Day Trading Blog

I used the MAP Trading  Strategy to coach a slew of day traders while I was with the Emini Academy for roughly a year.  It wasn’t easy balancing day trading, traveling extensively while living overseas, and working with the Emini Academy to coach others, but I did it.  I got to meet a great group of day traders around the world and they probably didn’t know that I learned as much from them as they were learning from me.  Here is what I learned from being a day trading coach at the Emini Academy:

You Learn More From Teaching

Through my roughly 10 year career now in day trading I have noticed that you actually learn more from teaching other people than you do from just practicing.  You obviously have to start somewhere and you can’t teach people right away but once you start teaching you start to see the market in a different light.  It really helps when you have the pressure of teaching 40 to 50 (even hundreds) while they are counting on every word you say.

This has motivated me to start my own website about day trading where other people can learn how to day trade using my personal strategy.

It Takes Patience

I used be (and still am) one of the most stubborn people that I know.  It took me longer to learn how to day trade because I was always doing other things and not paying attention 100%.  If you really want to learn how to day trade you have to put aside Facebook, the kids, and even shopping site ladies, in order to really learn.  If you don’t put in 100% then you won’t get out 100%.

Be Your Own Person

Understand that there many different types of people and many different kinds of personalities.  I have seen a countless number of day traders try to replicate another person’s trading plan just because they make money every day.  When you are day trading you should try and do what you feel comfortable with, not what someone else feels comfortable with.  It’s hard for most people but when I have seen people take the time to really put thought to what they want, they succeed in day trading.

You Don’t Have To Be A Millionaire

If you want to make a living day trading understand that there is only about 1% of people that were born to do it.  Some people just have the instinct for the market while most people don’t.  You are most likely in the 99% of people that don’t have the instinct for the market and this is why its more important for you to be your own person.  If you setup a good plan you can still make a living in the market.  You will probably do better than most but it doesn’t mean you have to be a millionaire.

Back Testing

At the Emini Academy, Chris & I brought years of back testing to the table when we started to develop the Map Trading Strategy.  That is one of the reasons that I decided to begin working with the Emini Academy because both us have done so much back testing in our day trading careers.  Its very important to do back testing when learning how to day trade because if you don’t its like driving blind.

The idea of learning how to day trade is super easy isn’t it?  You find a stock, buy it really low and sell it really high and then poof!  Millionaire!  You buy and sell it million times and make thousands of dollars a day.  If it’s so easy why isn’t everyone doing it?

It’s not as easy as everyone thinks it is

That’s why I want to try and help people learn how to day trade at my new site thedaytradingacademy.com

My old Day Trading setup

There are certain aspects to learning how to day trade that many people and companies out there are not going to tell you.  It’s not about the indicators you find online or even the strategy that you are using.

It’s actually all in your head

Day Trading is as much about your mental state than it is trying to analyze and dissect a set of indicators.  Being in this industry for roughly 9 years, I will be the first to tell you that most of the indicators out in the marketplace are the same indicators retooled over and over again; different colors, names, and great marketing attached to each and every one of them.

When you learn to day trade there are typically two problems that every day trader runs into, overconfidence and fear.  Understand that most day traders are intelligent well established business men that want to start living their lives to the fullest.

Some have even created empires and are looking for other ways to generate revenue in a more effective manner with their freedom.  These types of people normally get into day trading thinking it is going to be as simple as creating the financial stability that they have created for themselves.

You cannot learn how to day trade in a matter of weeks

Unless of course you were born with a god given talent to day trade.  Yes I know you are part of the select .00001% of the population that can do that but you still are not going to be able to learn in a matter of weeks.

My Tradestation Charts

What usually happens is day traders blow off the initial training that companies provide.  They don’t apply themselves and go through the motions rather than treating it as a serious business.  This leaves most people with insufficient training and that’s when the fear sets in.

I blew through $25,000 in student loans when I first started day trading

If you don’t take it seriously the same thing will happen to you.  If you don’t believe me you can check out my about section.  After you blow that kind of money you are going to get gun shy and not losing money is going to be your primary goal.  You will miss trades then get angry at the end of the day when you realize the money you could have made.

The downward spiral continues.

The smart traders go back and re-complete the exercises that they should have done to begin with.  The stubborn traders blame it on the education and say that it’s not up to par.  Other traders bounce around from company to company spending tens of thousands of dollars of their hard earned money on software and training they will never use.  If you’re interested in learning how to day trade I have one recommendation for you.

Be Very Humble & Disciplined

Day Trading is a skill that you have to learn not something that you are born with.  The same market that can bring you to the promise land is going to bring you to your knees first.  The ones who make it are the ones that always keep an open mind and consistently work to make themselves better.

The most successful day traders that I have met in the last decade are the ones that always are willing to learn something new.  The cocky day traders that think they know everything always get to a point in their careers where they lose all or most of their fortune.

What kind of day trader are you going to be?

Deciding whether NinjaTrader or Tradestation is better is similar to deciding which kid is your favorite.  You just can’t do that!  These two programs are the only trading platforms that all futures traders use.  These two platforms are the only ones I have been using for my roughly 10 year day trading career.  I share my day trading tips and more about my strategy on my  Online Trading Academy site.

If you trade stocks or options then you have different possibilities including the programs that the big brokerages offer.  Big brokerages are much too expensive in comparison to the brokers that are tailor made for the futures market.  This is the reason why most futures day traders and professional day traders use one of these two platforms.

Choosing between the two has gotten more difficult over the years due to the fact that Ninja Trader is new to the charting realm of trading.   NinjaTrader use to be known as just an execution platform but recently taken a significant dive into charting.

Picture of a Tradestation Chart

This bodes well for many traders since Tradestation used to be the only platform that was available.  Competition is always better!  We can look at a few areas of charting to really compare the two platforms:

• Cost
• Ease of Use – Charting
• Ease of Use – Execution
• Features
• Customer Service
• Initial Setup & Installation

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Cost of Both Platforms:

Tradestation is significantly more expensive since you can use Ninja Trader for free when you are practicing or simulating.

Tradestation costs $125 a month unless you make 10 round trip trades per month out of a live account (1 round trip=you take on a position & then sell it).

If you are able to make 10 live round trip trades per  month then you only pay a $25 monthly fee for the data feed.  Ninja Trader is completely free to use on simulation.  In order to trade a live account with Ninja Trader you have to buy a license.  Price details are listed below:

Cost of Tradestation

• $25 a month with 10 live round trip trades
• $125 a month using simulation or not having 10 live round trip trades

Cost of Ninja Trader: Purchase

• $995 for a 1 broker Lifetime License (option most will choose)
• $1495 for Multi Broker Lifetime License

Cost of Ninja Trader: Lease

• $60 a month ($180 total – 3 month lease)
• $55 a month ($330 total – 6 month lease)
• $50 a month ($600 total – 1 year lease)

Advantage: Ninja Trader (who can argue with free!)

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Ease of Use – Charting:

Tradestation use to win this battle big time before the recent release of Ninja Trader 7.  With the new release both platforms are on par with each other aside from some small nuances.  Most old school day traders like myself use Tradestation.

Most new traders use Ninja Trader since it costs nothing to use until you go live.  I still prefer to use Tradestation for charting since those small nuances to me make a difference in comparison to Ninja Trader.

Advantage: Either

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Ease of Use – Execution:

NinjaTrader Matrix

There are some major differences in execution between Ninja Trader and Tradestation.  To put it plainly, Ninja Trader is light years ahead of Tradestation.  Ninja Trader has more options and some cool features that the age old Tradestation platform doesn’t have.

The data feeds that both platforms use are also very different.  I have personally noticed that Trade Station is more sensitive to spikes in volume while Ninja Trader is more sensitive to internet shortages.  When you travel around the world like I do these small differences can cost thousands of dollars.

When spikes in volume occur Tradestation tends to not be able to catch up with the data where Ninja Trader keeps right up.  When the internet cuts out even for even a millisecond Tradestation for the most part stays connected while Ninja Trader loses its connection almost immediately.

Ninja Trader’s feed options are much better than Tradestation’s.  Tradestation still uses a very old data connection that was invented ages ago, updates to the feed may or may not have happened recently.  Ninja Trader on the other hand can connect via various data feed providers that are up to date.

Advantage: Ninja Trader

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Features:

Chart Trader on NinjaTrader

When we look at the features of both platforms Ninja Trader has a clear edge.  When learning how to day trade and practicing it’s important to be able to simulate in a live environment.

What Ninja Trader provides is the ability to download historical data and replay it like its live.  You can now practice how to day trade any time of the week, day or night.

This is an invaluable tool for both new day traders and those that want to practice.  Most newbies have other responsibilities and having the freedom of time is priceless.

Another cool feature on Ninja Trader is the chart trader option.  This is where you can visually see all of your stops and targets on your chart rather than just your order matrix.  It brings a whole new visibility to day trading that took charting to a whole new level.

Advantage: Ninja Trader

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Customer Service:

Tradestation offers 24 hour customer service except for the weekends while Ninja Trader only offers email support.  While it can be annoying at times Ninja Trader support has a canny way of answering your question right away.  I have been very surprised to receive emails at 2am from a question I asked.  This does not fix the fact that speaking to someone on the phone is much easier than trying to explain it in words.

Advantage: Tradestation

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Initial Setup & Installation:

While both platforms are easy to use they are equal when it comes to setup and installation.  They both have their quirks and you will need help setting up both of them.  Most times when you buy a strategy or software the company you buy it from will assist with the install.

I have found that Ninja Trader has more videos and tutorials than Tradestation but I haven’t needed much technical support for Tradestation.  You can’t take my word on that.  I have found that both technical supports have been helpful.

Advantage: Either

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Recommendation: Ninja Trader

One of the biggest reasons most new traders use Ninja Trader is for the price.  If you are already spending thousands of dollars to start day trading the last thing you need are more expenses.  The extra chart trader features and especially the ability to simulate in a live market environment is invaluable.

I never considered traveling to Iceland in my lifetime. Not because of the cold weather, simply because I didn’t think there was anything to see (boy was I wrong). They call it the land of fire and ice because it sits right on the convergence of the North American and European tectonic plates (see a picture of the Mid Atlantic Ridge here). This causes an immense amount geothermal activity. There are gorgeous mountains, glaciers, volcanoes, and waterfalls as well as plenty of nightlife. The people are extremely friendly and everyone speaks English. I am pretty good with languages, if you search on YouTube someone speaking Icelandic you will see why I was more than relieved when I found out everyone spoke English.

Do you remember that volcano that exploded in Iceland that stranded millions of travelers because of the volcanic ash? Well, I just happened to be standing on that volcano (actually a glacier) in December. I know what you’re thinking, why would I travel to Iceland in December? IT’S FREEZING, but there are less tourists and cheaper airfare. And why would I stand on a volcanic glacier? I have a bad habit on climbing on things I’m not supposed to. My excuse is habits are hard to break.

Iceland is huge and not densely populated which makes it hard to do things on your own.  While there are many Iceland Sightseeing activities many times you have to take one of the many Iceland Tours to see everything. You don’t have to worry about internet speeds since Iceland is a modern western country.  Although they have had significant economic problems within the last decade the internet is consistently fast.  They also have modern 3g infrastructure (which has advanced since I was there) to provide excellent wireless mobile broadband.  Being part of Europe apartments and hotels can cost you a pretty penny so take your time doing your research for lodging.

You can see reviews on Tripadvisor to find a good tour company.  We made reservations with Go travel Iceland since they have the highest reviews.  Make sure your driver is Gummi, part owner of the company, he goes out of his way to make sure your stay is more than pleasant and even takes you to locations that the other travel companies don’t. Quick side note: The battery on my camera died (I now carry 3 on every trip) and I started taking pictures with my cell phone. Gummi noticed the situation and took my battery did a MacGyver trick with tape and a car charger and returned my battery at the townhouse (fully charged) where I was staying later that night.

It was my first experience couch surfing and I really lucked out. I had my own bedroom (and bed) with my own cable DSL internet connection.  Ásgeir, my couch surfing host, was extremely gracious and even took us out to party and showed us around the city.

There are two ways that people invest in the market: there are investors and day traders.  Investors are in the market for the long haul.  They place their retirement and savings into the market with a simple premise that the market will go up over time.  Day Traders are in the market a fraction of the time.  They take advantage of the day to day fluctuations (sometimes only minute to minute changes).

Investors use fundamental analysis to value what a company is worth.  What is fundamental analysis exactly?  It when you gauge the value of a company (and its stock price) by how the company handles itself.  This has to do greatly with quality of products, management, and how the company handles itself in the market as a whole.  A great example is Apple, they make great products and have an excellent product line with the Iphone, Ipad, and Macs.  In addition, they have great management which makes the company extraordinarily valuable, hence the $200 plus stock price (and climbing).  Investors also look at quality and demand for a company’s products (who doesn’t want an Iphone?).  Another excellent example is Google.

Day Traders don’t look at a company’s fundamentals at all.  They focus solely on stock price and technical analysis.  Technical analysis is using a precise set of indicators that allow you to efficiently decipher patterns in the market.  They also allow you to gauge momentum, strength, and potential reversals.  An active position for a day trader will last a few minutes to a few hours, very rarely will a position be held overnight.  Day Traders analyze individual company stocks, currencies, and even indexes.  Many call it gambling, but if you look at specific patterns and movements that occur continuously with high probability, it’s simply having the odds in your favor.

Day Trading has a tale of two extremes: extremely lucrative and deadly.  If you are disciplined and stick to a plan that works the potential is endless.  Be on the opposite end of that spectrum and you will feel EXACTLY like the picture above.  If you want more information about getting started read my 2 previous posts on why you should get started day trading:

• Ever thought of owning your own business?  Working for yourself? Consider Day trading
• Owning your own business & working for yourself – Get started day trading part 2

We also did a great video talking about day trading which you can view here.