Guide to Day Trading Strategies

Step 1 in a Simulated Account - Month One
During your 
À
rst month, you will be trading in a simulated environment. You will risk $50 per 
trade, with a max position size of 100 shares on stocks above $20, and a max position size of 
200 shares on stocks below $20. You will take 10 trade each day with a goal of 50% success rate. 
Using a 2:1 pro
À
t loss ratio, we expect your winners will be $500 in total (5 trades x $100 pro
À
t 
per trade) and your losers will be $250 in total (5 trades x $50 loss per trade). This will leave you 
with a net pro
À
t of $250 per day. As a new trader, we do not expect you to achieve a full 2:1 
pro
À
t loss ratio, and you may not even achieve 50% success in your 
À
rst month. We want to be 
realistic and set your daily pro
À
t target at just $150 per day. This allows for mistakes and accounts 
for the possibility of small winners, while you test out the success of various strategies.

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With a max loss of $50 per trade, you also must follow a daily max loss of $150. That means if 
you hit your full max loss on three trades in a row, you will have to shut down the platform for 
the day. This is an extremely important risk management technique. After we have hit our max 
loss, there is a high likelihood that our trading will become emotionally impaired. This is true 
even for me. I still follow a max loss, where I walk away at the end of the day. During your 
À
rst 
month, we expect you will hit your $150 daily target four days out of the week, and one day 
you will hit your max loss. That means your weekly goal is your daily goal, multiplied by three, 
or $450 per week. These daily and weekly targets do not take into account commissions, since 
you are trading in a simulated environment.
By the end of your 
À
rst month of trading, you have to review the statistics of your trading. It will 
be important to note your percentage of success overall, per strategy, by time of day and by price 
range. It will also be important to note your pro
À
t loss ratios. If you have been able to trade an 
average of 10 trades per day, you will have about 200 trades that you can analyze.
Success in your 
À
rst month is de
À
ned not by total pro
À
ts, but by your pro
À
t loss ratio and your 
percentage of success. The big question is, are your current statistics sustainable? Have you 
succeeded in capping losses at not more than $50 per trade? The most common struggles 
among our students in the 
À
rst month is, a poor percentage of success. As long as you have a 
good pro
À
t loss ratio, we can work on improving your accuracy as you gain experience and learn 
to identify better setups. If you have successfully completed Step 1, you are ready to graduate 
to the next level. If not, you have to continue on the 
À
rst month’s trading plan, until you achieve 
better results. Students in our live trading courses meet with us twice a week to review their 
progress, discuss concerns and set goals for the upcoming trading sessions.