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Diaries of a Day Trader Diaries of a Day Trader

03-16-2022 , 09:11 AM
I thought I start a blog on my adventures as a day trader as I start this new journey.

What Is a Day Trader?
A day trader is a type of trader who executes a relatively large volume of short and long trades to capitalize on intraday market price action. The goal is to profit from very short-term price movements. Day traders can also use leverage to amplify returns, which can also amplify losses.

Who am I?
I'm a computer science graduate of 1990 who works as a cybersecurity contractor at the moment. I transitioned into the cybersecurity field around the year 2000.
I was and/or is successful at profiting from horse racing betting, sports betting, poker, buy and hold stocks over multiple days.

I will talk about my past first, get to the present and start posting about my day trades as they happen.
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03-16-2022 , 10:00 AM
The Past
I grew up poor as an offspring of immigrant parents. My dad immigrated to Canada so that he could send his 3 sons to university, get educated and have good careers. The country my dad came from, only 1 offspring could go to university.

I have fond memories of growing up as a child in Canada. I actually liked school. Was good at math so decided to get a comp sci degree. I liked university too but I by my 4th year of university I was ready to start working. Reflecting back, I knew my drive to succeed was a result of being poor and what my parents went thru.

I had several job offers before graduation and accepted a job in IT for a telco. I started to get into horse racing handicapping. It took me about 10 years, on and off, to become profitable. Eventually, I stopped cause the exchanges that offered the bets were no longer servicing Canadians. I got into MLB baseball betting which was successful but liquidity isn't there for you to bet higher than $2-3K. I played poker from 2008 to 2012, making about $50/hr online muti-tabling 6max No Limit Holdem. Poker dried up too. I was able to get a package from my company in 2012 and decided to go into contract work. The lump sum payouts were deposited into a trading account. I started to do contracts and they pay were over $100/hr on the contracts as of a few years ago.

In 20016, I made a big trade play, buying 21k shares of Canopy for $9 avg cost. There was a 95% chance of Canada legalizing weed. I thought Canopy could go to $32 if legalized. Weed did get legalized and analyzing on when to sell my stocks, I came to the conclusion to sell my stocks on Oct 17, 2018 which was the day before legalization, Oct 18, 2018. I sold all 21k shared for $69 on Oct 17, 2018. Netted a 7 fig profit. I had pho soup that day, lol. I think all that hard work my entire life finally paid off. Probably, one of the most emotional days in my life. I did not purchase anything like a sports car. I think I just paid for pho soup. I did not trade or do anything stupid for a month till my emotions came back down to being normal.

So, that one trade changed my life financially. That one home run changed my life financially. Goals also changed now. My goals is to not lose money going forward.
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03-16-2022 , 10:28 AM
2020 COVID and the Stock Market
Once covid hit and stimulus paychecks were paid out, there was a huge influx of new traders in the stock markets. The market was very good for day traders from 2020 to 2021. Unfortunately, I was working many hours in my fulltime job as a cybersecurity contractor to do any day trades during that time. I studied technical analysis from 2018 getting ready for day trading. I changed contracts in January of 2021 and had the opportunity to day trade and work for the first time of my life.

I started to day trade in the summer of 2021. I was expecting to lose for 6 months and then start to break even on my trades and eventually become profitable. Everything was going too fast when I started, Also, I sized up too much. That was a mistake I regret doing. I downsized from 1-2k shares to 100-200 shares. In hindsight, I should have started with 10-20 shares for the first 6 months.

Everything is going at warp speed for day trading when I first started to the point of it being overwhelming. Kinda like when you first start playing poker you play 1 table and it is going kind of fast. Then you start to multi table, 2 tables, 4 tables, 6 tables, 8 tables. Well, day trading was like that. After 6 months, it's slower and manageable where I can be in 3 or 4 trades at the same time.
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03-16-2022 , 10:43 AM
90% Fail Day Trading

Stat: "90% of people who try day trading fail".

Ya, so, not sure what to make of this stat. First, I assume 50% plus just decide to day trade without spending time learning. or being serious about it and putting effort behind it.

I thought I could be break even after 6 months. Most day traders who succeed are red the first 1 to 3 years. There are a very few who can be green within the first year.

I pay to belong to one discord trading room and I, was fortunate, to get invited to a private chartroom with a guy who runs a hedge fund and was a previous market maker. From chatting with the Hedge Fund manager, day trading isn't that hard.
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03-17-2022 , 06:23 PM
When I first started day trading, I followed the plays of the owner of the discord trading room that I pay to be in. I pay $1K/year for membership. He is a scalper and his style did well during the 2020-2021 market. However, markets changed when I started in the summer of 2021. After about 3 months, I came to the conclusion that following someone else is not going to be profitable for me. I also came to the conclusion that all profitable traders trade their own ideas. I needed to find a style of trading and found that I may be good at shorting small caps stocks. So, 90% of my plays are shorting small cap stocks and the other 10% is longing or shorting large cap stocks.

There are other good traders in that chatroom so it's a good chatroom to be in to get alerts on stocks that are popping. Though, I make my own decisions on whether I would trade them. I also have scanners going to alert me on stocks that are popping PM (pre-market) which I monitor for possible plays. In small caps, the market maker dictates the price. You can't fight the market maker and win. You make money by understanding what the market maker is up to.
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03-17-2022 , 06:31 PM
My P&L for 2022 as of mid march

i have 34 green days and 14 red days so far in 2022. I will be happy if I can have 2 green days to 1 red day for 2022. I also chart my daily ROI to alert me if something is off in my trading. Because I work full time, I don't have time to review my trades at the end of the day so I keep track of my daily ROI and if my Daily ROI is a big negative then I will know I did something wrong and will have to review my trades for that day.

My plan is to just build my account gradually, be consistent and stay within my risk of 2% loss of my bankroll on one trade.

Last edited by SkyClassic; 03-17-2022 at 06:36 PM.
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03-18-2022 , 04:13 PM
Short scalps on TSLA, GME, MULN. Green day. To short you borrow stocks for a fee, sell (red arrows) first then buy (green arrows) back later. You want your sell price (Red arrows) to be higher than the buy price (Green arrows).

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03-19-2022 , 10:46 AM
How much juice do day traders pay on their transactions?
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03-19-2022 , 03:48 PM
Quote:
Originally Posted by Phat Mack
How much juice do day traders pay on their transactions?
You can place an order at the bid, ask or market. With my broker, i can place a buy or sell as a market order which costs $1 as it takes liquidity away from the markets. A market order fills you at the best price available and is instantaneous. I place an sell order at the ask I am adding liquidity to the market so it is free. If I place a buy order at the bid then I am adding liquidity to the market so it is free. Some brokers give a rebate for adding liquidity. orders at the bid or ask. Bid or ask orders are not instantaneous and can take a few seconds to fill depending on which way the price is going which is based on whether there are more buyers which pushes up the price to your ask or sellers which push the price down to your bid.

You can place 1K shares in an order for Tesla which is about $900K worth of stocks and pay $1 at most. So commissions isn't the issue with trading, your executions of your orders are important and borrow costs to short stocks if you short stocks. Longing stock has no other fees. Some stocks like Tesla. Bed Bath and Beyond are free to borrow to short. There's enough liquidity to have 5K, 10K number of shares orders without impacting stock prices for most small cap stocks that trade 40M to 200M shares a day.

Last edited by SkyClassic; 03-19-2022 at 03:54 PM.
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04-07-2022 , 05:25 PM
Nice short on IMTE today. a small cap stock that looked like someone walked it up and dump today. I'm holding a swing short on AMC S29.41. Read Reddit and watched youtube videos on how AMC is suppose to have a huge short squeeze. I can poke alot of holes in their analysis. As I said before, the market makers are in control and you make money by following what the MMs are doing with the stock price. Once in a while, the MMs lose control but that's not gonna ever happen again with AMC and GME.

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04-08-2022 , 12:11 PM
SBFM Sunshine Biopharma Inc. Stock price moved up 3 consecutive days on news from $2.20 to $12. Shorted it this morning Pre Market. Got faked out first time at $11s, Second time at $10s was the money shot as $7M shares were unlocked. Covered $6.50. Understanding what the MMs are upto to make $$.

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04-08-2022 , 12:30 PM
thank you for posting this, one rarely gets to hear about real life real time trading.

I would be interested in your opinion on ETF's. With the energy market going crazy XLE looks good but seems to have peaked. Any ideas where to invest for 5-10 year terms?
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04-08-2022 , 03:22 PM
Alert: great thread potential here.
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04-08-2022 , 09:57 PM
Quote:
Originally Posted by jcorb
thank you for posting this, one rarely gets to hear about real life real time trading.

I would be interested in your opinion on ETF's. With the energy market going crazy XLE looks good but seems to have peaked. Any ideas where to invest for 5-10 year terms?
I'm a tech guy so I've invested long term in tech companies since that's my work background. For oil and energy ETFs, I think you're buying at or near the peak.

The markets are still unstable while the feds are trying to control inflation. I think this will be the case till Q3 of 2022. I still like tech stocks that are cash flow positive for good growth 5 to 10 years out . I just don't know when to start investing in these tech stocks due to the unstable markets right now. Amazon has a 20 to 1 stock split coming in July. Apple, Google, Microsoft are other tech stocks that should do will long term as well because of positive cash flow. An option is to buy every month 1/6 of you total investments to dollar cost average over the next 6 months which will be unstable. I wouldn't buy an Tech ETF because you will have tech companies in the ETF that are cash flow negative which is not good when interest rates are high. To be honest with you, I'm not a big fan of ETFs except for SPY as I rather find the leaders or cream of the crop of a certain sector. I've done well doing this versus an ETF over my 20 years of long term investing.

There's a bit of a reverse psychology in picking stocks. You want to buy or plan to buy good companies with good balance sheets that are beaten down or out of flavor versus buying companies or sectors that everyone is in right now which is oil, energy, consumer discretionary. Tech companies are out of flavor right now and are beaten down but they will become in flavor again in a year or two.

Bio is so risky, 95% of bio companies lose money and never find an FDA approved drug. It's an easier game for me to short the bad small cap bio companies that are diluting shares to raise money for their trials.

I'm not sure if I answered your question but as anything specific and I will try to answer it.
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04-08-2022 , 10:12 PM
Quote:
Originally Posted by marknfw
Alert: great thread potential here.
Thanks, I will get into more detail about my thought process of daytrading (buying and selling within the same day), how I chose a stock, what I am looking for or the thesis I have on why the stock price is being manipulated.
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04-09-2022 , 08:37 PM
in, you should probably make a post in bfi linking back to here as your primary audience is over there and not skimming blogs
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04-12-2022 , 11:52 PM
I can see there are many crossover traits between trading and poker. I've been dabbling a little bit of the last year.

Just wondering, how is the skill vs luck quanitfied? How long does it take to estimate your skill edge (or determining if you have one)?
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04-28-2022 , 04:45 PM
Quote:
Originally Posted by rickroll
in, you should probably make a post in bfi linking back to here as your primary audience is over there and not skimming blogs
Just thought no one is blogging about day trading or any type of trading so thought I do it here. I may add a link later.
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04-28-2022 , 05:11 PM
Quote:
Originally Posted by pure_aggression
I can see there are many crossover traits between trading and poker. I've been dabbling a little bit of the last year.

Just wondering, how is the skill vs luck quanitfied? How long does it take to estimate your skill edge (or determining if you have one)?
**** lol. I been gambling since I was 18 years old. Gambling is not the right word. I became good at putting money on the line when I think I have an edge over the long run. If you can spot a car worth $4k and you can get it for $3K, well you buy the car then sell it for a profit. Sometimes you buy a car for $3K and end up selling it for $2K but if you are right more than wrong over a large sample size, you make money. I don't think this has anything to do with luck over the long run.

It takes time and effort to become a good day trader. Most people lose money in year 1,2 of day trading. Only a few are green after the first year. These are in the order of the level of difficulty for me to become profitable from easiest to hard in terms of the number of years I spent to become profitable:

Poker back during the boom.
Day Trading (green but have not completed 12 months yet)
Sports Handicapping
Horse handicapping

There are similarities between poker and day trading. They are bankroll/risk mgt, not going on tilt, table selection which is similar to picking the right stocks to trade for the day, hand selection which is similar to waiting the right setup show on on the stocks you are looking to trade. If it wasn't for poker, day trading would have been harder for me to pick up.

Just like poker where you become better as you play hands and get experience, you become better as you trade and get experience with entries and exits. Some guys use play money/simulation for 6 months before they use real money. I did not do that. I lost money the first 3 months and then started to break even. About month 6 I started to turn it around. I always had a ratio of 2 green days to 1 red day so my issue was easy to fix and that was to cut my losing trades quickly which reduced the size of my losses. I am usually in 10 to 15% of my bankroll and will cut at a 10% loss so that equates to 1 to 1.5% loss of my bankroll.

My issue was easy, but there are other rules I picked up like don't short any stock under 8M float unless I downsize for fun. I don't short any stocks that pop day 1 and is overcrowded and has too much volume trading. I picked up these rules to filter out stuff that causes head aches. There are a ton of other things I picked up from profitable traders who been at the game for 10+ years. I am 90% shorting stocks that are pumped.

Ya, not sure how many trades u need to come to realize u are profitable. Maybe 1000 trades if you have that solid grinding consistency day in day out.
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04-28-2022 , 05:18 PM
I had a swing short on AMC from $29.41 3 weeks ago and just closed the short at $15.48. This may be my best trade of 2022.

Reddit, the Apes, bunch of youtube videos on the MOASS (mother of all short squeezes). I have my own theory and I don't think AMC or GME will ever squeeze. As i said, the MM (market makers) control the price 99% of the time. In rare cases, you get an influx of volume like 1 to 3M shares traded per minute where the Mms lose control and the stock price is all over the place like back in Jan of 2021..but that will never happen again. I don't think they will squeeze ever. You make money by understanding what the MMs are upto and you lose if you are fighting the MMs.
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04-29-2022 , 07:39 AM
Poker had it's boom years where the tables were soft. So, the markets were soft when Covid lock down occurred. There are a number of day traders who did well during 2020 and first half of 2021 but are now having a hard time generating a profit in since the summer of 2021. I started to day trade in the summer of 2021 when the markets were tough. This may be fortunate or unfortunate. If I can stay green this year, I will be in a good position to take advantage of a softer market, whenever that comes.

When I say MMs control the stock price, I am referring to small and mid cap stocks, not the large caps like Google, Amzn, AApl, Tsla, etc. 90% of the small and med cap stocks lose money, So the MMs pump the stock price on news and liquidate stocks into the market to generate money to be used by the company for operating expenses. In order to liquidate stocks into the market, the company needs to file a number of docs with the SEC in order to dilute more shares to the public. These SEC filings are open to the public so based on the filings, you know that company X will pump the stock price up and then dump the shares into the market to generate money to be used for operational expenses. Alot of pharma companies do this on a regular basis. MMs aren't controlling the stock price every day, they control it to get something accomplished and will leave when it is completed. So, knowing what the Mms are up to and knowing when they are finished helps you make money.

There are losts of free stuff on the Internet and youtube on day trading. The chart guys, humble trader, madaz money, the short bear, Dux have some good free info.

Back to that simulation or trading with play money for the first 6 months. I did not do that but I think that is a good idea. When I first started I was buying and selling 1K shares. Man, I was leaking bad. I dropped down to 100 and 200 shares. In hindsight, I should have traded 10 or 20 shares for the first 6 months. You are not very good the first 6 months day trading. Kinda like poker, it takes a few months to start thinking at level1,2,3 and feeling out traps. In stocks, the MMs are trying to trap you and take your money.

Last edited by SkyClassic; 04-29-2022 at 07:46 AM.
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04-29-2022 , 04:25 PM
I had about $8K in my account in November and slowly started to grind it up since then. Made a big mistake on a trade near the end of March which resulted in a $2.2K loss for the month of March instead of $2.5K profit that month. I was really disappointed I did not cut my losses quickly. I know better. April was a very good month. I'm in 2 Discord chatrooms and got a tip from one of the season traders on a possible pump and dump. Trying to be very patient and pick my spots. Emotionally, been very within myself. Just a video game to me.

Starting account was $8K in Nov 2021. Account is at $52K. No, I don't use the leverage they give me, wish I can ask them to take it off, , always practice risk mgt. lots of traders blow up their accounts multiple times. They don't understand Risk Mgt.




P&L for 2022

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05-03-2022 , 04:13 PM
My thought Process for a trade this morning. Wake up at 6:30am. Log on to see what stocks are gapping pre-market. I see that SNOA ( SONOMA Pharmaceuticals Inc.) is gapping up on news. I check the news and here it is:



So, a cleaner, OK, let's see how high this stock goes.

Stock traded at $2.50s yesterday and now it gapped to $3 and was going higher. I go walk the dog, make coffee and am back at the screens.

I pull up the daily chart. First thing that sticks out is that when this stock pops up (likely on news) it gives is gains back by end of day. Basically, some large holder is using the news to sell their shares.

I expect this stock to do the same today. The big question is how high will this pop before it starts going back down? Looking at the daily chart, I say somewhere around the low $4s.


I borrow some shares and proceeded to short it at various pops during the day and covering when it flushes some. I ended up with 3 scalps where one was a small loss but the other two were very good gains. A good trade indeed.

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05-06-2022 , 04:21 PM
Not many gappers today in small cap land. Felt like a slow day.
2 nice short scalps on TSLA coinciding with SPY dumping:

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