I have been asked many times about Intraday Trading or Day Trading. Most people do not fully understand what Day Trading is. When asked, most will think of movies such as Wall Street, Boiler Room, or The Wolf of Wall Street. It is not that exciting to watch someone trade if you do not understand what is happening.
Overview
I got started in Day Trading. So glad you asked, or I would be writing this paper just to hear myself type. After my wife, Mary, and I left the Army in 2009, we went to a TD Ameritrade event, even in Austin, TX. It was a super cool event; however, it did not click that Day Trading was something that I could do. It wasn’t until my family and I were stationed in South Korea that I jumped into really learning the markets. Yes, markets plural.
- Equities (company stocks) New York Stock Exchange, Nasdaq, Tokyo Stock Exchange, Shanghai Stock Exchange, and Euronext Europe.
- Bond (Debt) Treasury, Corporate Debt, Mortgage Related, Municipal, Money Markets, Agency Securities, Asset-backed
- Commodities (Goods) Chicago Board of Trade, Chicago Mercantile Exchange, Commodity Futures Trading Commission, Euronext, London International Financial Futures and Options Exchange, NASDAQ OMX Commodities, National Futures Association, New York Mercantile Exchange.
- Futures (derivatives contracts, Commodity, and Securities) S&P 500, Nasdaq 100, Dow Futures, Russell 2000, Energy, Currency Futures, Metals, Food and Fiber, Grains and Oilseeds, Indexes, Interest Rates, Real Estate, etc. Day Trading ES and CL are my favorites!
- Foreign Exchange Market (Money) 128 currency pairs USD/CAD, EUR/JPY, AUD/USD GBP/JPY, USD/JPY, CHF/JPY, EUR/CAD, AUD/JPY, EUR/AUD, AUD/NZD
- Options (a derivative market that is traded in contracts) Futures, Equities, and others have options.
How to Start Day Trading
Wow, where to start Day Trading? Well, for me, I Googled That Shit (GTS). Man, I must have spent days on all the research. Who am I kidding? I am still doing research. I was getting into the weeds of Day Trading different tax treatments between Stock and Futures or just holding Stocks short-term (less than a year) and long-term (over a year).
More, more, and more questions!
What trading platform should I use?
Who’s training program should I buy?
Which broker should I use?
Are my computer and internet good enough? (I’m in Internet Technology, all you need is a good computer and internet unless Mary asks, then I need something)
I decided to focus on Futures day trading because of the taxes and because I only had to learn a few key products, mainly Oil, Gold, E Mini S&P, and E Mini NQ. I bought a training course for $5,000 that taught the basics, the fundamentals, technical analysis, and how to use the trading software (NinjaTrader). Now I wasn’t making money on trading because the lead trader’s style was to scalp with a risk-to-reward ratio of 1:1. Risking $100 to make $100 is not my cup of tea. The NinjaTrader program may or may not be a scam, but as with most things, you can learn SOMETHING that you didn’t know before.
I went looking again. I came across The Oil Trading Group and spent $3,000 for that course. After about a week of paper trading (My learning curve was small because of the other class), I went live (real money)—the risk to reward 5:1 or more. Trading allowed me to pay off both courses in 4 weeks.
Trade Worldwide
Trading in South Korea was difficult, the US market opened around 10:30 or 11:30 PM. I would trade between 01:30 – 03:00 AM, then go to bed and wake up at 06:00 AM for work. Now I wake up at 04:00 AM, trade until 06:30 AM, and then go to work.
During one trade, I asked my wife to come and see, she started to freak out. I was short ES (E-Mini S&P), I was positive on the trade of $1,500, and she wanted me to get out of it and “book the profit” I said that it had not hit my target yet. I booked a $3,800 profit on a 30-minute trade when it did. I took the next day off, and we went down to a bike shop and got Mary, Gabe, and Lily fitted for bikes. Then we all biked the Han River. That was fun and my motivation. For me, it’s not about the money but the freedom that money buys.
Losing SUCKS! I lost $2,500 in a trade, knowing it was all my fault. It made me a little sick. After I got my head right, I got back in the saddle. I would look at what went wrong and how to fix it. 90% of it is all mental. The other 10% is diving deeper into market knowledge.
Two Year Break
I had to take two years off of day trading because my job was on the East Coast, and I couldn’t trade during regular trading hours because they were the same as my work hours. Now that I am on the far west coast, I have to wake up wicked early, but I can trade.
It was time for the next step. I decided that I would learn to day trade Equities (stocks), so after a ton of research, I bought the Warrior Traders Pro course for $3,000. This course was a well-put-together class and learning a ton of useful information. I have only been paper trading to this point because I would have to open a brokerage, and for trading stocks, you have to have $25,000 in your account (GO Futures! You don’t need that much)
Prop Trading
So, how can you afford to trade stocks? Well, I have been looking at Proprietary or Prop Trading firms. They teach you how to trade. First, you try out for a spot, and if you pass, you can trade Firm money and split the profit with you. You will have to pass the SIE and the Series 7 test. This is the professional league of trading.
The course I tried was T3 because they had a sale on their Road Map to a Funded Account at $195 per month. However, the training left something to be desired, and they switched from Sterling Trader Pro to ST Web. It did not have the same features, making it harder to trade. I canceled my tryout, if I wasn’t able to feel supported at that point, then it could only get worse.
The next firm that I was looking at was SMB Capital. I bought their Options course with tons of great content. However, to get into their tryout, you must go through 2 classes: $5,000 and $6,000. Spending money on a course that will bring my game to the next level is truly an investment. The ROI is more akin to multiplication than to addition. I just need capital first, so I am back trading Futures.
Maverick Trading – Is another Prop Firm that I am looking at that is out of Ireland.
Axia Futures – Is a Prop Firm in London. I purchased all of their training courses for over $12,000, and WOW, it was worth it.
What is next
There are several Masters’s Degrees in Finance, Computational Finance, Economics, and even a Master’s of Science in Commodity Trading degree at the University of Geneva. That would be SO fracking COOL!
MIT has a Master’s in Finance, and one way to get into the program is by taking MITx MicroMasters.
As I said earlier, I am in the Information Technology field and love nerding it up. One of my dreams is to build a Day trading robot (not a High-Frequency Trading [HFT] or a Black Box).
In future articles, I will go more in-depth about what I do, even the screw-ups that cost real money. I am by far not an expert, nor will I ever find myself that pretentious. But learning is an adventure that I will continue to explore.
If you have any questions, please leave a comment, and I will address them.
Resources:
Day Trading Simulator:
thinkorswim® – from TD Ameritrade
Books:
Introduction to Probability, 2nd Edition by Dimitri P. Bertsekas
Mastering R for Quantitative Finance by Edina Berlinger
Risk Management and Financial Institutions (Wiley Finance) by John C. Hull
Options, Futures, and Other Derivatives by John Hull
Bayesian Reasoning and Machine Learning Paperback by Prof David Barber
Market Wizards, Updated: Interviews with Top Traders Paperback by Jack D. Schwager
