The Truth About Day Trading Stocks A Cautionary Tale About Hard Challenges and What It Takes To Succeed

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  • Edition: 1st
  • Format: Hardcover
  • Copyright: 2009-07-07
  • Publisher: Wiley
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A realistic guide to day trading today's stock marketThe Truth About Day Trading Stocks is an uncompromisingly realistic look at the challenges involved in becoming a successful day trader. Based on author Josh DiPietro's ten years of experience as a day trader, this book dissects the psychological and strategic pitfalls that cause most aspiring day traders to fail. Written in an engaging and sometimes humorous tone, The Truth About Day Trading Stocks relates his own experiences, and in so doing, provides the reader with valuable lessons. This book is an antidote to trading industry hype that encourages traders to believe that trading is easily learned and is a fast path to wealth. It explains that the conventional route of attending seminars, buying software, and opening an account with a major brokerage house is a path to failure. 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. The goal of this guide is to slow down the over-eager, over-optimistic amateur day trader by imparting a realistic view of the challenges of day trading and providing tools, techniques, and insights to become a successful trader without losing a huge amount of money in the process.Josh DiPietro (West Dennis, MA and New York, NY) has been day trading stocks for ten years. He operates a Web site, www.daytraderjosh.com, and provides training programs for aspiring day traders.

Author Biography

JOSH DIPIETRO has been day trading stocks for ten years. He operates a web site (www.daytraderjosh.com) and provides training programs for aspiring day traders. DiPietro's trading approach involves making many trades every day, taking small profits, exiting losing trades quickly, and minimizing transaction costs. He is a critic of the educational paths offered by the established trading industry and is dedicated to providing an alternative educational approach for aspiring traders.

Table of Contents

Prefacep. xiii
Acknowledgmentsp. xvii
Introduction: The Wholehearted Amateurp. 1
Psychological Truths and What to Do about Themp. 5
Truths about Yourself to Know Firstp. 7
How Often Do You Trade, and How Profitably?p. 10
How Much Are You Trading in Capital and Leverage?p. 10
How Long Have You Been Trading?p. 12
What Financial Instruments Are You Trading?p. 13
Are You Trading Other Peoples' Money or Your Personal Capital?p. 13
Are You a Licensed Trader, or Trading Independently?p. 13
How Were You Trained?p. 14
Rules to Rememberp. 14
How Emotions Can Destroy a Tradep. 15
The Fear Factorp. 16
Greed Is Not Goodp. 18
Rules to Rememberp. 21
Preventing Overconfidencep. 23
Ignoring Your Predetermined Stop/Loss Pricep. 24
Holding Too Longp. 24
Rules to Rememberp. 26
From Impatient to Cool, Calm, and Collectedp. 27
The Waiting Is the Hardest Partp. 29
Deciding to Learn Morep. 31
Rules to Rememberp. 33
Taking Breaksp. 35
Break When Your Confidence Is Lowp. 38
Break Because It's Just Not Workingp. 38
Break and Then What?p. 39
Rules to Rememberp. 42
The Truth about Your Riskp. 43
The Importance of Risk Managementp. 45
The Amount of Trading Capital Allocated to Each Tradep. 46
The Timing for Allocating Capital to a Tradep. 47
Overexposure to Riskp. 48
The Stock or Company You're Tradingp. 49
The Time of Day You're Tradingp. 49
Gamblingp. 50
Rules to Rememberp. 51
Why Overexposure to the Market Can Hurtp. 53
Time versus Timingp. 54
Rules to Rememberp. 58
Budgeting: Knowing Your Financial Limitationsp. 59
Don't Quit Your Day Job: Catch-22p. 60
Crunching the Numbersp. 62
Cushion Cashp. 63
Rules to Rememberp. 64
Minimizing Your Risk with Stop/Lossp. 65
Making Stop/Loss Automaticp. 65
Rules to Rememberp. 71
Averaging-Down: A Skilled Strategyp. 73
To Average-Down Successfully Takes Masteryp. 74
Know-How Doesn't Grow Overnightp. 75
Rules to Rememberp. 77
Gambling versus Day Tradingp. 79
Rules to Rememberp. 82
Intraday Trading Truthsp. 83
Why Some Traders Make More Mistakesp. 85
Pick Your Stocks Carefullyp. 86
Focus, Focus, Focusp. 87
Pay Attention to Market-Moving Newsp. 90
Rules to Rememberp. 91
Trading Consistently All Dayp. 93
Rules to Rememberp. 98
Stock Picking: Simplifying the Processp. 99
Your Stock Should Have an Average Daily Volume of One Million Shares or Morep. 100
Choose Stocks between $10 and $100p. 101
Pick Stocks That Display Tradable Intraday Price Swingsp. 102
Don't Trade Stocks Affected by Strict Federal Regulationsp. 102
Beware of Stocks Directly Affected by Current News Headlinesp. 104
Rules to Rememberp. 105
Why News Can Be Just Noisep. 107
Trading on News versus Monitoring Newsp. 109
Rules to Rememberp. 111
The Truth about Training and Preparationp. 113
About Those Training Programsp. 115
Seminars for the Greenhornsp. 116
Training Programs for the More Experienced Traderp. 119
Tips for Selecting the Right Programp. 120
Rules to Rememberp. 123
Picking the Right Online Broker: Pay-per-Share versus Pay-per-Tradep. 125
Starting Out with Pay-per-Tradep. 125
Transitioning to Pay-per-Sharep. 126
High Leverage Pros and Consp. 130
Hang on to Your Pay-per-Trade Accountp. 131
Rules to Rememberp. 132
Paper-Trading Strategyp. 133
Paper Trading for the Amateurp. 134
A Word about Advanced Paper Tradingp. 139
Rules to Rememberp. 140
Trading for Skill versus Trading for Incomep. 141
Building a Foundation of Trading Skillsp. 141
First Levelp. 144
Second Levelp. 146
Third Levelp. 147
Summaryp. 148
Rules to Rememberp. 150
The Perfect Trading Dayp. 151
Early Morning Activitiesp. 151
Pre-market Tradingp. 153
The Opening Bellp. 156
Midday Activitiesp. 157
The Last Hour of Tradingp. 159
The Closing Bellp. 160
After-Market Tradingp. 160
Homeworkp. 161
The Worst Trading Dayp. 163
Early Morning Activitiesp. 163
Premarket Tradingp. 164
The Opening Bellp. 166
Midday Activitiesp. 166
Last Hour of Tradingp. 167
The Closing Bellp. 168
After-Market Tradingp. 168
Homeworkp. 169
Conclusion: Parting Wordsp. 171
Appendix: Rules to Rememberp. 175
About the Authorp. 181
Indexp. 183
Table of Contents provided by Ingram. All Rights Reserved.

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