After looking at day trading as an alternative to starting a new business, I concluded after significant analysis that it was worth giving it a try. On the advice of a risk averse and smart engineering friend I joined the InTheMoneyStocks Live Day Trading service.
After 6 months of waking up at 5:30AM Pacific time to day trade, here are my tips and takeaways to maximizing profits in a super fast paced day trade environment where lightning quick execution and anticipation is essential.
Most trades happen between 9:30AM to 11:00 AM EST
After 6 months of being in the live day trading room everyday, more than 80% of trades happen first thing in the morning.
Gareth Soloway runs the morning day trade chat room, while Nick Santiago runs the afternoon session.
Takeaway: If you live on the West Coast, you have half a day left to do other things.
You can do other tasks / activities after 11AM EST
Since most trades are done by 11:00AM EST and since I’m based on the west coast, I’m done trading by 9AM, usually earlier.
For the first few months, I still stayed on the computer for the afternoon session with Nick Santiago and just listened to him talk people out of risky swing positions, learning his methodologies and hoping he see’s a good level on day trade.
The last few months, I still have Nick Santiago in the background while I work on other projects or just take it off to have a long lunch with the wife.
Be at peace when a trade you exited at a profit kept pumping
When first day trading with real money, I put lots of pressure on myself to earn a certain amount of money per week. This is #1 amateur move and will result in getting rekt.
When you exit a trade that profited $1 per share or a 1% profit margin, be grateful and happy. Do not FOMO that you could have made $2 per share or 2% profit margin if you had held on a few more minutes or hours.
Full position size can sometimes become more than full position size
Full Position sizes with Gareth Soloway
Many times when I first started day trading, I was keen when prices of a stock we longed kept going down, as that meant we would leg in, 2/6th, then 3/6th, and sometimes we would go a full 6/6th of a position.
The profits from a full 6/6 is quite significant!
However, do be aware that a trade could go against you and there have been times where Gareth has exceeded a full 6 of 6 position size and has done a 9/6th position to lower the average entry price.
Full Position sizes with Nick Santiago
I used to think Nick only does full position sizes.
But recently, I’ve seen him add more.
Takeaway: Be ready to go over a full position size when entering a day trade.
Day trades sometimes turn into swing trades
In those rare times when you go full position size or more than a full position size on a day trade, Gareth may keep this day trade over night or even turn it into a swing.
I was quite surprised to learn Gareth had a multiple day trades that turned into a swing from many months before I joined the service.
Nick does not keep his positions over night. He will exit at a loss rather than keep it over night or turn it into a swing.
Takeaway: Make sure when entering a day trade with Gareth, that you are prepared to keep a day trade with a full position or more, overnight or even for a few months. Another reason not to use your entire portfolio when trading.
Paper trade for at least 2-3 weeks
Do not use real money your first few weeks of joining.
You will learn how the trading room works, the flow and how fast things happen.
You will figure out how to best calculate the number of shares to long or short, based on how much of your portfolio you want to risk and the starting position size.
Find Youtube clips on day trade layouts for your trading platform
Watch a bunch of different youtube clips of people showing you their day trade layouts on the trading platform you use (Thinkorswim, Interactive Brokers, etc)
While you paper trade, you will start figuring out which layouts are best for the number of monitors you have, so you can be ready to be in 3 or more active day trades at the same time.
What is a pierce of a level?
Gareth often will say he’s interested in a stock for a day trade at a “pierce” of $X.XX.
He won’t say the exact number but usually it’s within 5 -10 cents below a long level or within 5 – 10 cents above a short level.
Market Order vs Limit Order
Both Gareth and Nick only do limit orders.
When Gareth says he will enter a long position on a pierce of $30.00 for example, you can then set a limit order of $29.95. Sometimes the stock will get down to $29.96 and then bounce. Sometimes, it will keep going down and you’ll hear Gareth say “Alright, I’m in at $29.76”.
If the stock has a tight spread, I’ll usually market buy when I hear Gareth say he’s in a position.
If the stock as a wider spread, then I’ll just put a limit order and be at peace with not getting in at the same price as Gareth.
Know your take profit target
Gareth and Nick will guide you with a reasonable take profit target based on their own average entry prices.
Though if you enter a trade that they didn’t filled on, or you were far from their entries, you should know your take profit target. Very often it’s between $0.50 to $1.00 of your average price. This is easy to calculate if you only had one position, but if have multiple positions, your average price will change. Most trading platforms should calculate your average price for you.
Tools and Workspace Setups
Here are the setups and tools I use to ensure I can get as close to Gareth Soloway and Nick Santiago’s entry and exit prices.
Think Or Swim with real time data
I use thinkorswim as my trading platform as I found it the easiest to use, via a custom Active Trader layout.
There are plenty of youtube tutorial videos on how to setup and customize an Active Trader Layout. Be sure to increase the allowed Memory Usage when starting TOS.
This layout is what I found works best for my monitor size and the way InTheMoneyStocks’ day trade flows.
I have 2 monitors and an iPad on my desk.
My main monitor positioned directly in front of me is a curved 32″ Samsung monitor, which I have thinkorswim setup on.
I also have a 24″ Dell monitor that I’ve setup in portrait mode to the right of my main monitor. This monitor is mainly used to display the InTheMoneyStocks GoToMeeting window. Gareth and Nick share their screens via GoToMeeting and it’s great to glance over to see what they are teaching or showing in terms of price levels, patterns, etc.
The iPad on my left is used to display the Trading View app, which usually shows the chart of whatever stock I’m in on a day trade, the DXY 10 min chart or the BTCUSD 10 min chart.
An app I like to use is Trading View, which is also what Gareth uses to draw trend lines, channels, and quickly see indicators like Fibs and Moving Averages.
I like to write notes down, draw trend lines and channels on my own and see if there is confluence with what Gareth and Nick show as well.
I bought additional indicators from Trading Alpha, though I’m not sure I will renew when my year long subscription expires.
Must Have Spreadsheet Needed For Day Trading
I recently noticed lots of new members in the day trade chat room, so I decided to give access to Google Sheets spreadsheet I use to quickly solve for a number of calculations needed to ensure maximum profitability. This spreadsheet has evolved over the many months and is dialed in for the purposes of day trading with ITMS.
In a recent trade we did on a META long, Gareth came online to the GoToMeeting webinar shortly before the opening bell. Once the markets opened, he said we are quickly approaching a price level for META, then shortly after mentioning, he said he was already in a long. Having a spreadsheet open and ready to calculate your position size and the number of shares at the price level is essential.
Below are the main features and calculations needed to be successful day trading with ITMS. The main goal is to have a place where you can immediately see how many shares you need (position size) based on what you want to risk for your first entry position, what it will be for your next entry, etc. These are crucial for you to be able to execute a precise trade at lightning speed.
Position Size Based On How Much You Want To Risk
This is the most important calculation.
After deciding how much of your portfolio you want to risk, you then need to calculate what 1/6th of that equates to.
Number of Shares To Long / Short Based On Price Level
When looking and scanning for stocks, there could be multiple stocks that could have levels good for a day trade long or short.
Not only do you need a place to record all those key levels, but to also know how many shares needed for that trade.
Very often, a price level will start to appear and you only have seconds to figure out how many shares you should be using. Based on the volatility, you may need to get into a second, third or more position quickly after.
Average Entry Price and Your Take Profit Target
Often times, you will enter a trade with an initial 1/6th position, then leg in as price moves in the opposite direction.
As your average entry price changes based on the number of positions you enter, so does your take profit target.
Knowing what your average entry price will allow you to know what your target take profit price should be.
Track your trades accurately to get a precise picture on how much of your portfolio is currently in a trade, your percent profit/loss including commission fees and your overall profit / loss across all your trades.
I found many trading platforms do not calculate this for you, or do not make it easy to quickly see the performance of each individual trade. Many trading platforms give you a YTD performance of a stock you traded. Since we trade the same stock multiple times per year, you can only see your overall performance.
If you need an easier way to maximize your day trade profits, check out the spreadsheet I developed and optimized. It can be used for any day trade workflow or service regardless of portfolio size or trade frequency.
Be Ready For That Trade
And Get More Profits
Download the ITMS Day Trade Trade Tool