Day Trading For Dummies, 4th Edition

Day Trading For Dummies, 4th Edition

by Ann C. Logue
Released April 2019
Publisher(s): For Dummies
ISBN: 9781119554080

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Book description

Understand how day trading works—and get an action plan

Due to the fluctuating economy, trade wars, and new tax laws, the risks and opportunities for day traders are changing. Now, more than ever, trading can be intimidating due to the different methods and strategies of traders on Wall Street. Day Trading For Dummies provides anyone interested in this quick-action trading with the information they need to get started and maintain their assets. 

From classic and renegade strategies to the nitty-gritty of daily trading practices, this book gives you the knowledge and confidence you'll need to keep a cool head, manage risk, and make decisions instantly as you buy and sell your positions. 

  • New trading products such as cryptocurrencies
  • Updated information on SEC rules and regulations and tax laws
  • Using options to manage risk and make money
  • Expanded information on programming

If you’re someone who needs to know a lot about day trading in a short amount of time, this is your place to start.

Table of contents

  1. Cover
  2. Introduction
    1. About This Book
    2. Foolish Assumptions
    3. Icons Used in This Book
    4. Where to Go from Here
  3. Part 1: Getting Started with Day Trading
    1. Chapter 1: So You Want to Be a Day Trader
      1. Defining Day Trading: It’s All in a Day’s Work
      2. Committing to Trading As a Business
      3. Identifying the Personality Traits of Successful Day Traders
      4. Seeing What Day Trading Is Not
    2. Chapter 2: Introducing the Financial Markets
      1. Having a Firm Grasp How Markets Work
      2. Opening an Account and Placing an Order
      3. Defining the Principles of Successful Day Trading
      4. Understanding Risk and Return
      5. Differentiating Trading, Investing, and Gambling
      6. Managing the Risks of Day Trading
    3. Chapter 3: Assets 101: Stocks, Bonds, Currencies, and Commodities
      1. Grasping the Different Things to Trade
      2. Defining a Good Day Trading Asset
      3. Taking a Closer Look at Stocks
      4. Examining Bonds
      5. Cashing In with Currency
      6. Considering Commodities and How They Trade
    4. Chapter 4: Assets 102: ETFs, Cryptocurrency, Options, and Derivatives
      1. Explaining Exchange-Traded Funds (ETFs) in Plain English
      2. Getting Familiar with Cryptocurrency
      3. Dealing in Derivatives
      4. Comprehending Arbitrage and the Law of One Price
    5. Chapter 5: Increasing Risk and Potential Return with Short Selling and Leverage
      1. Understanding the Magic of Margin
      2. The Switch-Up of Short Selling
      3. Leveraging All Kinds of Accounts
      4. Borrowing in Your Trading Business
      5. Assessing Risks and Returns from Short Selling and Leverage
    6. Chapter 6: Managing Your Money and Positions
      1. Setting Your Earnings Expectations
      2. Gaining Advantage with a Money-Management Plan
      3. Examining Styles of Money Management
      4. Seeing How Money Management Affects Your Return
      5. Planning for Your Profits
    7. Chapter 7: Planning Your Trades and Trading Your Plans
      1. Starting to Plan Your Trades: Just the Basics, Please
      2. Closing Out Your Position
      3. Maxims and Clichés That Guide and Mislead Traders
  4. Part 2: Developing Your Trading Strategy
    1. Chapter 8: Picture This: Technical Analysis
      1. Comparing Research Techniques Used in Day Trading
      2. Using Technical Analysis
      3. Reading the Charts
      4. Considering Different Approaches to Technical Analysis
      5. Avoiding Technical-Analysis Pitfalls
    2. Chapter 9: Following Market Indicators and Tried-and-True Day Trading Strategies
      1. Psyching Out the Markets
      2. Taking the Temperature of the Market
      3. Measuring Money Flows
      4. Considering Information That Crops Up during the Trading Day
      5. Identifying Anomalies and Traps
    3. Chapter 10: Eliminating Emotion with Program Trading
      1. Creating Your Own Trading Program
      2. Programming, the Day Trading Way
      3. Backtesting Once, Backtesting Twice
      4. Building on Some Standard Strategies
      5. Arbitraging for Fun … and Profit
      6. Scalping, the Dangerous Game
      7. Understanding Risk Arbitrage and Its Tools
      8. Examining Arbitrage Strategies
      9. Being Aware of Those Pesky Transaction Costs
    4. Chapter 11: Day Trading for Investors
      1. Recognizing What Investors Can Glean from Traders
      2. Applying Momentum
      3. When an Investor Considers Trading
    5. Chapter 12: Researching Research Services
      1. Understanding the Trade of Trading
      2. Getting the Research You Need
      3. Doing Your Due Diligence
    6. Chapter 13: Determining Your Profit and Your Profit Potential
      1. Before You Trade: Testing Your System
      2. During the Day: Tracking Your Trades
      3. After You Trade: Calculating Overall Performance
  5. Part 3: Day Trading, Incorporated
    1. Chapter 14: Setting Up Your Day Trading Like a Business
      1. Planning Your Trading Business
      2. Setting Up Your Trading Laboratory
      3. Getting Mobile with the Markets
      4. Controlling Your Emotions
    2. Chapter 15: Your Key Vendor: Your Broker
      1. Choosing a Brokerage
      2. Discussing Brokers for Day Traders
      3. Being Aware of Brokerage Scams
    3. Chapter 16: Regulation Right Now
      1. Looking Back on the Road to Regulations
      2. Reviewing the Regulators
      3. Working with Brokers’ Rules
      4. Watching Out for Insider Trading
      5. Preparing for Rule Changes in Crisis Conditions
      6. Taking on Partners
    4. Chapter 17: Taxes for Day Traders
      1. Getting the Lay of the Land: What You Need to Know Based on What You Trade
      2. Hiring a Tax Adviser
      3. Doing Your Taxes Yourself
      4. Identifying Income Categories You Need to Know
      5. Tracking Your Investment Expenses
      6. Top Secret Tax Information for IRS-Qualified Traders Only
      7. Discussing Other Important Tax Info: Forms and Deadlines
      8. Using Self-Directed IRAs
  6. Part 4: The Part of Tens
    1. Chapter 18: Ten Good Reasons to Day Trade
      1. You Love Being Independent
      2. You Want to Work Anywhere You Like
      3. You’re Comfortable with Technology
      4. You Want to Eat What You Kill
      5. You Love the Markets
      6. You Have Market Experience
      7. You’ve Studied Trading Systems and Know What Works for You
      8. You’re Decisive and Persistent
      9. You Can Afford to Lose Money
      10. You Have a Support System
    2. Chapter 19: Ten (or So) Good Reasons to Avoid Day Trading
      1. You Want to Discover Investing by Day Trading
      2. You Love Fundamental Research
      3. You’re Short on Time and Capital
      4. You Like Working As Part of a Group
      5. You Can’t Be Bothered with the Details of Running a Business
      6. You Crave Excitement
      7. You’re Impulsive
      8. You Love Going to the Casino
      9. You Have Trouble Setting Boundaries
      10. You Want to Get Rich Quick
      11. The Guy on YouTube Said It Would Work
    3. Chapter 20: Ten Common Day Trading Mistakes
      1. Starting with Unrealistic Expectations
      2. Beginning without a Business and Trading Plan
      3. Ignoring Cash Management
      4. Failing to Manage Risk
      5. Not Committing the Time and Money to Do It Right
      6. Chasing the Herd
      7. Switching between Research Systems
      8. Overtrading
      9. Sticking Too Long with Losing Trades
      10. Getting Too Emotionally Involved
    4. Chapter 21: Ten Tested Money-Management Techniques
      1. Taking Money off the Table
      2. Using Stops
      3. Applying Gann’s 10 Percent Rule
      4. Limiting Your Losses with the Fixed Fractional System
      5. Increasing Returns with the Fixed-Ratio System
      6. Following the Kelly Criterion Formula
      7. Figuring the Amount to Trade with Optimal F
      8. Measuring Risk and Sizing Trades with Monte Carlo Simulation
      9. Taking a Risk with the Martingale System
      10. Throwing It to the Fates
  7. Appendix: Additional Resources for Day Traders
    1. Great Books for Great Trading
    2. The Trader’s Internet
    3. Other Mainstream Media
  8. Index
  9. About the Author
  10. Connect with Dummies
  11. End User License Agreement

Product information

  • Title: Day Trading For Dummies, 4th Edition
  • Author(s): Ann C. Logue
  • Release date: April 2019
  • Publisher(s): For Dummies
  • ISBN: 9781119554080