How to Practice Day Trading With Real Money (Start Smart!)
Let's talk how to start practice trading, with real money and i want you to start smart and put yourself in the best position, possible. To do this the right way, and that way you're not, building bad habits you're not catching yourself by surprise, in negative types of ways, and that you're going about, this strategy. In the most effective, you know method, possible. Now what i want to do here is first start, in front of the chalkboard. Walk you through what i'll call the dave method so i want you to become friends with dave. And then i'm going to take you to my desktop. And i'm going to actually walk through it and do it myself. In a real life environment. So i'll take you through like i said some theory here i'll introduce you to dave and then i'm going to take dave along with me and apply it to some of my trading. As if i was a beginner and that way you can see what i talk about play out in the real world of trading so who is dave well. When you are ready to start practicing. With real money. Because there is that phase where yes you can do stuff on the simulator, you can do stuff in you know demo accounts and all that, and i'm not saying that's not valuable. But there is something, to our mental makeup. Where when you see, actual numbers. Flipping on the screen and those numbers mean something meaning that's real money, that is your money, that's either rising, or you know falling. I mean it's going to bring about. Voices, emotions. That simulator, trading. Just is not going to be able to do, so that's why i want you to do this and that's why i still consider it practice. Because, you're not going to you want to practice in a smart way so. The first part. Of dave, is this i want you, to sit there and i want you to. Determine. A certain number, and what do you determine, what is this number. Well what i would call. This right here. I. No. Don't. Care. Now what don't you care about. An amount of money. The amount of money being, if you lost it and this sounds like such an ungrateful, it sounds like such a greedy savage mentality. But it's got to be this way it's got to be, some sort of number you literally sit there and say i don't care if i lose that amount of money.
Everybody's, Different. It's not going to be perfect but don't worry that's. We'll take care of that but you need to do your best, to figure out the number out there that you just don't care. So i mean for an example if i told you you're going to lose 10 cents how do you feel about that i would assume most people would say yeah i i don't care if i lose if 10 cents falls on my pocket, now if you do care that 10 cents falls out of your pocket. I don't think trading's for you i'd say you're a little bit too uptight about your money. But, again the number just needs to be something where. I don't care, so for me that number and this is just, for me, it would be. A hundred dollars. Right. If a hundred dollars, disappears. I i don't i don't care i mean, it's it's not really i mean that it's kind of a bummer but like i if i'm being honest and i get it makes me sound bad it should make you sound bad we're just like i don't care, and for me, i don't care about a hundred dollars. So we need to know that number that's going to help us practice the right way, so the next part. Is this and this is very very important. So. Adjust. Now what are you going to, adjust. You're going to adjust, this number up here. Because you know what. You and this will make sense especially when we get to the v, part next, but also you need to realize that maybe you don't quite know maybe for example for me, i think that it's 100, but you know what maybe it's actually not maybe 100, is still gonna freak me out, maybe that that's i'm i'm giving myself a little bit too much credit, and you could very well do the same thing i mean that doesn't make you stupid that just makes, you a beginner right and when you're beginner, you're just getting started in trading. Yeah you're not really going to fully, know fully understand, these numbers, so that's why i want to adjust. And what are you adjusting. How is this working, well you're going to take the. 100, dollars. So whatever your number is over here. That could be who knows what that number is but you're gonna take it and you're gonna divide it by two. And that means your actual, number that you're gonna work with moving forward. Is now gonna be. Again in my situation. Fifty dollars. So fifty dollars, is the true i don't care a number because again we need to factor, in, and we need to. Hedge, and mitigate, against the fact that again being you're a beginner, you're not quite gonna know that number, and then the next part here. Which is the v. And this is where we're looking for. Pretty sure that's not how you spell volatility, but you want to see volatility.
Meaning. You need to determine. Okay. Well. How fast. Does a stock, does whatever you're trading. Seem to have the ability to to move. Is it a really fast moving stock is it very slow moving stock is it kind of a medium, but you're needed you need to gauge, volatility. And this is something that is great great practice. But again. Because you are a beginner, because this is still practice. What could happen is you say well that stock's. Slower. But, again because you're still practicing because you're still learning maybe you get it totally wrong and that's actually a super fast stock, if you were to operate under that number, then all of a sudden you could be looking at numbers way bigger than what you are okay with learning, but what did we do with the a here well we adjusted. So that's also now covering the fact that okay yeah you're still in practice mode in terms of determining. Volatility, you're still figuring, out you're still recognizing, what to look for what to pay attention to, in order to determine. Just how fast. A stock or an options or a future. Or you know a, forex pairing, is going to be moving. So, gotta. Practice that very important skill, and you gotta also, realize that okay it might not be perfect so that's why adjust, you got to make sure that you make that, adjustment. And then the final part here. And this is the fun part. Is okay well it's. That's the worst looking i've ever seen, it's now time to experiment, right. Or in other words, you need to go out there and actually. Practice. So you're going to actually get out there and start to trade and start to practice. With that number in mind. And one of the things you need to do is determine, how fast something is because if, a stock. You think can, easily, easily move, let's just say. Two dollars, so you're let's say your determinant is wow, that stock could move two dollars on me, very very quickly. Well then how many shares should you actually be using.
Well You should only really be using, in this example. Two shares right, because if it can move two dollars very quickly and you're only willing to lose, fifty dollars. Well then, that's how that would add up. So again and you'll see all this again on the screen, and i'll walk you through it again, but, part of the experimentation. Is making sure you're getting what is known as your position, size right you need to make sure that you're managing, your money the right way, and once more to really just reiterate. The math, if you determine. That you think a stock can move two dollars, very very quickly. Then. And if you know. That you're willing to lose 50. Then that's going to tell you how many shares you should actually take in the position. Which would be two right because if you lose. Two dollars. Per share. Then that's gonna get you to. The, excuse me not not two shares. Uh you're gonna be at. 25. Shares right because if you have 25, shares. And you lose two dollars per share. Then. You're gonna have the fifty dollars, so if you caught my, error. Leave me down in the comment section somebody's like wait what do you talk about two shares, no i'm sorry, so again. 25. Shares. And if like i said you think your risk is you could lose. Two dollars, per share. Well then, two dollars per share. Times 25, shares, get you the, 50. So again i apologize, for my mathematical, error there, i could be clever and say and i did it on purpose to see who was paying attention but no i just totally screwed that up so that's how the math works is. Figure out. The key number. How fast is the moving and then the first part of your practice, determine that position size. And you know everything will be different. So. Keep that in mind, and now that we've, you've met who dave is let me introduce you to dave, in a more real world practical setting so let me take you to my, desktop. All right welcome to my desktop, here and right now i am watching, jks, this is all live i have no idea what's, about to happen. But watching jks, and doing some quick analysis, it's looking like that i could lose potentially, right around one dollar per share, so think back to me at the, at the the chalkboard, and saying you know my number after going through that sequence. Is 50. So the way the math works, is very very easy the first thing you're going to do, is enter into your calculator, spreadsheet. The amount that you're okay with losing so in this situation. Fifty dollars, you're then gonna divide, by whatever, amount you think you could potentially, lose like i said in this situation. I could see myself losing, one dollar per share, so you're gonna hit the divide button, by whatever amount, you think you could potentially, lose which tells me on this situation. I should be using 50 shares, just for example, say, let's say that. I thought i could actually be losing a dollar fifty per share, well in this situation, again start off with the amount that you're okay with losing fifty dollars, and then you divide that, by whatever amount you think you could lose per share like i said in this made-up situation. I think i could potentially lose 1.50. Which means, i would then want to take 33, shares in the position. And then just to really hammer that home and i'm not trying to talk to anybody's intelligence, but just let you know that you know this is, this is straightforward. Let's just say that, i thought that i could lose. Uh three dollars per share. So in this situation, all right well how much am i willing to lose to begin with well 50, that's what my i'm willing to lose and then what do i think i could potentially, lose per share, well three dollars so divide that by three and in that situation, i should be taking always round down, so 16 shares don't round up to 17 just do 16, shares. So that is how it's all working out here, and with that being said i'm going to change this to the 50 shares here like i said, i'm thinking i could potentially, lose let's see. 66, yeah, even probably even less than that, but what i would like to see here is a breakup over. The 6670. Mark.
Actually Let's just go 6650.. So i said this thing i'm thinking is either going to want to bounce. Or roll back over, so in at 66.50. And the goal here is you got to get used to this right here this number right there. On paper trading that number when it's fluctuating, back and forth. That is you know that that can freak you out, that can be a situation, where, oh, oh you know things things are getting scary. And but you got to get used to it you got to get used to it all right so that's the whole goal here is, being aware of and i might actually lose more but i'm trying to talk so i might not be actually able to get the buttons where i need to but that's okay because in this situation, i'm just trying to get but that's what i want you to get used to. And this wasn't necessarily, the the best trade of trades but like i said just to illustrate the point. That's what the whole goal is here, you to get familiar with how that feels to watch money okay i'm down 14. i'm down to okay, i'm down 10. it's starting to go in my favor can we get a bounce, you know now i'm only down 7.50. Fifty. You know, now i'm down seven see how that's fluctuating. Now i'm down six now i'm down seven now i'm down hey i was almost at break even. You know that's the goal here, that's what you're trying to do you are trying to get yourself in the mindset. Of what it feels like to see those numbers fluctuating. All over the place. So. That's the goal right now. Just to keep. Here we go watch down nine. Down eight down hey i'm at break even, look at that i'm at break even, so now i'm feeling good at least i'm back at break even hey i'm up five dollars, now oh now i'm only up one oh now i'm back to break eve okay now i'm back to 350., okay, i'm making money. I'm up 550. All right, all right, fantastic. So you're feeling good and you're gonna say come on come on, number get bigger. Get bigger now again you're not doing this to make money you're just doing it to get the feeling of how this all works and how this feels. Oh now i'm going to up 350.. Oh. And i'm up four not yeah i'm up nine, okay i'm up seven. See that's the goal here. And then let's say you want to practice scaling, out now i'm not saying this is where you would want to scale out but just for example say, okay i just practiced some some money management there i just took off some of my position. So now i'm getting good practice, in the world of hey you know what, managing the position, scaling, out again i'm not saying that's where i should have scaled out but just to drive the point across here that's that's the idea. And now you can see it's still going in my favor so the way this works is right now, i've already locked in 4.75. But open, i'm still actually up 9.50, 11. I'm still open so you know what let's scale out some more let's practice that, let me scale out 10 more, so there we go now i've scaled out another 10 shares again just in the spirit of practicing, to making money. And now i've locked in seven dollars and seventy eight cents, and all right i'm still up six dollars on these shares.
So I mean just a classic bounce here and i don't know let's. Let's say i want to do. Five shares here on out now so maybe i'm thinking okay i think this thing might want to roll back over so let me just get rid of another five shares there we go now i have 10 shares left. And maybe, maybe you're thinking okay well i want to practice the limit order so let me try to type in a limit order up at, 67. To sell another five shares, so there we go now you're practicing a limit order right, a limit order meaning. You're only going to sell if it hits up at 67.15.. Now will it get up there i don't know, but if that, you know if this order here goes from white to green that means i got filled there you go white to green now i just got some practice with a limit order so now i've actually made 13. Still have five shares left. And now let's do this let's practice you know just with the stop loss, so i'm going to put my stop loss right there. At. 66.75. And i'm not saying that's a good stop loss but now i'm getting practice so stop. And then sell, so now get it now i'm getting the feel of what it's like to, watch a stop-loss, put a stop-loss, in, meaning if the price comes down to 66.75. I will be taking out, with a profit for the remainder of my shares but now let's say all right well it is it's actually going in my favor so what i'm going to do here is actually adjust this up so i'm going to cancel that out and let's make the stop loss now 67.. So now my stop loss up there at 67. Meaning if this comes down to 67, i'll be out but who knows maybe this bounce wants to continue. And if it does well then hey i'll adjust my stop-loss once again but now i'm getting practice. In adjusting, stop losses. And at the end of the day it's still all about this area right here, just. Molding your mind. Meeting those voices, understanding the emotions, that come. When you see. Those sort of numbers fluctuate. Because paper trading, i get it well paper training will show me that and you're right it does, but there's no, true emotions, connected, to it. So let's just say and i'm making this up if this thing goes up over 67.50. Then you want to you know adjust your stop loss once again to 67.25. So. I want to practice that so let's get that in there but again it hasn't gone up, over 67.50. Yet. But if it does then you want to cancel. So now you're watching now you're just getting practice watching, okay can it get up above 67.50. If it does. Then it's time to like i said adjust that stop loss up once again. So now i'm getting practicing just watching that price watching this if this thing goes up over. 67.50. Then i will be adjusting, my stop-loss, up so that's what okay there it goes, so cancel that out, and now my stop-loss, is at 67.25. So notice as this thing continues to go in my favor. I'm just continuing, to adjust this up now let's say if this thing goes up over 68. I want to adjust this to 67.50. So that's the next thing i'm gonna practice here. Now hopefully this thing doesn't keep going up and up and up or else it's gonna be like the longest video ever but. If if it looks like that i'll just start to get super aggressive, and make sure i get stopped out but right now we'll give it one more chance let's see if this thing like i said can get up over 68., if it does. Then fantastic. And i gotta be honest i'm glad i'm making money on the trade i could have totally lost. But uh it was a good setup, maybe not one that i would take all the time but it was definitely good enough where i'm gonna certainly take it for, for the purpose of this type of video. Now of course in hindsight i'm like man clay you should have just gotten like 500, shares, but that's not the point of the video clay, i'm talking myself right now and also stalling to see if this thing wants to get up, above 60.
Oh It's approaching, it's approaching my stop-loss. So now you got to watch that if that turns to green, that white to green that means i've been taken out. And i'm out there. So there we go the trade is out i got to pre and like i said that was, um. You know all. Not necessarily. Not i definitely didn't know what was going to go on but, fantastic, example. And uh walked away, with 16. Now is 16. And 50 cents like am i gonna go rolex shopping right now, no absolutely not but, that is not the idea the idea here is to practice, with real money, practice all the different order entries practice maneuvering, practice scaling out practice putting in stop losses, and the main thing again, practice, watching that number right there as it fluctuates. Up and down up and down, if you've never done with real money i promise you it is going to play mind games with you but you need to just. Start to get used to it and start to just, stay calm, yeah i mean it was a little scary when i was showing me down what was it seven or eight bucks, but you know what nothing violated, my trade plan, and then eventually, it went my favor and, uh you know i made a really nice uh move on it. But i also just want to really reiterate, right now that i'm not saying that the way i manage the trade, is how you should manage it the idea here is just to show you the idea of being able to practice managing a trade however your strategy, and system, you know dictates you should be managing, it when you should be putting in stop losses, when you should be adjusting, stop losses, when you should be putting in limit orders you know like i said that was just totally random on my part, um. But like i said the idea here is this is how you would practice with real money, so nice little example there. Again, the idea here is not to make a, boatload of money the idea here is just to get, good solid, practice, with real money on the line. Now full disclosure's, sake at this point in time, i have not done the computer part, so i don't know if i, made money or i lost money but what i can tell you is that.
There Was definitely. No stress there is definitely no freaking, out but was what was very beneficial, is just seeing those numbers fluctuate, seeing the p l go up and down up and down, because that's something you're going to need to get your mind used to, but yeah as of now, don't know how it turned out, you'll know how it turned out but one thing i will definitely guarantee, is that, when you do, this the right way, when you when you meet dave, hang out with dave, he is going to make sure that you stay. Relaxed, he's gonna make sure that you can think through a trade plan that you can honor the trade plan let the trade plan work without freaking out because you're seeing numbers, uh that are fluctuating, that again are real money so hope this helps out if you have any comments questions questions, leave those down below, also if you enjoyed the video hit that like button that's a very quick way to communicate hey clay thanks for this please keep making more videos like this and then finally check out the channel as a whole there's lots of other live trade videos on the channel, where it's not me actually with dave it's just normal trading, so if you want to see more live trading like i said check out the playlist on the channel, hopefully you decide to hit that subscribe button i would love to have you as a subscriber to the channel but yeah get out there, meet dave start to hang out with dave as a beginner and he'll help you out quite a bit, first off thanks so much for watching the entire video real quick before you go, i want to invite you to a live webinar, web class, training, workshop, online event, whatever you want to call it but it will be me, live, revealing, to you what i discovered, that has allowed me to transform, myself, from being an employee, to being my own boss, including. How i had only one losing day out of 73, days in total, i'm going to cover three keys that have helped me, unlock, profitable, consistency. Within the markets. The first key is super weird but in a productive, type of way, the second, key is super awesome because it quite literally, is wired into our dna, as humans, making it very easy to use, but in a cruel way, this becomes a pitfall for many traders, i'll explain it all though, including how to avoid the pitfall, that it creates for some, and yeah the third key when you hear it sounds way too good way too good to be true but it's not and i'll show you, how it all works, then at the end i open it up for a question and answer session that is again, totally, live, even if you can't make the live session, please still sign up as it will be recorded. And you can go back and watch the replay, that i will send you, click the image on the screen or click the link down in the description, box, so you can get the date and time and claim your spot, which i should note is limited, due to the fact that this truly, is a live event, if you have any questions. Let me know if not, i'll be seeing you soon.
2020-11-13 12:37
