Guide to Day Trading Strategies

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Professional day traders seek out brokers that offer commissions of $4.95 per trade or less, and 
provide direct access routing. At Warrior Trading, we have close relationships with several brokers 
that cater to day traders. These brokers offer our students discounted commissions of $2.00 per 
trade for direct access routing. Direct access routing means you can choose which ECN route you 
will send your orders through. This gives you more control over your trading results. It is also 
important to highlight the fact that you can possess all the textbook knowledge and emotional 
conditioning to be a great trader, but lack the proper tools.
Order Types (Limit, Market, Stops)
There are several different order types available to traders. The most popular are Market Orders, 
Limit Orders and Stop Orders. We will review these order types and discuss the techniques I use 
while day trading.
A market order requires two pieces of information. The stock you want to buy, and the number 
of shares you want to buy. You provide that information, press the buy button, and your broker 
will get you the shares and process the order. The risk with a market order, is, that you have 
not stipulated a price. In volatile markets, sending a market order can result in a high degree of 
slippage (the difference in price you thought you would pay versus the price you actually paid). 
A market order will give you shares at the current market price at the moment your order is 
processed. Market orders may be suitable for part-time traders that are taking small positions 
with the intention of holding for several days, weeks or months. However, for day traders 
navigating fast moving markets, they carry an unacceptable level of risk.
A limit order, in contrast to a market order, requires three pieces of information. The stock you 
want to buy, the number of shares you want to buy, and the maximum price you are willing to 
pay. Limit orders, once sent, will give you as many shares as possible within the price you have 
set. Sometimes the order will come back partially 
À
lled, because the price of the stock moved 
up too quickly. Most times, however, you will get the full order at the current market price. I use 
limit orders for all my trades. To ensure that I get 
À
lled with my full position, I use what is called 
an offset. If I want to buy a stock at $5.00, I use a limit order of $5.05. The 5 cent offset means 
the broker can try to 
À
nd me shares up to $5.05, but no higher. I use limit orders with a 5 cent 
offset whenever I’m entering or exiting trades.
The third order type is called a Stop Order. A stop order requires three pieces of information. 
The stock you want to sell, the number of shares you want to sell at, and the trigger price that 
should execute the order. A stop order is an order you place that will sit as an active and pending 
order until a trigger price is hit. If you are holding a position of 1,000 shares, and the current 
price is $5.10, you could set a stop order of $4.99. When the price crosses $4.99, your order will 
automatically get sent, selling your shares. There are two types of stops, Market Stops and Limit 
Stops. A market stop will send the order as a market order, while stops limits send the order 
as a limit order. Stop orders can be used to exit long or short positions, or they can be used to 
initiate new positions. A buy stop is an order you set to buy shares of a stock when the price 
crosses a certain level. Many traders will set buy stop orders at a critical breakout spot, so they 

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