Hi! I’ll show you how I would start day trading if I had to do it all over again.
I used to waste a lot of years and money because I didn’t know these simple ideas. I want to share them with you so you don’t make the same mistakes!
We’ll learn:
- What trading is in a super easy way.
- Websites and tools you need.
- How your feelings (psychology) are super important.
- Simple math for trading.
- Easy ways to read charts (technical analysis).
- How to make and test your plans.
- And I’ll show you how it all works in real life!
By the end, you’ll know exactly how to start trading the right way. Let’s go!
What is Trading? (Super Simple!)
Trading may seem complicated, but it’s essentially about buying and selling.
Look at this line on the chart. When the line goes up, it means lots of people want to buy (demand!). When it goes down, it means lots of people want to sell (supply!). The line fluctuates as people buy and sell. This up-and-down motion is called volatility.
Here’s an example: Imagine you buy 100 toy cars for $2 each. If the price goes up to $2.05, you can sell them. You make 5 cents on each car. That’s $5 profit for all 100 cars!
It’s a bit harder to do this fast, but it means you can turn a little money into more money much quicker than waiting a whole year.
I once made over $3,000 in just 2 hours by buying when I thought the price would go down. I only risked $500! This shows you how much you can make if you learn how to do it right.
Tools You Need to Trade
You need three main things to start:
- TradingView: This is a website where you can see all the charts and draw on them. It’s like your home base. Visit their website, click on “Products,” and then select “Superchart.”
- A Trading App: This is where you buy and sell.
- A Trading Journal: This is like a notebook where you write down all your trades.
How I set up: I put TradingView on one side of my computer screen and my trading app on the other. This helps me see everything.
Your Feelings and Trading (Very Important!)
This part is the most important! Your feelings can either help you or hinder your progress in trading.
Here are three big ideas you need to change in your mind:
- Losing is bad: In trading, losing is NOT bad. It’s part of the game. You have to expect to lose sometimes to play.
- Being wrong is bad: It’s okay to be wrong in trading. Being wrong and losing money just means you followed your plan, and sometimes the plan means a small loss.
- Making money means it was a good trade: Just because you made money doesn’t mean it was a good trade! A good trade is when you follow your rules and plan, even if you lose a little. If you break your rules and get lucky, that’s not a good trade because it won’t work all the time.
Trading Math: How Much to Risk?
When you buy something, two things can happen: the price goes up (you win!) or the price goes down (you lose).
Before you trade, you MUST decide how much money you are okay losing. This is called your risk. Let’s say you only want to risk $100.
You need to know your entry price (where you buy) and your stop-loss (where you will sell if the price goes down too much).
Example: If you buy something at $153.52, and you decide your stop-loss is $150.52. The difference is $3.00 ($153.52 – $150.52 = $3.00). If you want to risk $100, you divide $100 by $3.00. That means you should buy about 33.33 “units” of that thing. So, if it goes down, you only lose $100.
You don’t have to be right all the time to make money! Look at this: Say you make 10 trades.
- You lose 7 times (lose $100 each time = -$700).
- You win 3 times:
- One win makes $520.
- Another win makes $250.
- Another win makes $310.
- Total wins: $1080. Even though you lost 7 out of 10 times, you still made $1080 – $700 = $380 profit!
This is because when you win, you make much more money than when you lose.
If you understand that losing is okay, being wrong is okay, and following your plan is good (even if you lose sometimes), you’ll be much better at trading!
How to Read Charts (Easy Way)
Now, let’s learn how to look at the charts!
- Trends: Prices move in directions called trends.
- Uptrend: Price is mostly going up.
- Downtrend: Price is mostly going down. I draw lines (called trendlines) on the chart to see these trends. If the price goes under an uptrend line, it might mean the trend is changing.
- Fibonacci (FIB): This is a cool tool that helps find important places on the chart. It uses special numbers found in nature! You draw a Fibonacci tool from the bottom to the top of a big price move. It will show you lines at different levels. Often, when the price goes down a little in an uptrend, it will stop at one of these Fibonacci lines (like the 50% or 61.8% line) and then go back up. This helps us find good spots to buy.
I use these tools to find places where the price might move a lot, so I can try to make money.
Making a Trading Plan
To be good at trading, you need a plan!
- Idea: Watch the chart and find something that happens a lot. “Hey, every time this indicator turns red, the price goes down!”
- Rules: Make clear rules for when you buy, when you sell for a win, and when you sell for a loss.
- Test It: See if your rules work!
How to Test Your Idea: TradingView has a tool called “Bar Replay.” You click it, click on an old part of the chart, and then press “play.” The chart will move forward like it’s happening now. This lets you test your idea without losing real money!
Example of Testing: Let’s say my idea is: “When I see a red light on my special indicator, I’ll sell. I’ll buy back when I see a green light. My stop-loss will be above the recent high. I’ll risk $100.”
You play the chart forward.
- The indicator turns red! You “sell.”
- The price goes down, and the indicator turns green! You “buy” back. You made money! Write it down.
- Next time, the indicator turns red! You “sell.”
- Price goes up past your stop-loss. You “buy” back for a small loss. Write it down.
Use a Trading Journal: In it, you write down:
- What you traded (like “Bitcoin”).
- What time frame (like “15-minute”).
- Did you buy or sell first?
- Did you win or lose?
- How much money did you make or lose?
This journal will show you your winning percentage (how many trades you win) and your average profit (how much you make on average). This helps you see if your plan is good!
Steps to Trading:
- Practice on Chart: Use Bar Replay.
- Practice on Fake Money: Use a “simulated account” (like a pretend account).
- Trade with Real Money: Start with a bit of real money when you are ready.
My Favourite Trading Strategy (An Example!)
I’ll show you one strategy I use. I can’t tell you every secret, but this will help you start!
I look for:
- A sell signal (my special indicator tells me).
- The price breaking a trendline.
- The price going into a fibo level
My plan: I try to sell in the middle of that fibo. My stop-loss goes just outside it. Then I try to ride the price down!
Important: Not every trade is a big winner like this. Some are small wins, and some are losses.
This is how I use all these ideas together to trade.
You Can Do It!
You now have a clear path to starting your day trading journey. Learn how the market works, use your tools, control your feelings, and practice your plan!
