The Number One Rule in Day Trading

Readings

Day Trading 101 is a great introduction into the world of financial trading.

Trading requires a different mindset—one of getting in and getting out at the right times instead of holding until fundamentals change. Since the goal is so different than investing the rules are different. The book makes it very clear that the number one rule in trading is capital preservation.

DayTrading101

The book is designed for people without any investing knowledge but is certainly easier to read if you already understand a bit about investing. There are chapters about interdependencies of currency markets, reading candlestick charts, derivatives and futures, commodities, an explanation of support and resistance, and building trade pyramids to minimize risk. All of these topics are approached in a light and easy to comprehend style, though if you really want to get into trading you’ll likely have to do additional reading to begin.

My interest in day trading is really about trading cryptocurrencies based on data, and this book makes no mention of the cryptocurrency market. However, the insights about capital preservation have been critical in our new trading bot. The safety-oriented model built into the bot largely avoided last week’s carnage in the Bitcoin market. ($11,600 on March 5, 2018 to $7331 on 3/18).

If you have any interest in trading and speculation over investing, you should definitely give Day Trading 101 a quick read.