How to choose the right mentor

Trade coaching is fast advancing. Like shepherds, most of the day trading mentors have blessed many with their advice and tutorials. Others haven't been so lucky with this aspect too.

These mentors have various educational programs and social media platforms that they use to communicate with followers to share their trading experiences.

But it might be difficult to figure which day trading mentor is the best fit for your needs.

Today, we will share some of the profound factors that you must consider before choosing your mentor.

Trading Style/Philosophy

Philosophy is the fortitude of day trading. Every day trader has some form of philosophy or trading style he goes with.

Like football coaches, every day trading mentor has their approach, tactics, and techniques. Every mentor draws this from years of practice and experience.

One of the major mistakes day traders make in choosing a mentor is not figuring out the trading style of the mentor.

Some mentors might be risk-takers, others might be the conservative type. Every one of them works.

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It is important because every style or philosophy must go with the trading layout.

Your budget or risk tolerance might not be parallel to the risk type of trading hence a mentor whose style centers on risk-taking might not be suitable for you.

Assess your trading style and match it with a mentor that fits in that sphere.

Trading Strategy

Another important factor is the strategy the mentor uses. Every mentor has his arsenal or warehouse of strategies he juggles according to a specific trading climate.

For example, Mentor A might like break-in/break out strategy but Mentor B might not like it.

This doesn't mean the strategy is bad or ineffective in general. Everyone uses what he feels is effective.

It is quite interesting to note that some of these mentors have used these strategies for a long time so much that it becomes a major trademark to their coaching style.

It is imperative to read on some of the major strategies. Select what appeals to you, then go for the mentor that tolls this path.

Otherwise, you would always have conflicting views with your guide which will affect your trades.

Don't Follow Blindly

The sure way to know something works is when you have tried and tested it.

For example, all WSDT mentors have happy followers who have tried or used their materials.

The sure way to know if their strategies and techniques really work is when you get the feedback from people who have tried and tested it.

Accessibility

Most mentors are not accessible and it is understandable to a point because some of them have a large number of followers.

It doesn't matter how clear their tutorial might be, there would always be a question you wish they could shed light on.

That is why most WSDT mentors give access to their live trading rooms, watchlist and other platforms where they reach out directly to their followers.

Giving a lecture might not be enough as some technical stuff has to be demonstrated while questions are being answered.

The strong link between demonstration, observation, and practice are important structures every mentor must have in place.

Are WSDT mentors professional?

So, how did we select mentors for WSDT?

We chose some of the best day trading mentors from a broad scope of qualities. Some of them have vast experience, some have unique approaches, some of them are stars among their communities.

A conglomerate of these intrinsic values and different styles of mentorship gives WSDT competitors the best options to choose from

In WSDT, mentors or team leaders have live interactive sessions with their followers. This personal interaction creates the avenue for a mentor- mentoree bonding, which is very healthy for effective day trading skill development.

So, we recommend you to look at the profiles of each WSDT mentor, check out their social media and subscribe to the ones that you found suitable for you.

Check them out:

Stelios Stylianou
Jerremy Newsome
James Mason
Ali Biggz
Pablo Martinez Garcia

Big trade sizes vs profits, is it worth the risk?

“Big risk yields big rewards.”

This quote is one of the commonest statements you would hear in the financial world.

This saying might have emanated from investments with some form of guaranteed returns, which makes sense. Unfortunately, this statement is not always true for day trading in a broader perspective.

The Volatility Factor

Stocks have higher returns and volatility when compared to bonds. This fact creates the impression that the bigger you go in, the bigger you earn. But this might be completely different in reality.

A very important factor you must also consider is that day trading doesn’t involve absolute returns and volatility. On the importance scale, your trade size outweighs your entry and exit when day trading stocks.

Your strategy might be efficient, but a large trade size puts you in a risk zone. Taking large trading sizes can blow your trading account quickly. Your position size is determined by how many shares you take on a trade.

Risk vs Volatility

Risk is split into two aspects, namely: the risk associated with your account and the risk associated with your trade. These two aspects are very important in terms of choosing an appropriate trade size. The risk associated with your account and the risk associated with your trade both converge on the volatility of the stock you engage in.

Many experienced traders try to avoid volatile stocks because volatile stocks are not stable. They can switch in any direction at any time.

It is advisable to put three things in check: your stop loss level, the resulting position size, and your risk tolerance level.

If you consider trading volatile stocks as a bumpy road, then smaller position sizes on stable stocks would minimize your risks and raise your chance of making profits.

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The Correlation Between Trade Size, Slippage, and Volatility

In the World Series of Day Trading, most mentors advised day traders to take it slow and small, especially for beginners.

Some emphasized that small spreads on large trading sizes can ruin your trading account easily.

Timing the market, getting the right fundamentals and technical analysis would be strong signs you must look out for in case you want to go in for a big trade size no matter how volatile the stock is.

Larger position sizes can be difficult to exit and it causes slippage. Slippage is when you get a different price than what you expected from an entry or exit.

Slippage is one main factor you must duly consider with high volatility stocks. When stocks become volatile, traders go into impulsive trading, piling up many stocks to get a quick profit.

This form of trading might work sometimes, but it puts the trader at a far greater risk. Don’t just buy a lot of stocks because they are cheap or their prices fell. In as much as you see this as a great opportunity, also take into consideration the fact that not every stock rises after the prices fall.

Some stocks can take months and even years to bounce back. Small trade sizes spread across consistent performing stocks is your sure bet for good earnings.

Final Thoughts

Your risk and reward parameters are what set the boundaries for your trading size. You can decide to go in for smaller trade sizes with large-stop loss or take large positions with smaller stop loss as a way of managing risk.

One of your main goals must be patience! Like a lion hunting a prey, wait for the right chance where the stop is small, pounce on it, and the reward would be good if everything works right.

The correlation between high volatility and returns should not be the only fundamental determinant in going in for trade sizes. Every single trade would have different parameters to assess risks.

Pros and cons of news trading

News trading is a huge umbrella that encapsulates several trading strategies. It is the core ideology of many trading strategies used in day trading today.

What is news trading?

News trading is riding on news that causes waves on the financial market. News can drive price movements up or down and this sets up a trend.

On the other hand, a trend can be generated by several factors of which the most fundamental is news.

Is news trading popular among day traders?

News trading is one of the most common techniques used by day traders.

Everyone is in one way or the other affected by what is happening around us, especially the financial market. It informs the day trader or investor and leads him in a certain trade direction which causes a certain trend of price movements.

Every day trader uses the news to trade in one way or the other. It is mainly because news generates trends in price movement as we stated earlier.

It is, however, a bumpy road to base your trading solely on this trading technique because it doesn’t thrive on solid technical analysis.

Let’s take a look at the scenarios of when to use this technique and when not.

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Is trading new and trends a good choice?

News trading is not a stable technique. It fits best into situations where there is major news hitting the market. To paint a better picture of how this technique works, let us see some of the pros and cons of it.

Pros

Quite simple to use

Unless you want to use news trading with other indicators, it is one of the easiest forms of trading techniques. Most beginners in day trading prefer this technique because it doesn’t demand much technical knowledge in a broader sense.

You just need to be well informed with news or reports from authenticated or trusted sources.

Quick profits

Most day traders use this technique to make quick profits from the market. Traders try to get the best out of it before the tides subside.

For example, ROKU was a major buzzer in WSDT I. The report on the company’s earnings caused an upsurge in price movement and trends.

So, competitors milked a lot of good profits from it during the WSDT.

Versatility

News trading can be used in various spheres and areas of trading. It is not specifically limited to day trading.

News affects everything in the financial market, because of this, news trading can be used in different types of trading, stocks, and commodities.

The versatility makes it a top choice for many traders who trade on different markets.

Cons

High risk

News trading is a high-risk type of trading. This high risk emanates from the fact that trading on elements can take a twist anytime. Sometimes predictions can be wrong and things might go south. It is certainly not for the faint-hearted.

Unstable or unpredictable market

As we explained in our first point, the market can take a swing at any time, and prices may move in the opposite direction. The instability of this type of trading is what makes it high risk.

Seasonal

Your chances of earning better profit will dwindle in certain financial seasons (nonfarm payroll, earning season, etc.) when certain reports ‘shake’ the financial market.

Most traders see this technique as the kind that you pick out of your pocket when the season is right.

Final words

News trading is a good fit for short, quick earning type of trading but it comes with great risk.

Another important fact to consider is that it is seasonal, so it is not very profitable to use it when there is no major buzz in the financial market. It thrives on an authentic voice’s prediction or anticipation of a major event.

Traders usually combine it with different trading strategies in major competitions like the WSDT to be on a safer side.

If you are a beginner, it would be an attractive side for you, since it requires minimum technical knowledge and skills to use it. But it’s also advisable to calculate the risks and buttress it with trusted indicators.

Gap up/Gap Down Strategy for WSDT

Gap up/Gap down strategy is a widely used day trading strategy that consists of two major components.

Gap up occurs when the market opens up, which is at a price higher than the previous day’s closing. Gap down simply means when the market opens at a price lower than the previous stock.

When does Gap up/Gap down occur?

Gap up and gap down primarily occurs due to a news event that affects the price movements of stocks.

Usually, when there is a gap up, day traders tend to sell their stocks. This means the gap that was created previously as a result of the price difference would be filled.

On the other side, if there is a gap down, the gaps would be filled because day traders usually want to buy these stocks. Gap downs usually increase the demand for stocks.

Gap up/gap down, as I hinted above, is fundamentally driven by news or major events that buzzes the stock market.

Gap up is also know as a bullish gap while gap down is known as the bearish gap.

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There are various types of gaps in the gap up/gap down strategy.

The types of gaps

Breakaway gap

This type of gap occurs during the commencement of a trend. The price breaks away and creates an interval from the previous closing.

There is more efficiency in a breakaway gap when placed side by side with the previous trend.

Runaway gap

The runaway gap happens during the middle of a trend. This indicates that there is more room for trade on the stock market.

Identifying a runaway gap can be done by analyzing the overall trend in the markets. It is more effective if it coincides with a breakaway gap. It is further ascertained by an existing trend.

The runaway gap should give you a further indication that there is more room for prices to climb up.

Running gap

This type of gap is a route to the final step. At this point, there is a gap created after the establishment of the trend.

This is very important because it indicates the last run before prices begin to merge. It can also indicate a change in the trend. This does not fully indicate that the trend will reverse.

Pros and cons of using the Gap up/Gap down strategy

Pros

  1. Gap up and gap down is relatively simple and easy to use
  2. Fits well in stable market conditions
  3. It is a good strategy when used to during a major buzz on the financial market
  4. It allows traders to build an automated trading solution based on market conditions

Cons

  1. Gap up/Gap down strategy cannot be used in every market because some of them run for 24 hours
  2. It is blunt when your broker doesn’t provide you with a good fill of prices
  3. Only stocks with good volumes are reliable with this strategy

How was Gap up/Gap Down used in WSDT

The gap up/gap down strategy was widely used in the WSDT. It helped competitors to gain a good grip on the market.

The market was quite choppy during the period in which the WSDT I was hosted. Competitors needed to use a strategy that runs well on such terrains, and Gap up / Gap down was a good fit for most of them.

The WSDT offers traders a good platform to connect with other day traders with varying trading experiences. It gives day traders a golden ticket to a myriad of opportunities for day traders to sharpen their skills and be mentored by world-class trading professionals.

WRAP-UP INTERVIEW WITH TEAM LEADERS (PART 2)

WSDT I saw a stellar display of trading skills, a wind of assertiveness and competitive spiritedness

There was a tremendous emotional bubbling going on. While many were making good trades, others were blowing up their accounts.

The mentors rallied their teams and marshaled their best strategies to win the WSDT. We previously brought you a synopsis from the interviews with Stelios Stylianou and Jerremy Newsome.

In this article, we bring you part II of the interviews we had with the rest of our WSDT mentors — Ali Biggz, James Mason, and Pablo Martinez Garcia.

EMOTIONS AND PSYCHOLOGY

“Emotion is the most important part of trading and by doing a competition like this, and where essentially there are prizes on the line, gets people’s heart pumping in and out of the trade. I think it was amazing and great and I think a lot of people took it seriously.”

Ali Biggz

Ali Biggz accentuated the pivotal role of emotional and mental psychology in WSDT. He felt the prizes at stake stirred up emotional tensions which put many on edge in the competition. The ones who were able to quench or balance this emotional whirlpool made good headway in the end. 

On the other hand, Pablo projected the whole aspect of emotional and mental psychology from a different angle. He channeled it in a sense of collectivism and responsibility.

Even though both mentors took this subject from different angles, it still converges at the fact that emotion is one of the most important pillars in day trading, especially in such fierce competitions like WSDT.

TEAM

As for the teamwork, Ali described an actual feel of the boiler room to us. His team had the main goal of getting the team to the top. He thought the best part of the competition was that a single member’s success would affect the whole team.

He also highlighted the effectiveness of communication among the team members which helped them to discuss trades and devise new strategies and tactics every day.

Pablo expressed his gratitude to the team for their synergistic efforts. He added that their success in the competition stemmed from the live streams, that made members of the team follow through the trading sessions.

James Mason recounted how everyone in the team was looking out for each other in the market, how everybody was calling out tickers and supporting each other in diverse ways.

He was also impressed to see the altruistic atmosphere which came off naturally in such a competitive environment.

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ADVICE

Beginners are a very important focus group for all mentors. So the mentors geared special attention towards their growth in day trading and their performance in the competition as a whole.

Ali Biggz hammered on the relevance of taking small sizes as beginners in the competition and highlighted on the repercussion of taking large trade sizes.
He urged beginners to cut their losses quickly and let their winners run.

James Mason explained to beginner traders that one of the main drawbacks of taking small sizes was the toll it took on their emotions, especially when the odds were going against them. He felt that young traders couldn’t focus enough to even read charts clearly, which would result in far greater losses.

CHALLENGES

The effervescence of every competition always creates a challenging atmosphere. Some say it is like a furnace, which refines and brings out the raw pure gold in competitors.

Team leaders experience this heat the most because they need to lead their teams and leading people is not a simple task. Garnering a large size of traders from different backgrounds and varying trading experiences come with a lot of challenges. 

The mentors expressed how they tackled this burden and, surprisingly, split positions on the degree of challenges they felt.

Ali didn't feel much of the weight because he had a good setup to communicate with his team effectively. He added that he put up his watchlists on Discord which helped him to moderate the plans for the trading day. On his part, coordination was very good and effective and he had no regrets on how everything went. 

Pablo maximized the usage of his Youtube channel by streaming his trades live. He had an easy pass with coordinating the team because the majority of the team used to be with him during his live sessions.

James Mason found it a bit challenging trying to keep up with the influx of messages from multiple chat platforms because he was running one of the largest teams in WSDT I. 

PAPER TRADING vs REAL TRADING

“The whole psychological aspect of real money versus paper money is two different worlds of their own.\”

James Mason

One of the most important aspects of the competition we cannot overlook is how it feels like to trade a paper and a real account.

This is a major transitional factor that every beginner in WSDT deeply considers, as to whether they want to launch out into the deep or continue to enjoy the shallow waters.

Ali put the whole vasculature in a very profound way. He opined that trading with a paper account is pretty close to trading with a real account. He stated that a lot of the traders felt their heartbeats when they were in and out of the trade, even when they are trading with a paper account.

Pablo didn’t go off on a different tangent either and seemed to concur with what his colleague said. On his part, trading with a paper account gives you a simulative feel of how the real account works.

However, James Mason thought about this differently. According to him, there are always going to be fewer emotions involved while trading with a demo account. But when you put your real money on the line and if trades go against you, you will probably forget everything you have ever learned.

He claimed that it is important to build the foundation of paper trading and then slowly transition into trading with real money.

STRATEGY

“In our case, we implemented more aggressive strategies with a higher size. If we wanted to try to win the competition, it was necessary to risk more with our own accounts.”

Pablo Martinez Garcia

The right strategy for WSDT was the main factor that set the mentors apart. They used a variety of tactics and strategies and molded them in various forms to suit the moving market.

James Mason had to change his trading style for the competition. According to him, he took far more aggressive risks in the competition that how he would do with his real account.

Ali didn’t have a different opinion on this point. He also took heavy risks but made sure he resounded the idea of taking it slow and steady among his team. Ali was excited how this advice helped 3 guys on his team, who won prizes by steadily increasing their profits.

Pablo went on the same path too. He implemented more aggressive strategies with higher trade sizes. He said that if one wanted to win the competition, he had to take necessary risks.

Overall, it may be said that it is quite interesting how the mentors advised their team to take it slow and steady but took large trade sizes themselves.

Did they feel they could handle the large trade sizes because they are more experienced? That might have been an underlying factor.

10 myths about day trading

Day trading, since its inception has seen a lot of widespread myths and aspersions shot at it.

It is quite interesting that the vast majority of the people who cast these aspersions about day trading have never traded at all.

In this article, we will demystify day trading, debunk the aspersions and show you some clear-cut ways on how to go about it.

Here are some of the common myths we sampled:

Myth 1: Gambling

Many people have the false notion that day trading is a guessing game or some sheer luck kind of investment. This common notion stems from the fact that some traders have lost money.

What every day trader (especially beginners) must understand is that day trading is a serious investment and needs practice, attention, and education.

If you get these things in line then you would know how to make the right choice at the right time and reap form your investments.

Myth 2: “Get-rich-quick money” scheme

More than 90% of people who get into day trading have some form of unrealistic expectation. It is widely believed by these people that your bank account starts to overflow within a few days of trading or you just hit the jackpot with 3-4 days as soon as you start investing.

Well, that would surely be in a fool’s paradise. It is not a quick money kind of investment. It can surely pay off with patience, practice and some form of risk management.

Myth 3: You can just trade on news and make a fortune

Many beginners think day trading is very easy. This is because they have the perception that they would have to just know the news and be able to interpret it.

To an extent, this might work out, but this is a shallow way of going about day trading and a very risky path as well.

One cannot just rely on the news or financial events to make good trades. It is recommended to support it with very good indicators to make up strong trades.

Myth 4: Less skill or education is required

Many people jump onto the bandwagon of day trading because they think it is some sort of basic assumption work and you don’t need much understanding.

So, is trading for everyone?

Yes, sure! But like every form of investment that involves money, it needs some form of basic and fundamental education to be able to understand how your trading platform, indicators, and charts work.

Most platforms or brokers have educational packages for traders to sharpen their skills. It would be very prudent to follow live trades to see how it works before you launch out into the deep.

The strongest education would be your own experience. What worked for you and what did not. As a day trader, you must constantly develop your skills, restrategize and personalize what you learn from your mentors, tutorials, and books.

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Myth 5: Scam

There are many negative reviews on websites and forums about day trading and trading as a whole.

The most common of them all is that day trading is a scam. This comes from the fact that many people have lost a lot of money from careless trades. This bitter experience makes them believe that day trading is a rip-off.

Many people starting out day trading just jump into it without any preparation. The fact that they don’t build a solid foundation is a recipe for disaster.

Then this kind of unprepared day traders tend to shift blames and create untrue remarks about the whole day trading process.

This is not to say, that day trading is 100% profit making where you have no possibility of losing, but this doesn’t make it a scam either.

Trading and investment, in general, involve risks at every level and the well prepared are the ones who reap the best out of it.

Myth 6: Extremely high risk

As said already in previous points, in every type of investment, there is risk involved, and the issue of risk is a relative topic. The risk level in day trading can be assessed by experience, tools, and resources, as well as the kind of stock you trade.
It is strongly recommended to get a good education, training, some level of understanding and skills in reading both fundamental and technical analysis before you start.

As a beginner or someone starting out in day trading, it is recommended to take it slow and small, at least with that, you would be able to pull the brakes before you hit a ditch.

Another good way to curtail risks in trading is by drawing and shadowing from mentors.

Most mentors are experienced professionals who have been tried and tested. Learning from these mentors will make it easier.

You can draw from their years of experience, know what works and what doesn’t work, this doesn’t guarantee 100 percent immunity for risks but it does give you some form of a safety net.

Myth 7: Low volatility stocks are very are safe to trade

Many day traders lose money because of shallow assumptions like this one. Logically, it makes a strong point, but, in as much as low volatility stocks have some form of stability, it is not a sure way or guarantees to earn by trading. You have to back it up with strong fundamental and analytical skills.

Low volatility cannot stand on its own as a strong factor to determine your trade. It might be best classified as a good pointer as to which direction you must take in terms of choosing the right stock to trade.

Myth 8: The majority of traders end up in a loss

As we spoke about under risks, you need a good education, tools, and more practice to better your chances of earning. The majority of traders who lose trades mostly don’t put in much preparation.

This is not to generalize the fact that every trader loses trade because they didn’t prepare. Some might have prepared and still lose trades. But the latter group of traders is always likely to have a good come back after a red day.

This explanation can accurately disperse this myth, in fact, the probability of a trader losing trades is widely dependant on several factors. There is a balance, people lose trades, others win, it all depends on the trader.

Myth 9: The stock market is complex

This is a long-standing misconception, especially for beginners. Some of the technicalities and seemingly complex charts scare them off.

In general, there is nothing difficult about the stock market, trades and charts. It all depends on your readiness to learn and gather experience from mentors as well as educational tools.

In fact, many trading platforms have simplified these tools to make it easy for beginners to understand and utilize.

Myth 10: It should be full time

The majority of day traders are part-time, some also do it as their only profession. Setting this perspective as to whether to do it full or part-time would largely depend on your purpose and set target.

Looking at it from another angle other than the target factor, one thing that plays a major role is setting aside time for trading.

This will help you become conversant with not only how the tools and platforms works, but market technicalities and how the system moves.

Familiarizing, adjusting and adapting requires consistency. This consistency will come from the time you devote to better your day trading.

Setting a target and allocating time will dissolve this myth. You don’t necessarily need to go into it full time, your target, dedication and time allocation would be a determinant.

How not to be caught up in these myths:

How to choose the best stocks to trade in WSDT

The most significant part of day trading is knowing the right stock to choose. The right stock is the main target and fulcrum of every good day trading strategy. The amount of gains you’re going to get is directly proportional to the stock you choose.

In WSDT, many traders hit the jackpot with certain stocks. This gave them a winning edge. The strategies, analysis, and trading style all end up with the right stock.

Some competitors in WSDT I made huge losses, some even blew up their account because they picked the wrong stock. Their strategies seemed right, their style was getting on point and their indicators were pointing in a pseudo good direction but their choice of stock crashed everything.

WSDT II is rolling up, and we have put together some of the factors that helped WSDT I winners to choose the right stocks.

What is the right stock?

The right stock is the one that has the potential to earn you profits at a specific time and season on the financial market. Simply put, the right stock is a performing stock.

In light of this, you must also understand that not every tradable stock has this potential.

A stock performing well today might not be doing well in the next 2 weeks or even the next day.

How do you choose the right stock

No constant rule or formula controls the financial market. The market will always keep moving, stock prices will keep changing alongside different parameters, in different directions. This can be an overwhelming task, especially for beginners.

And this is why the issue of choosing the right stock is very crucial. You will need to continually learn, understand and upgrade your skills in this sphere.

Every experienced trader would agree that, in choosing the right stock, one needs to apply different trading strategies and techniques.

The malleability of your stock-choosing strategy and technique shows your level of experience in day trading.

In this article, we are going to show you the factors that most experienced day traders consider when choosing the right stocks.

Risk/Return ratio

Risk/return ratio (aka risk/reward) is a measure of how much an investor can potentially gain from every amount risked in investment.

Investors use this parameter to gauge the returns they expect from every trade they make and whether it is worth the investment.

So it is a comparison of how much you might lose (risk) to how much you might gain on investment.

For example, if an investment has a risk/return rate of 1:7, it implies that you are willing to risk $1 to gain $7.

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How to calculate Risk/Return ratio

Risk/return ratio = net profit (reward)/maximum risk , where a good risk/return is always > 1:3.

Now let’s see how we can apply this formula.

Let’s say a stock that hit a previous high of $35 is now selling at $31, but you bought those stocks at $6200 hoping it would hit a high again.

If that stock hits another high of let’s say, $36, it means you have a profit of $5*200.

Therefore you divide $1000 by $6,200 and that will be your risk/return ratio.

Liquidity

Liquidity is simply how easy you can sell an asset, a stock or a security on the market. That is, changing the value into real cash.

Liquidity talks about how fast a stock or any asset can be sold on the financial market at a price which connotes to its true value.

The liquidity of the stock indicates how fast the stock is selling and it’s demand as well. Basically, if a stock is in high demand it means it has a high liquidity rate or potential, it would, therefore, generate a price trend on the market which would create a certain movement.

Volatility

Volatility is a financial parameter that is used to calculate the dispersion of earnings on stocks.

Volatility can also be referred to as swings in different directions on the stock market, therefore volatility can be simplified as the level of ease at which you can predict the price of a stock.

It might be safe to say volatility is relative to the price stability of the stock. Most day traders consider volatile stocks as very risky.

For them, the higher the volatility, the higher the risk. The trading style or philosophy of the trader will determine whether these stocks are a good fit.

Trend

The trend is simply the movement of the stock. Trend is affected by volatility, liquidity as well as certain financial reports and news.

Most WSDT I competitors capitalized big on some trending stock, which we will discuss later in this article. Trend is one major factor you cannot overlook in day trading in general.

News is one of the fundamental factors that generate a trend. It is however suggested to go in for stocks that trend consistently with a longer time frame, this gives the trader a picture of how susceptible the stock is.

Consistency in trending is one of the most important factors if you want to select the right stock, connoting to the fact that some trending stocks usually turn out to be a 9-day wonder.

Indicators and Signals

Indicators are like road signs in day trading. It is the compass of every good strategy which leads you to the right stock. Indicators can be harvested from a whole pool of factors, such as technical and fundamental charts, trends and market systems.

You would have to keenly observe the signals generated by the indicators on the stock market, stringent observation is required because some stocks often set off false signals and whipsaws.

In WSDT I, a number of competitors obtained their indicators from charts, whiles others followed the ones their team leaders cooked up for them. This is one important decision you have to highlight if you want to have a good advantage in WSDT.

Strategy

Certain stocks fit well with certain strategies. This is due to many factors. For example, if a stock is trending on a certain report, season or major financial announcement, then you might as well look for a strategy that connects with this purpose.

Winners displayed some amazing strategies, and it was a no brainer that they won this competition. As we explained above, the core purpose of a strategy is to wield the potential of the right stock to bring you earnings.

We took our time to compile and expatiate some of the magic formulas that gave WSDT winners the victory ride. Be sure to check these articles on the different types of strategies used in WSDT here.

Stocks in WSDT I Hall of Fame

ROKU

It is no surprise that this was one of the most traded stocks in WSDT I. During the period in which the WSDT, was hosted, ROKU was making a buzz on the stock market.

Waves of it’s increasing sales and swamps of online streamers were spreading fast
Most WSDT I competitors took advantage of it and boom! They hit the gold!

What main lesson do we derive here? News! News! News!
News and reports influence strategies and the whole decision machinery in choosing the right stock.

OSKT

Like ROKU, OSKT was making huge waves on the stock market at the time WSDT I was hosted. Most of the competitors took advantage of it and made substantial gains.

These two above mentioned doesn’t end the list. There were other commonly traded stocks in WSDT I like oil and gas and gold stocks from DRIP & JNUG. The likes of SAP, ACN, ROKU, SQ, BB also raked in good profits for other winners as well

Final words

Your stock selection is one of the main things that will set you apart in WSDT II. It is an area you must deeply consider important and a place you must hit hard to sharpen your skills.

In football, a player can dribble, do all the fantastic skills and kicks, but at the end of the day, the final score is what determines the winner. It’s the same analogy in WSDT. Your strategy, skills, and resources must help you bring in good profits.

And what is the main way to bring in good profits? The right stock!

Day trading morning gaps

Day trading morning gaps is one of the most common strategies used by many day traders. It is utilized by many day traders to reap good profits. It is fundamentally based on the results of the successive trading activities that happened overnight spanning from new events to earnings and certain economic reports.

As we explained in our previous article about gap and go trading strategy, gaps are created when the current opening prices move higher than the previous day closing price.

Day trading morning gaps thrives on indicated the high volatility and higher liquidity rate stock.

How is day trading morning gaps done?

The morning gap strategy is subdivided into two:

  1. Full/pullback gap
  2. Gap fill

Full gap

A full gap in morning gap trading occurs when the price doesn’t go above its previous day’s close. A full can also occur when we find the open price of the stock outside the price range of the previous.

However a gap higher is when the open price is more than that of the previous day, and we have a full gap lower when the open price is less or below the low of the previous day.

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Gap fill

We have a gap fill when a gap is created at the opening but during the trading day, it overlaps the close of the previous day at a point. Most gaps don’t get filled at some specific times of the day.

It is important to note that, if stock gaps extremely, it can relatively take a long time before the gaps are filled, a couple of days or even weeks. In morning gap trading, this is called breakaway gaps

Different techniques in day trading morning gaps

The First Candlestick

You can determine how weak or strong a stock is by the initial 5-minute bar. Many day trading morning gaps beginners, usually buy at the break out at this point or make a call during the few opening minutes at the open. This technique in the morning gap trading strategy is like walking on thin ice. It can fail you at any point because the market doesn’t always conform to what we think it should.

It is advisable to always lay on the wait, keep your target and go in when the market settles. You can decide to go in by getting the first candlestick after the gap. This opens up another task on where to place the stop, at this point, you may put it below the low of the candlestick and that works sometimes.

Clean Сandlesticks

This one of the most frequently used morning gap trading techniques. When the stock gaps up, you might wait to see the consolidation near the high of the stock. You should see this consolidation within four to eight bars.

In this morning gap trading technique, important to check that the stock doesn’t go back much on the gap up the candlestick. You might also want to watch the stock if it keeps its position above the 10-period exponential moving average, this will indicate that the stock is still moving at a good and fast pace. The clean candlestick is the way to go!

You can then wait for the stock to go for the high of the day, not less than half past 10 in the morning.

Make a move after the gap fills

This morning gap trading strategy dwells on the fundamentals of stocks filling the gap after pulling back to its prior days close. You would have to monitor to see some levels of strength, then you go in for that position. You can then go ahead and place a stop below the candlestick.

The challenging part of day trading morning gaps might be the price target because the pullbacks are often higher than the high or low of the morning by a wide interval. Most experts in the morning gap trading go for the kill by buying the pullback and reselling the high of the morning.

Is day trading morning gaps a popular strategy?

Day trading morning gaps is a good and fun-to-use strategy, but it requires some good analytical eyes to complement it.

Morning gap trading is very common amongst many day traders. Basically day traders who use morning gap trading strategies strongly draw their analysis and gains from volatility caused by price movements as well as the liquidity of the stock.

Higher liquidity and high volatility is a good catch for morning gap day trading.

Another reason why morning gap trading is quite popular because certain financial news, earnings, and reports have an effect on it, which makes it a good choice for traders who want to go that way of trading.

Is day trading morning gaps a good strategy for WSDT?

A number of mentors in the WSDT used the morning gap trading strategy. This choice was based on various reasons, the prime of them was, it had a good analytical picture of which stocks were going hard in terms of price movement and which ones were falling. It gave them a whole picture of which stocks would make profits in specific trading seasons.

Moreover, morning gap trading is seen by most of the mentors as a good fit for quick earning considering the brisk nature of the competition.

Jeremy Newsome made more solid remarks on this point by saying:

“Good range equals a great opportunity for you to make money. This is because major support and resistance areas have been broken, or will be broken and previous gaps will be looking to get filled.”

Final thoughts

Morning gap trading is a decent earner with a strong analytical base. If you have good eyes for the charts and predict market movements well, then this would be one of the best picks for you.

However, you must also understand that day trading morning gaps need some waves or buzz on the market to thrive because this affects price movements which in turn creates gaps.

9 Scariest Mistakes to Avoid in WSDT

In WSDT I, most competitors made common mistakes which cost them their position and chances of winning the competition.

In this article, we will talk about 9 scariest mistakes that you can make and how to avoid them.

1. Over Trading /Anxiety Trading

The WSDT has a loss limit to the paper account given (which we will discuss later). Sometimes, when day traders lose on a large position sizes or when they are in their red days, it may seem that everything is going against them.

When the palms are sweaty and the heart is beating faster, traders are prone to making trades driven by their emotions.

Naturally, everyone would like to recover quickly from a major loss, right? And that is where the temptation comes in.

Traders at this point try to force their trades even when there is a lack of good pointers to make up for the loss.

Traders blow their accounts at this point because their minds become clouded and usually go against the direction that the charts or indicators are pointing to.

Experienced traders advice that, the impulsive moment is the period to re strategize and take it slow. No matter the trading storm always stick to your strategy, it is your sure anchor (Read more on our article: The right mental and emotional psychology)

2. Rigid Strategy

Market trends are the fundamentals of most day trading strategies. Every trade you would make in one way or the other would be affected or connected to trends.

News births trends in day trading. If the US announces a spike in employment rate, you would expect that many people would go in for some stocks or make trades that are in connection with this announcement or news. This is how news and trends are connected.

Not adjusting your trading style to moving trends is a grave mistake most traders made in WSDT I.

In as much as there is a section of traders who trade against a trend, it is prudent to always adapt and adjust your day trading strategies to the current market trends which has a connection with the news.

Market trends are like waves, you just need to wait for the right one and get on it with your surfing board which in this case is your day trading strategy.

Stelios (the team leader of the best team, number 1) spoke about how he adapted to the market trends with varying day trading strategies and ideas.

It’s the same way, you cannot wear a T-shirt in winter and can not try wearing a heavy winter jacket under the scorching summer sun.

That is how day trading goes, your strategies must be malleable.

3. Large Trade Sizes

Making trades of large position sizes can be very detrimental to day traders in WSDT. In as much, it has a lower probability of working for many people, it caused the downfall of many traders in the competition.

The trading account for the competition has a loss limit as I said earlier on and most participants were disqualified from the competition because they blew their account.

Many of them blew their accounts due to large trading sizes.

One of the underlying advice given by most mentors of the competition was to avoid taking large trade sizes. You must carefully calculate the risks and know which trade size you want to make.

4. Picking The Wrong Stock

The type of stock you trade is a great determiner in WSDT. Most competitors had an upper hand in the competition because of certain stocks they picked. Eg. Roku was a big hit for many day traders in WSDT I.

So, this boils down to the question, how do you choose the right stock?

It is apparent that the right stock is the one that is selling or moving fast.

It is not necessarily what is trending but other factors such as volatility, liquidity, multiplier, and indicators come into play.

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5. Lack of Team Play

Most WSDT competitors benefited immensely from the coaching of the mentors. Others might have been able to make headway without active team playing, but many fell on the axe because they didn’t have thorough guidance.

Following or shadowing a team leader or a mentor in WSDT increases your success rate because mentors put up their pre-market lists, solid watch list and indicators, as well as the live chat rooms, which gives you a good push in the competition.

It is better to follow strategies that have been tried and tested before deducing your own. This will save you from the consequences of ‘trial and error’ in this competition.

What’s more? Playing a part of a team gives you the chance to interact, ask and draw from various strategies that will fit into a broad terrain of day trading in this competition.

6. Lack Of Balance

Some competitors traded their live accounts while in the competition because of various reasons, primarily because they needed to pay their bills.

This path is however not for the faint because it requires intense concentration and some form of discipline.

This lack of balance is what made many to fall out of the competition. There would be no strings holding you back from trading your live account while in the competition but you must consider the extra weight it will put on your shoulders.
Stay focused and win.

7. Wrong Trading Hours

This is one of the basic concepts of day trading. All-day traders must keep this at the back of their minds. Trading time is very crucial in day trading and as far as the WSDT is concerned.

Most traders find it more profitable to start their trades during the first hours when the market opens. Others also make their trades, at least, the last 1-2 hours before the market closes.

This choice of trading hours has various reasons attached to it. Many experts have it that, those specific trading hours go with specific types of strategies and trends.

This is widely true since it benefited most of the participants in WSDT.

8. No Trading Plan

A plan must always go with a strategy. In fact, the core part of the strategy is the plan it will fit in.

Most traders usually draw out a scheme and that is what made them successful in the WSDT.

The ones that failed were largely due to lack of proper planning, even though some of them had good strategies, how and when to implement them was the main struggle.

It is like firing your weapon without a target. It will lack power and sharpness. The lack of a proper blueprint on trades gave many traders away, and it drew a big stain of inconsistencies and inefficiency.

9. Lack Of Practice

Definitely perfection comes with practice. Many mentors in WSDT reported that some competitors did not take the competition seriously, owing to their failures.

The lack of practice showed up in their trading and it was evident that they wouldn’t last before their next breathe, and the prophecy came to pass.

The main differentiator is practice, that is what draws the strata between a potential winner and a loser.

You eventually become good at something you do over and over again. The WSDT gives you that opportunity to keep trying till you become a better day trader.

Now you have illumination on your path in WSDT, take advantage of the lessons learned from the mistakes that made many to fall in this competition and let it be a springboard to your success.

Gap and Go Strategy for WSDT

Gap up/Gap down strategy is a widely used day trading strategy that consists of two major components.

Gap up occurs when the market opens up, which is at a price higher than the previous day’s closing. Gap down simply means when the market opens at a price lower than the previous stock.

When does Gap up/Gap down occur?

Gap up and gap down primarily occurs due to a news event that affects the price movements of stocks.

Usually, when there is a gap up, day traders tend to sell their stocks. This means the gap that was created previously as a result of the price difference would be filled.

On the other side, if there is a gap down, the gaps would be filled because day traders usually want to buy these stocks. Gap downs usually increase the demand for stocks.

Gap up/gap down, as I hinted above, is fundamentally driven by news or major events that buzzes the stock market.

Gap up is also know as a bullish gap while gap down is known as the bearish gap.

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There are various types of gaps in the gap up/gap down strategy.

The types of gaps

Breakaway gap

This type of gap occurs during the commencement of a trend. The price breaks away and creates an interval from the previous closing.

There is more efficiency in a breakaway gap when placed side by side with the previous trend.

Runaway gap

The runaway gap happens during the middle of a trend. This indicates that there is more room for trade on the stock market.

Identifying a runaway gap can be done by analyzing the overall trend in the markets. It is more effective if it coincides with a breakaway gap. It is further ascertained by an existing trend.

The runaway gap should give you a further indication that there is more room for prices to climb up.

Running gap

This type of gap is a route to the final step. At this point, there is a gap created after the establishment of the trend.

This is very important because it indicates the last run before prices begin to merge. It can also indicate a change in the trend. This does not fully indicate that the trend will reverse.

Pros and cons of using the Gap up/Gap down strategy

Pros

  1. Gap up and gap down is relatively simple and easy to use
  2. Fits well in stable market conditions
  3. It is a good strategy when used to during a major buzz on the financial market
  4. It allows traders to build an automated trading solution based on market conditions

Cons

  1. ap up/Gap down strategy cannot be used in every market because some of them run for 24 hours
  2. It is blunt when your broker doesn’t provide you with a good fill of prices
  3. Only stocks with good volumes are reliable with this strategy

How was Gap up/Gap Down used in WSDT

The gap up/gap down strategy was widely used in the WSDT. It helped competitors to gain a good grip on the market.

The market was quite choppy during the period in which the WSDT I was hosted. Competitors needed to use a strategy that runs well on such terrains, and Gap up / Gap down was a good fit for most of them.

The WSDT offers traders a good platform to connect with other day traders with varying trading experiences. It gives day traders a golden ticket to a myriad of opportunities for day traders to sharpen their skills and be mentored by world-class trading professionals.