Guide to Day Trading Strategies

Image of Reversal Scanner by Trade-Ideas.

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R O S S C A M E R O N
110
Reversal Scanner Settings.
Reversal Scanners
I write a stock scanner to look for a speci
À
c type of setup. That means I need to dissect the 
setup and understand all of its features that make it unique. For reversal trades, I set a minimum 
volume 
À
lter of 500,000 shares, a price 
À
lter of $15-250, and a consecutive candle 
À
lter of at least 
4 (consecutive trending candles). I know the best reversal trades have these characteristics in 
common. I then begin adding settings for RSI (Relative Strength Index), position within bollinger 
bands and percentage of change today. After 
À
ne tuning the settings, the end result is a scanner 
that shows me stocks at any given time of the day, that match my exact entry conditions for a 
reversal trade.

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111
CHAPTER 11
THREE STEP DAY TRADING PLAN
In our live trading courses, we put our students on a three step trading plan, and meet with 
them twice a week to review their progress. It is extremely important that students trade in a 
simulated and closely monitored environment during their 
À
rst months of trading. We want to 
see the mistakes our students are making, so we can quickly address and correct bad habits. All 
students make mistakes learning to trade. That is part of the learning process. We have students 
trading in a simulated environment, so their inevitable losses and beginner mistakes do not come 
with a price tag attached. During the 
À
rst few months of trading, some students will also realize 
that the level of risk involved in day trading is not suitable for them. We encourage an honest 
re
Á
ection of your experience as a trader. Day trading can be stressful, and dealing with 
À
nancial 
loss on a nearly daily basis is not for everyone.
The ability to day trade as your primary source of income, is not a skill that is learned overnight. 
It takes thousands of hours of practice, training and studying. Like almost any other profession, 
mastery comes with time. The challenge for many students is, that they make mistakes in their 
À
rst few months of trading, blow up their accounts and give up before they ever really had a 
chance to succeed. The failure to manage risk and the tendency to live trade unproven strategies 
generally results in career ending blow ups. We want to prevent our students from having that 
painful experience. It will be rare to 
À
nd a professional trader who does not have a horror story 
of big losses and big mistakes, we all have them. The difference between traders that give up and 
those that keep on 
À
ghting through, is often a matter of 
À
nancial resources. Our goal is for you to 
trade in a simulated environment, until you have proven you can be pro
À
table. By the end of our 
three step trading plan, you will have re
À
ned your strategies and developed a sense of emotional 
composure that will allow you to trade through the ups and downs, without losing focus.
It is important to set realistic expectations before you start your trading plan. Expect that in your 
À
rst six months, you are unlikely to produce substantial pro
À
ts. Instead, you are taking the steps 
necessary to build a foundation for your future growth as a trader. Many traders will try to skip 
steps and end up making costly mistakes that will jeopardize their ability to continue trading. 
Remember, that every single trade you take will give you a little bit more experience and a better 
understanding of the market. For that reason, the longer you are able to survive in the market 
breaking even, or just treading water with small pro
À
ts, the greater your odds for success. You 
have to survive until your thrive.