Day Trading for Dummies is a follow-up to my post titled “How to Read Stock Charts for Dummies.”  You see, people have a habit of overcomplicating things that are very simple and easy to understand.  I think this gives people an excuse to fail, honestly.

I mean, if you make something so complicated that you can’t understand it, then it’s not your fault that you failed, it’s because the subject matter is really difficult, or the task is impossible, right?  That’s total B.S.

I’m going to make this real easy for you, so you no longer have an excuse to fail.

First, to be successful in online day trading, you have to do research using the myriad of free tools available.  For example, throw a couple parameters into the screener at FinViz.com and see what pops out.  A useful scan is the gap scanner; gapping stocks are popular play in the day trading arena.

This will give you a list of stocks that have gapped.  Tighten the results by setting a price range, volume range, market cap, etc.  You can also check out the free portion of the Wall Street journal to see what they think is going to move today, and peruse the free version of Briefing.com.

Now the trick here, instead of telling people exactly how to find stocks to trade for free, you pretend like it’s some well-guarded day trading secret.  Then, you sell this secret in the form of a subscription service that you charge $30 a month for – minimum.

Next, you sell into every gap up and buy into every gap down.  The odds are in your favor because you heard somewhere once that every gap closes.  Even if not EVERY gap closes, you’re very certain that more gaps close than not.  This is not based on any actual experience or evidence, but rather something you read one time.  You know, that one book about the gaps that close all the time.

If you’re really crafty you’ll sell this brilliant piece of information along with your stock picking service, but you’ll charge double because these are the hot tips that really make the big money.  Never give exit strategies, only entries.  If your subscribers complain that they aren’t making money, you just say it’s because they aren’t seeing the obvious exits.  It’s their fault, not yours.  They weren’t cut out for day trading online.

Now, should these gaps that always fill not fill, you’re going to need an alternative plan of action.  This is where your ability to trade breakouts comes into play.  If you’ve decided a price level is important, for whatever reason (maybe it equates to your dog’s birthday), then the price crossing that level counts as a breakout.

When your subscribers inquire as to how you managed to trade these non-closing gaps so well, tell them you’ve got these set-ups that only you and the “Wall Street Pros” know and they make you tons of money.  Give them ridiculous names like “opening range breakout” and “opening gap reversal.”  If your subscribers don’t know what these are, spend 20 minutes writing an ebook, and sell it to them for $97 dollars.

There you go; day trading for dummies.  In this one post I’ve taught you everything a dummy needs to know to day trade, AND I’ve given you an entire business plan for a successful online day trading stock pick and advice service.  Like I’ve said before, we’re all just making this shit up as we go along.  Might as well at least pretend you know what you’re doing.

No related posts.

You seem to think chart analysis is a lot more difficult than it really is.  Instead of giving it a go on your own, you rely on the wisdom of us brilliant chartists to hand you money-making set-ups on your favorite stocks.

I am here to tell you, friend, that it’s not that difficult to do some basic technical analysis on your own.  Let’s take a walk through the basics, shall we?

Connect the Pointy Bits

On a stock chart, you have peaks and troughs.  In order to identify the trend of a stock, you simply find these peaks and troughs and connect them with a line.  In order to make the chart fit your thesis, it is acceptable to plot the trend slightly below, or above the actual lows or highs.  Whatever looks prettiest works best.

Color Within The Lines

Though you may take some liberty with the actual placement of the trend line, don’t go overboard.  Stay on one side of the candlesticks.  I realize it’s difficult to grasp at first because there are just so many pointy bits, but you will get it with some practice.  I promise.

Adjust Accordingly

If you have publicly posited a thesis involving a current trend, and that trend is soon broken, you may feel slightly embarrassed.  This is a rookie mistake.  The pros know you can simply change the trend to fit the chart as it develops.  Then you simply say that the trend has shifted.  Place all blame on the stock or the market in general.  The truth is, we’re all pretty much making this shit up as we go along.

Learn the Simple Chart Patterns

With a clever combination of a stock chart and your trend lines, you can even draw some really cool shapes.  Above, you will see everything from simple geometric shapes, to male genitalia.  These patterns are presumably to help us chartists trade better, but really we just think they look super awesome.

There you have it; Charting 101.  It’s really not as hard as it looks. I have done the illustrations in the style of a 4 year old, because a 4 year old can do this.  Go ahead, and give it a try.  If you want a more serious walk through on some charting basics, check out how to read stock charts.

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