If you are searching for a book that will get you started in day trading, this is it.
Josh DiPietro will give you the straight truth about the reality of being a day trader. It is a career choice like any other. It takes hard work to become successful. Almost every beginning trader blows out their account before learning to manage risk. You can read books and take seminars but only real trading will make you successful.
I have been an active trader for over 12 years and I agree completely with these observations from the author.
Josh’s key points are to start with 100 share blocks only, to limit exposure and build skill. Do not move above this amount until you have been successful for months, then only increase trade size very gradually. You can make money trading 100 shares at a time through out the day. This also keeps your emotions under control so that no one trade has to much riding on it. Use preset stop losses if your trade goes against you. Most amateurs make the mistake of stubbornly holding losing positions or even increasing their position on the way down, this can be disastrous. The key to day trading success is consistency, making the money you need daily, by having a great win ratio.
Josh’s system is scalping .20 cents to .40 cents off nice steady consumer staple stocks that trade at least a million shares daily on the market. He uses the previous days support and resistance levels as a trading range along with volume. His trading is counter trend, shorting at break outs to new highs and going long at support to try to catch retracements to profit. I have used this system in range bound markets with much success. So I can say his system is sound from my personal experience. He also wants to avoid stocks if they are in the news or earnings are expected, because that will disrupt the range and lead to volatility and trends.
He also explains the value of using pay per share brokers versus pay per trade brokers. If you qualify for an account, some pay per share firms will give you 10 to 1 or even 20 to 1 leverage. This is for the advanced and you must show them your ability to trade before they will release that much buying power to you. But it enables you to be profitable with $10 and $20 scalps because the commission on a 100 share trade is about .35 cents. This is an opportunity amateurs rarely hear about. They are use to paying $7 or more for stock trades.
I have read many trading books and day traded successfully through this recent financial crises, with a 31% return from September 2008 to July 2009. I also was one of the rare people who went to a cash position in my 401K on January 4th of 2008. With my background I still learned several things from this book. I highly recommend this book for all beginning and intermediate traders who are interested in day trading. The author almost makes day trading boring, which is a good thing. It is better for your trading to be a business and not an exciting casino. Regardless of whether you decide to day trade like this author suggests it is a must read for traders so they can learn a style that has lead to his success. I wish I would have had this book when I started day trading it would have saved me both money and time.
