocks Carefully 86
Focus, Focus, Focus 87
Pay Attention to Market-Moving News 90
Rules to Remember 91
Chapter 13 Trading Consistently All Day 93
Rules to Remember 98
Chapter 14 Stock Picking: Simplifying the Process 99
Your Stock Should Have an Average Daily Volume of One Million Shares or More 100
Choose Stocks between $10 and $ 100 101
Pick Stocks That Display Tradable Intraday Price Swings 102
Don’t Trade Stocks Affected by Strict Federal Regulations 102
Beware of Stocks Directly Affected by Current News Headlines 104
Rules to Remember 105
Chapter 15 Why News Can Be Just Noise 107
Trading on News versus Monitoring News 109
Rules to Remember 111
Part IV The Truth about Training and Preparation 113
Chapter 16 About Those Training Programs 115
Seminars for the Greenhorns 116
Training Programs for the More Experienced Trader 119
Tips for Selecting the Right Program 120
Rules to Remember 123
Chapter 17 Picking the Right Online Broker: Pay-per-Share versus Pay-per-Trade 125
Starting Out with Pay-per-Trade 125
Transitioning to Pay-per-Share 126
High Leverage Pros and Cons 130
Hang on to Your Pay-per-Trade Account 131
Rules to Remember 132
Chapter 18 Paper-Trading Strategy 133
Paper Trading for the Amateur 134
A Word about Advanced Paper Trading 139
Rules to Remember 140
Chapter 19 Trading for Skill versus Trading for Income 141
Building a Foundation of Trading Skills 141
First Level 144
Second Level 146
Third Level 147
Summary 148
Rules to Remember 150
Chapter 20 The Perfect Trading Day 151
Early Morning Activities 151
Pre-market Trading 153
The Opening Bell 156
Midday Activities 157
The Last Hour of Trading 159
The Closing Bell 160
After-Market Trading 160
Homework 161
Chapter 21 The Worst Trading Day 163
Early Morning Activities 163
Premarket Trading 164
The Opening Bell 166
Midday Activities 166
Last Hour of Trading 167
The Closing Bell 168
After-Market Trading 168
Homework 169
Conclusion: Parting Words 171
Appendix: Rules to Remember 175
About the Author 181
Index 183
