Picture this. The thing you’re most in love with becomes something that can potentially help you earn more than enough to save up for your children’s future, for that house you keep saving pictures of on Pinterest, and to live a comfortable life right now.
Does that sound too good to be true? Let me tell you, it isn’t!
Because I have used math, combined with a little human psychology, to build multiple formulas that allow me to make my dreams come true. And if I can do it, you can too.
- Do you enjoy playing with numbers?
- Are you obsessed with making calculations in your head?
- Are you fascinated by probability?
You think math is beautiful, don’t you?
You’re the kind of person who loves reading statistics, analyzing data, and making sense of it. You have a logical bent of mind and made a career out of it. If that is the case, and you aren’t investing already, you’re missing out on an opportunity to earn a lot more than you currently do!
Maybe you’re a mathematician, or if you aren’t and still have a way with numbers, you certainly think like one. You understand the power of logic, unlike most people.
Yet you’re not utilizing this power as well as you could!
Most people don’t get into investing because they think it’s time-consuming and requires a set of skills they don’t have. The good news for you is that neither of those is true. Day trading is the most efficient way you could be using your skills!
Mathematics is, in its way, the poetry of logical ideas. –Albert Einstein
You likely already have a full-time job. Chances are, you don’t think you have the time for day trading. I assure you that isn’t the case, and after reading this article and learning more about what day trading actually involves, I’m sure you’ll change your mind.
Or maybe the opposite is true for you… maybe you find yourself with a lot of free time in the office because many of your tasks have become automated in recent years.
Or maybe you’re so disheartened with your job that you feel like you’re on autopilot most of the day!!
Whatever your reason is, the time you invest learning about day trading now will be worth it going forward. Investing can start as a side hustle and eventually become a full-time gig. Or it can simply be an extra income stream that allows you to own that dream house, send your kids to their dream college and live the life you all deserve.
The time to get started is now!
I’ve been in this industry for over 4 years and one thing I can say with absolute certainty is that trading is not magic, it is math. That’s what YOU need to take advantage of.
How To Make Full Use of Your Love For Math
Okay, maybe you don’t love math. But you get it more than others, right?
That was the case with me. I always did well with numbers. And let me tell you, everyone in the trading industry wishes they had the skill you have.
We live in a world where math isn’t a popular subject anymore. Many people don’t understand the basic concepts of it. Yet in a profession like Day Trading, understanding math is crucial.
Chances are, in your current job, your brain and talent are underutilized and undervalued. You certainly feel like your days are becoming more and more lackluster, following the same routine. Your financial growth has become stagnant, too, and you’ve been contemplating ways to add to your income.
What is it that you would like to do with that extra income, well that’s unique to you.
Think about that dream life of yours for a second… What would you do with an extra $50,000… $100,000… $250,000+ per year?
- Save up for your children’s future education?
- Purchase that dream home for your family?
- Spend it today on better experiences for you and those you love?
Or would the fact you didn’t have to look at your bank balance before buying something for your partner, or not having to depend on a monthly paycheck to live your life change how you LIVE LIFE forever!!
Envision this future where you can spend a little something on yourself without worrying about paying the bills. Do you see that happening with your current income?
Your current job? How you currently spend your days?
Mathematics is not about numbers, equations, computations, or algorithms: it is about understanding. –William Paul Thurston
Let me reiterate: you have a skill that could earn you multiple six-figures per year with 2-3 hours of work each day. And how do you know you have that skill?
If you’re a:
- Professor of math
- Financial analyst
- Business analyst
- Data analyst
…I assure you day trading is for you.
It changed my life and it can change yours too.
I’m reminded of the time I studied engineering at college. I thought that was my calling. But I somehow knew I was capable of more (and craved greater success).
I began to study the markets and put my engineering background to good use.
Since day trading can be boiled down to knowledge of numbers and probability, having a background in engineering sped up my learning process (and my success).
If you have a background in any of the professions I listed above, your strength with numbers is more often than not, undervalued and underappreciated. With the right approach, you can make a lot of money using that same skill your boss takes for granted.
Many people think investing comes down to luck. Trust me, that isn’t the case.
Success in investing comes down to your own strength and talents. And when it comes to actual skills and abilities, your knowledge of mathematics and a logical bent of mind is imperative. As common as we think those skills are, they aren’t.
Most people do not possess them.
Most investors don’t, either! Although they wish they did.
What you have is unique, and you can put it to good use. But I imagine you have some questions. I used to have them, too. So before we go any further, let’s focus on them…
What exactly is day trading?
In simple terms, Day Trading is buying and selling stocks within the same day (it can also involve buying and selling multiple times within the same day). The objective is to earn small profits every day that stack up over time.
How is it different from traditional trading? It is short term, lower in volume, and based on predictable patterns and formulas.
Let’s look at an example…
If a day trader purchases 1,000 shares of a stock at 9:00 a.m. and if by 10 a.m. the price is up by $0.50, and they sell, they make $500 on this particular investment.
Remember, day traders typically make several investments throughout the course of a day. Prices can change drastically from one morning to the next, hence why day traders don’t carry their stock overnight.
Throughout the course of a day, decisions are made based on patterns and formulas.
You see how you fit in here? Precisely!
Your love for numbers plays a huge part. While it’s true that there’s a risk element involved with new traders, as a math expert you’re able to reduce much of this risk.
But why not traditional buy and hold investing?
The thing with traditional trading is, you need a lot more time and a lot more initial capital. Research from Dalbar Inc shows how the S&P 500 Index averaged just 9.85% a year between 1995 and 2015.
And the average equity fund investor earned 5.19% during this time.
So the best returns you can hope for in traditional selling are 10% (if you’re lucky, as high as 15%). This is fine when you’re investing millions of dollars, or you have a spare $250,000 and don’t need any returns for the next 15-20 years.
But if you need your money to work for you now… the numbers don’t add up.
Traditional investing is great for large companies but as an individual, day trading makes much more sense. Even more so for someone good with numbers.
Why You Have More Chances of Success in Day Trading Than Others
The answer is pretty simple. Most people invest based on their emotions. Someone like you with a mathematical and logical bent of mind doesn’t do this.
You base your decisions on numbers and logic.
With investing, data is power. The ability to make sense of this data is paramount when it comes to any success. The trades you make while day trading is based on predictable patterns and formulas. Not everyone knows what these patterns are, which is why YOU have a massive advantage over everyone else.
I make sure I pay attention to the data. I keep track of the predictable patterns and formulas I find. Once you do this you’re unlikely to fail. Whereas everyone else listens to their “gut” and either buys too late or sells too soon.
They fail and wonder why. Whereas you minimize your risk by basing your decisions on the data in front of you.
Life is a math equation. In order to gain the most, you have to know how to convert negatives into positives. –Anonymous
How To Get Started With Day Trading
I always tell my students’ that Day Trading is NOT easy. Whether you’re good with numbers or not, you are never immune to the risk involved.
Success doesn’t come easy, which is why it’s important you follow the right advice.
For new traders, this is what I suggest to help get you started with day trading:
1. Knowledge and Expertise:
The good news is, you’re reading this article so your knowledge building process has already begun. But this is just the beginning!
It’s important you continue to build your knowledge and expertise each day for the foreseeable future. It’s like anything else, experience plays a huge role in success.
You need to build this up over time, so make sure you read my other articles, subscribe to my YouTube Channel, and sign up to my Free Day Trading 101 Newsletter where I guide you through the steps you should (and should not) take.
You may also want to watch a discussion I recently had with Ryan Higa for his Off The Pill podcast. Ryan has 20 million subscribers and asked me some very relevant questions that’s already helped a lot of new traders get started.
This interview will answer a lot of your questions on how to get started. But as I keep saying, this is only the beginning for you. When I first got into day trading, I studied the markets each day, read books, and absorbed as much information as possible.
I attended seminars and met other successful traders. I listened to their stories and studied their own techniques and patterns.
It’s time for you to do the same so you can build your own wealth of knowledge.
Like any form of investing, Day Trading comes with its risk.
When I work with my students I make it clear that they will lose money some of the time. Especially in the beginning, it’s important you only invest what you’re able to (and willing to) lose.
I also recommend my students start with at least $3,000 of investment. You can start with less, but $3,000 gives you the leverage you need to build momentum. With this, you set yourself up for potential success from the very beginning.
Whereas if you start with less than this, you don’t give yourself enough room to work with. The money you make won’t give you the traction you need, and the commissions you have to pay will eat into most of your profits.
So if you don’t have $3,000 that you can comfortably spare, begin saving now. In the meantime, study the markets, expand your knowledge, and create a Plan!!
3. Create a Solid Plan:
Since day trading is nothing less than a business, you need to have a plan with strategy and goals. It’s important this plan includes risk management and an exit strategy.
You cannot simply jump into day trading and expect miracles.
But again, you have an advantage over most people because you have a logical bent of mind. Planning is what you do best; it’s part of your process.
Your plan must include the following:
RISK MANAGEMENT Before you start day trading, it’s imperative you formulate your risk management strategy. In order to become a professional and profitable day trader, proper risk management is crucial.
In my daily interactions with beginners, one thing I find severely lacking is their disposition to think about risk. Many of them assume that risk management will hold them back from success in day trading. That couldn’t be further from the truth.
Meticulous risk management ensures your losses remain small and don’t turn into big ones before you even notice. Determining how much risk you’re at ease with means calculating a profit/loss ratio, which is what you anticipate the profit will be versus what you might lose on a particular trade.
Establish for yourself what the maximum percentage of overall capital you’re willing to risk is. Sticking with a 1% to 3% potential loss, the overall risk remains low and gives you room to make more trades in a day.
I call this The 1% rule
Many successful day traders follow the 1% rule when it comes to risk management. It means that the maximum risk you take is no more than 1 percent on a single trade.
You’ll make several trades in a day so keeping risk at 1% means that there’s more than enough leverage to provide good returns while keeping any losses under check. It’s impossible to be profitable with every single trade, hence one must be prudent enough to keep the losses low.
GOAL SETTING: In your planning stage, figure out how much you want to earn by and when. Having a goal in mind will help you immensely in working towards it.
After all, you’re driven by numbers!
Should you set daily or weekly or monthly goals? There’s no right answer, over than what makes the most sense for you. Whatever you decide, make sure that your goals are realistic. If you’re keeping your risk at 1%, your goal for profit should be around 2% or more.
Set percentages that you’re comfortable with and those that keep you in this race in the long haul. Other than determining how much profit and loss can be expected, you should always include time in your plan.
What kind of time are you willing to invest in day trading?
Having proper goals helps you base your decisions on a plan rather than on impulse.
PAPER TRADES: This final tip is a secret weapon! I explain what this is further down in the article…
Today, I only ever work 2-3 hours. Any more than this is a waste, and it’s where a lot of traders go wrong when they transition from a part-time trader into a full time one.
However… in the beginning you need to invest A LOT more than 2-3 hours each day.
I did. I used to spend 4-6 hours studying the markets and making paper trades (more on this soon). In fact, when you first start out you spend very little time trading. You spend most of it studying, planning, and experimenting.
But this is how you build a platform so in the future you only have to work 2-3 hours each morning. Again, most new traders get this all wrong. They jump into the trades and spend too much time trading and too little studying.
Success comes from laying the foundations. This begins for you now.
Everything worthwhile takes time.
You cannot get into day trading and expect miracles. This is another reason most new traders fail. They believe taking a few courses and reading a couple of books is enough.
When you enter the world of day trading, you need to commit to it knowing it will take priority in your work life and become your major source of income in the future.
Have faith and keep going!
It may feel slow at first. You may get disheartened at times. Keep going. You need to see the bigger picture and appreciate that so long as you put in the hard work now, the results will come further down the line.
6. Technology and Tools:
It’s important to know the right tools for day trading. Many beginners make the mistake of using tools that aren’t working for them. Make sure you’re equipped with the best software for trading, scanning and charting.
You can be armed with an ample amount of knowledge and yet, not utilise it enough if you don’t choose the right tools.
You will need a resource to find stocks to trade. That’s your scanning software. On any given day, just a few stocks are worth trading in. Identifying them correctly is what makes a day trader stay profitable.
Charting is done to watch asset prices move and then decide when to make the trades. Your charting software enables you to create and view these charts. It’s a good way to understand market movements. The ability to read these charts well is what separates the most successful traders from the rest. So make sure you choose the right tool here.
When you’re starting out, you should take advantage of the numerous free trading tools available to you. These tools are significant for understanding the market, analysis, scanning for stocks to trade and formulating your trading strategy.
7. A MENTOR:
If there’s one thing I wish I had done sooner, it would have been to get a mentor!!
It’s imperative to have someone guide you. I followed a lot of people when I first got started, but I didn’t commit to a single mentor. If I had, my trading portfolio would be much larger now!
Don’t make the same mistake I did. You’re great with numbers and have all the skills you need to become a successful day trader. But those skills alone are not enough.
A mentor gives you the knowledge of what to do and when.
This saves you time and money and helps you make more of it later.
Most important of all, a mentor helps you fast-track your expertise so you can create your own techniques and patterns. This is what you need to make day trading your primary source of income.
This is how you make those life-changing amounts of money I mentioned earlier.
Get a mentor. Find someone you trust and follow their advice.
The skills… you have those already. You use them in your job every day. It comes as second nature to you. The only piece you’re missing is the knowledge on how to do this specifically for trading. This is where your mentor comes in.
Your First (or next) Step into Day Trading… Start Small!
If you want to practice day trading, start today and start small.
Do not assume that this is something you can jump right into without proper homework. Invest your time learning about patterns and trends. Study the markets so you can understand how they work (and why they do).
Start small. Experiment!
As someone who finds numbers easy, you’re perfect for the world of Day Trading. Having said that, it doesn’t mean you’ll see instant success. You have all the skills you need to win big… you just need to learn how to use these skills.
That’s why I recommend ALL my students start with Paper Trades.
What Are Paper Trades?
What if there was a way to practice day trading without the risk of losing your money?
There is. It’s called Paper Trading.
Paper trading is a way of simulating trading that allows you to buy and sell securities without risking your money.
While you’re building your expertise and honing your skills, paper trading allows you the liberty to make mistakes and learn new patterns. Since it’s a form of simulation, paper trading looks and feels exactly like the real stock market.
So you still get a feel for the real deal.
So few traders use paper trading, yet it’s a great way to figure out your strengths and weaknesses, experiment with new techniques and patterns, and manage your risk.
I still use paper trades when testing new techniques.
I recommend all my students to do the same, especially in the beginning. In fact, I tell them to expect 12-months of studying the markets and experiencing with paper trades before they invest large amounts of money.
It’s the secret weapon most successful day traders use.
Once you learn how to do the same, you too can build a very successful portfolio.
Your Next Steps…
If you’ve read this far, it’s clear you’re frustrated in your current role.
You feel under-appreciated and overworked, and although you may make good money, it never seems like it’s enough to live the life you dream of. I was in the same situation before I started day trading.
I speak to a lot of people who share situations like this.
You give so many hours to your workplace. You sacrifice family time. You sacrifice me time. And yet, at the end of the day, the monetary returns just aren’t enough.
It’s been a mission of mine to help people who want to make day trading their primary source of income.
In fact, many of my students come from this exact situation.
They go on to make some of my best, most successful students because they are perfect for Day Trading.
Now is the time for you to get started. Now is the time for you to build your own knowledge and expertise. The longer you wait, the longer it will take for you to create that life you dream about.
So right now, I encourage you to take a few steps with me
- Subscribe To My Youtube Channel: this is where I share practical training on how to trade, as well as behind-the-scenes insights into the trades I make.
- Join My Newsletter: I write these emails for people who want to learn the basics of Day Trading and the practical steps they should take to get started.
- Join The Freedom Challenge: this is my flagship program for traders who want to level-up and learn about the techniques I use, how to use them, and what to do to turn Day Trading into their primary income stream.
From one math enthusiast to another, I hope you’ve found this article valuable.