5 Day Trading Strategies You Need to Know

Looking for some day trading strategies that have the potential to actually work?

It’s not easy to find your strategy, but having a strategy is a must for trading.

And if you want to be a successful day trader, you need to learn to think far beyond simply buying and selling stocks. You’ve got to be meticulous with every trade.

You have to research, study, and make sure that your market approach aligns with your lifestyle and risk tolerance.

In this post, I’ll give some tips on day trading for beginners, common intraday trading strategies, and entry and exit strategies that can help you refine your day trading methods.

Let’s do this!

Is Day Trading Difficult?

I’m sure you’ve heard this: “90% of traders lose.” That might not be an accurate percentage, but it’s fair to say that the majority of traders lose…

Trading isn’t easy — if it was, everyone would be doing it. 

A lot of new traders have come into the market this past year thinking they can just follow some hot stock picks from a ‘guru’ and they’ll be rich…

That’s not how it works. I want my students to become self-sufficient. Never follow anyone’s picks or trades — not even mine!  The reason I share all my trades on Profit.ly is so you can learn from them…

Ask yourself why I took the trade. What was the catalyst and the pattern? These are the things you need to learn for yourself so you can become a self-sufficient trader.

How Much Money Can Day Traders Make a Day?

Day trading can be a lucrative career, but it doesn’t happen overnight. I’ve taught students in my Trading Challenge who have gone on to make three, four, and even five figures a day. Some have even had six-figure days!*

I had the biggest year of my trading career in 2020 — I made over $1 million in profits.* (And I’m proud to donate it all to charity.)

(*Note that these results aren’t typical. Top Trading Challenge traders and I put in the time and dedication and have exceptional skills and knowledge. Most traders lose money. Always remember trading is risky … never risk more than you can afford.)

So, yeah, there’s money to be made in the markets … if you know what you’re doing.

How much you make will depend on you, your risk tolerance, and the size of your positions in any trade.

But try not to focus on the money — the money mindset won’t get you ahead in trading. It’s more about the process. Focus on having a day trading strategy, an education, discipline, and dedication.

What’s the Best Market for Day Trading?

My favorite exchanges for day trading are the OTC markets and the Nasdaq. These are penny stocks that typically trade for under $5 a share. It’s where you’ll find the shadiest companies and those in the earliest stages of development.

That allows me to take advantage of informational inefficiencies.

Most people who buy penny stocks find out about them because they’ve heard them being hyped up or promoted. They buy in thinking they found the next big drug or technology. The reality is, most penny stocks never make it. That’s why I only trade them, I don’t invest.

Find out how I lost $500,000 of my own money on a penny stock investment — read my book, “An American Hedge Fund.” (Get your no-cost downloadable version here.)

5 Top Strategies for Day Trading

A trading strategy combines your trading rules, chart patterns, and your trading plan. With so much to consider before a trade, it’s important to build your knowledge account first.

The right day trading strategy is about having the right trading indicators line up to offer good risk/reward. If you want to know the indicators I consider before I take a trade, study my Sykes Sliding Scale. Then watch my “Trader Checklist Part Deux” DVD.

If you’re new, try paper trading on StocksToTrade before risking your own hard-earned money.

(Full disclosure: I helped develop StocksToTrade and I’m a major investor. That said, it’s my dream stock-scanning tool. It’s designed to help save time in finding the best stocks that fit my patterns and strategy.)

If you’re ready to trade, here’s a list of trading strategies you can incorporate into your trading…

Day Trading Strategies #1) Plan Your Entries and Exits

It’s important to have entry and exit strategies for day trading. This not only affects the profits from the trade — it’ll also affect how comfortable you are in the trade.

Chasing a stock or taking a trade without a plan is risky. It can make you uncomfortable in your trade. You start second-guessing yourself and worrying about losing money. That can lead to bigger than expected losses and mental frustration.

When you’re comfortable in a trade, it’s easier to stick to your trading plan. 

You should have an entry and exit plan before getting into a trade. Once you’re in the trade, you can adjust your exit if the stock doesn’t do what you thought it would. I do it all the time…

It doesn’t matter if it’s a small loss or small profit, if a stock doesn’t do what I want or expect — I’m out!

Day Trading Strategies #2) Trade Volatile Stocks

I love to trade volatile stocks. That way I can be in and out of trades quickly. I don’t have to hold a position long term to get a return of 10% or 20%, like conventional investors.

I take the meat of the move, then move on to the next trade.

But you need to always be ready to cut losses quickly. Volatile stocks can have huge price swings in a short period of time. Especially a stock that has a low float and high volume.

If you’re not sure how to trade through all this crazy market volatility, get my no-cost “Volatility Survival Guide.” I created it specifically for the volatile market we’ve had lately.

Day Trading Strategies #3) Trade High Volume Stocks

Stocks with high volume have the most potential to go supernova. Volume means demand, and demand drives prices. Especially if the volume is due to some kind of good news catalyst. I’ll give you some examples of those later…

You also want to make sure you can get in and out of your position easily. There’s nothing worse than getting stuck in an illiquid stock.

Day Trading Strategies #4) Use Technical Analysis

A lot of traders use all kinds of complicated chart indicators … I like to keep it simple.

Fundamental analysis is more for long-term investors. For short-term trades, I use technical analysis to trade off key levels on the chart.

When a stock breaks above a previous area of resistance, it can create a powerful move to the upside and could be the start of a longer-term uptrend.

Day Trading Strategies #5) Learn Some Key Patterns

Learning to identify patterns is one of the most important day trading strategies. I place a huge emphasis on this in the Trading Challenge.

I teach my Challenge students about common patterns and day trading strategies such as supernovas, buying breakouts on big volume, and what I call my go-to pattern — dip-buying morning panics.

(Sign up for my Supernova Alerts to get a heads-up on stocks with the potential to go supernova.)

Learning to identify “boring but reliable” patterns can be a great way to start on the path to trading success. History repeats itself, so once you learn the key patterns, you can use them to your advantage over and over.

Interested? “The Complete Penny Stock Course” is a must read. It’s an organized take on all my lessons by one of my students who was fed up with my lack of organization! (Seriously…)

Get the book as a free bonus when you sign up for my 30-Day Bootcamp. 

My Bootcamp’s a month’s worth of lessons and homework. You can do them at your own pace and repeat them as many times as you need. You also get my “Pennystocking Framework” DVD. It’s an incredible value at under $100 for all three!

Day Trading Strategies for Beginners: 10 Tips for Success

If you’re looking for day trading tips for beginners, check these out…

#1) Remember That You’ll Never Get It Right All the Time

No matter how prepared you are, you’ll never get it right every time — this is more of an art, NOT an exact science. Think of successful trading as a moving target.

Knowing this can actually be part of your strategy. Keeping in mind that it’s impossible to nail every trade perfectly can help you push to do the best you can. Research, study, and chart out whether you’re taking a calculated risk.

Learn to take the meat of the move. You won’t catch the bottom and top of every trade. Take what the market gives you, and be grateful for every opportunity.

#2) Learn a Variety of Trading Styles and Setups

As you begin to trade, you’ll learn what works for you and what doesn’t. You’ll be better at different patterns and particular types of setups.

Some traders really love short selling. Others really like looking for low-priced stock breakouts with big volume. You’ll tend to move toward the methods that play to your strengths.

In the Trading Challenge, I stress the importance of learning how to trade in a variety of ways. Experiment with different setups and strategies to see what makes sense to you. Then hone in and focus on the best trades that you have the most consistency with.

#3) Look for Earnings Winners

Companies report earnings four times per year. People use these quarterly reports to re-evaluate a company’s worth. An earnings report can be a great catalyst if the news is good. A stock can spike in reaction for several days, or even weeks.

Stocks can react to bad earnings, too. Usually, the first day or two after the earnings release will tell you all you need to know … No matter how good the numbers look, if the stock doesn’t spike in a meaningful way, it’s NOT an earnings winner. Any good news was probably priced in already.

Don’t buy a stock just because the company’s releasing earnings. And don’t try to predict whether it will be good or bad news. I prefer to react to the market…

I haven’t seen earnings impacting stock prices as much lately as they have in the past. That’s why it’s important to…

#4) Be Willing to Change Your Setup

This advice may seem contrary to the last few points. But it’s important to talk about how you need to be adaptable. Basically, even if you’ve refined patterns and setups that work for you, the ever-changing market can shift on a dime.

The setup that’s worked for weeks or months might suddenly stop working. If you notice this happening over and over, you need to be willing to change how you trade.

It doesn’t mean that you’ve been doing anything wrong. It simply means the market is headed in another direction and you need to adapt your methods to change with it.

You won’t beat the market by force or sheer will, so it’s always better to go with the flow … adapt or perish, it’s your choice!

#5) Is There a New Investor?

A big new investor can bring interest and hype to a company. It can be a powerful catalyst.

When someone buys more than 5% of a company, there has to be a Securities and Exchange Commission (SEC) filing disclosing the new investment. There could be a press release or news stories as well.

The bigger and more credible the new investor, the better it is for the stock. Personally, I love piggybacking on big new investors, because it’s almost as if they did the research for me.

#6) Are There Any New Products or Contracts?

A new product or contract announcement can also be a great catalyst. This type of news can spike a stock for days or weeks. Simply put, announcing, teasing, or debuting a new product gets people excited.

Even if you don’t know if the new product or contract will succeed, it can create hype. One of my favorite ways to trade these is to “buy the rumor, sell the news”. The fact is, even if a new product or contract fizzles out, the stock can still spike in anticipation.

I go over earnings and contract winners in my most comprehensive DVD, “How to Make Millions.” It’s 35 hours of educational content to get you started on your penny stock trading journey. Bonus: all proceeds from the sale go to charity. It’s a win-win.

#7) Use the Right Broker

Don’t overlook the importance of having the right tools to execute your trading plans. You need the right broker as part of your trading arsenal.

Will you be short selling? Trading OTCs? You need the right broker to match your day trading strategy.

Find out more about choosing a broker here.

Other important tools to have are the right trading platform, charting tools, and breaking news sources. You can get all the best tools on StockToTrade. Its Breaking News Chat is responsible for a major portion of my trading profits in 2020.*

Get a 14-day trial of StocksToTrade with the Breaking News Chat for only $17.

#8) Learn From Your Mistakes

This shouldn’t just be one of your day trading strategies, but life advice. Be willing to learn from your mistakes!

Every trader will make mistakes; it’s inevitable. However, if you’re willing to learn from them, evaluate your performance, and avoid them in the future, they can be your biggest teachers.

Yes, it can be humbling to face the fact that you’ve messed up, but it can actually really help

you in the long run.

#9) Try Swing Trading

Swing trading isn’t a day trading strategy, but it’s an important one to note for beginners.

Swing trading is a strategy where you hold shares overnight or for a few days or weeks. It’s great if you have a small account or you’re under the pattern day trader (PDT) rule.

It’s also a great strategy for beginners who don’t have time to watch a screen all day because of a full-time job.

With a swing trading strategy, you look for longer-term trends on the daily chart.

#10) Take Trading Seriously

Trading isn’t a 9-to-5 job. That’s one of the great things about it. It offers freedom, no boss, and the possibility of unlimited income (and losses).

But it also means you’re not accountable to anyone but yourself. It’s up to you to stick to your rules and setups, cut losses on losing trades, and be honest with yourself about what you’re doing wrong and how you can improve.

You have to treat trading like a job, not a hobby. 

That’s where being part of a community can be helpful. You can chat with other traders, exchange ideas, and meet new people.

In my Trading Challenge chat room, you get access to my top students. You can ask them questions and see their commentary daily. It can help you feel like you have a community of support and also other traders to keep you accountable.

Conclusion: Should You Start Day Trading Now?

Finding success as a day trader isn’t always easy. But by arming yourself with some key strategies, you’ll give yourself a powerful edge that can help you get ahead.

Having a mentor is the fastest way to speed up your learning curve. I have 20+ years of experience in the market. I’ve already made all the mistakes in the book, so you don’t have to…

If you’re truly dedicated to learning the markets and investing in your education, apply for my Trading Challenge. It’s where all my top students started. It’s not a coincidence…

Challenge students get access to all my educational resources, like my weekly live webinars, video lessons, DVDs, and my Challenge chat room. Many of my top students are moderators in the chat and share ideas and answer questions.

Start implementing these strategies today and keep trying to improve every day. It’s not easy, but keep working towards your financial freedom and change your life!

What are your favorite day trading strategies? Let me know in the comments … I love to hear from you!