Ross Cameron Day Trading Guide 2025
How to start day trading today
1. Platform to choose 2. How much money to start with 3. How to manage risk 4. How to set up scanners to find stock trades 5. How to set up charts to analyze stocks on scanners 6. Where to buy and where to sell (what to look for) 7. Max Loss / Daily Profit Target 8. Creating a Trading Plan 9. When to Scale Up 10. Day Trading & Taxes Bonus:Beginners Mistakes to Avoid
Reduce the Risk
1. Trading Simulator until profitable 2.Always ask " What is my exit price on this trade? " 3. Monitor metrics to understand your average winners and loser in $ amount 4. Monitor your accuracy so you know what % of the time you're successful 5. Analyze your metrics to begin to understand the types of stocks you trade the best/worst. Focus on winning stocks, avoid the type you lose on p/l ratio 2:1 = 33% this 1:1 = 50% reward 200 risk 100 and the amount to aim is x2 As a beginner your intuition will be poor
Trading begins
4am eastern standard time premarket 9:30 am et bell ring 4pm closes 8pm after hours there are some brokers that allow 24 hrs trading in certain securities but not popular for momentum traders because volatility is limited. Dont trade 24hrs Trade from 7am to 10 am so you can capitalize on peak volatility and peak liquidity When traveling: and on the East coast, start at 4 am to 7 am When traveling: on the West coast, wake up early and dont trade later in the day, is not profitable worst time zones are hawaii, japan
Moving Average
9ema, 20ema, 200ema The average price of a stock over the set period of time -there are two types of MA: exponential and simple Use exponential they move a little faster
Reversal
A reversal is a turnaround in the price movement of an asset: when an upward trend (or a rally) becomes a downward one (a correction), or vice versa. They can also often be referred to as trend reversals. The opposite of a reversal is a continuation, or when an asset's price trend holds.
Rule of thumb for pattern trading
Always trade the first and the second pullback -If stock keeps going higher be very cautious, third and fourth pull back is too risky - As a beginner focus on the first and second pullback -take the setup that are the bread and butter that have the highest probabilities of success.
Stock that are obvious
Are the ones that trade the best: Taking profit based on risk vs reward reward ration at 1:1, 1:2, 1:3 etc -Buy at pull back observe candlestick wick for support -High Volume Green Bars is preferred -Light Volume pulled back is preferred (red) -Enter as green candlestick breaks high as previous red candlestick wick shows support
Multi-Monitor Layout
One monitor is trading scree with level 2 windows this will be the main monitor on another have the two stocks you'll be watching with 4 charts 10 second, 1 min, 5 min and daily chart on the third one screen sharing for warrior members P&L window to you can see the position, the stock to focus on, scanners and newsfeed 3 monitor is good for beginners then you can add another 2 or 3 to follow more stocks it cost money but can be subtracted as taxes since you HAVE to take this as a small business
Simulator Vs Real Money
Phase 1 (Experience) Phase 2 (Proof of Concept) Phase 3 (Real Money)
What re Halts
is a circuit breaker halt that trades outside a Standard Deviation, -it also stands for LULD (Limit Up, Limit Down) -all traders get stop for 5 minutes, they have been around for a long time. They slow down trading during trading hours so the biggest moves are during pre market and after hours
Stop Order
is an order that you put in and it will trigger if a certain price is hit. let say you 9.25 dls and it goes down to 8.75 but you put a stop order at 8.75.. Traders use stop order to manage their risk, it puts you out of the trade. NOTE: market makers hunt down stop orders to bring the price back down and buy shares at cheaper price, so they can buy and rally the price back up you can't use stop order pre market and you can't use it after hours learn to cut your losses
How do you break out of this downward spiral
is by understanding that the cause of this downward spiral is an emotional response One of the most important keys to success in trading is having the right mindset.
Candlestick shape: Topping Tail
it starts with a squeeze up, tall upper wick indicates that people are selling and brings the price down, sell out to red, exit indicator, get out, sell asap
Candlestick Shapes: Bottoming Tail
its also called hammer candlestick, shows support you can see the lowerwick as the base, - if its red candle, a reversal is mostly starting - if its a green candle, this reversal already started, if next candle is green, it confirms the trend. - buy here
At the First Setback
its important to immediately reduce share size to avoid spiraling. I cut share size down to 1/4 of full size and continue trading until I've recouped at least 50% of the loss. Once Ive recovered 1/2 the loss, Ive begin to increase share size again. Most beginner traders will do the opposite. They'll increase the share size after a big loss to try to quickly recover the loss. This results int the negative feedback loop, specially if the initial loss was due to a change in market conditions
Candlestick shapes: Long-Legged Doji
long legged upper showed upperwick, long legged lowerwick, still indecisive, you usually sale when it starts to drop
How halts or LULD work
look at the prior close Bands .75 cents .15 cents RP(Referen Price .75 cents to $3 20% RPinstantly HALD +3 10% RP RP = Average Price over 5 min HALT, you can't buy, you can't sell There are scanners that tell you when a stock was halted, often it means something had happened, sometimes they halt on a volatility trading pause. while the stock get halt it, there's an auction going on, people want to buy and want to sell depending on news Be a volatility trader and a momentum trader News typically come pre market
To be eligible for trader tax status
you must meet all fo the following conditions: -You must seek to profit from daily market movements int he prices od securities and not from dividends, interest, or capital appreciation; -Your activity must be substantial; and -You must carry on the activity with continuity and regularity
Market Order
you tell your broker I want to buy and this number of shares and i dont care about the price I get filled up dont use it instead use Limit order (Ross uses) you are telling the broker I want to buy but this is the most I am willing to share
TO trade pre market
your day order have to be switch extended hour on thinkOrSwim and you can't choose your destination Webull extended hours and you can't choose your destination Use lightspeed broker broker that ross uses day order and works pre market, it better to use a larger size eventually Use limit orders
Mindset is so important, how do cultivate the right mindset
Learn: Computer Literacy Discipline Emotional Regulation Internal Drive Situational Awareness 1. trade in a simulator. so if you lose money it doesn't trigger an emotional response 2. Focus on Accuracy
Market hrs 4am - 9:30 and 4pm and 8 pm we have
Limit orders only NO Stops NO halts NO options
Margin Account
Margin Accounts allow Unlimited Trading but requires $25k for US broker and Residents International Brokers do not enforce this minimum balance requierement Start where you feel comfortable, where you have the amount of trading opportunities you feel comfortable
Technical Analysis
Is the universal language of the markets
Volume Bars
They are color green and red
Candlestick shapes: Dragonfly Dojis
This is a bulling pattern, buyers came in and push the price back up
ema
exponential moving average 9ema, 20ema, 200ema
Tips for Improving Discipline
1. Keep share size well within the loss comfort levels to keep emotions in check 2. Follow strict max loss guidelines outlined in the trading plan 3. Consider activities that require discipline (meditation or exercise for example) 4. Journal and track your metrics 5. Take notes on potential triggers that cause you to become emotional 6. Develop list of triggers to be on look out for and stop trading if they occur 7. Dont compare yourself to others
Want to pay ZERO capital gain taxes on all your trading profits?
There are 2 ways Move to Puero Rico Tax Strategy #1 Act 60 in Puerto Rico Day Trading in a ROTH IRA Trading Profits and Distributions are 100% tax free
Phase 2 (Proof of Concept)
- Action: 1 trade a day for the first 10 days (then repeat and adjust based on results from first 10 days) -Reason: During first phase of real money the "guardrails" on your trading will be the tightest to help build a track record of consistency. This track record will become a source of confidence Positive Results: 6 or more winners, accuracy is 60%. Net profit from the 10 trades with profit loss ratio 1:1 or better Negative Results: if i have 4 losses, that speaks poor accuracy and likely the need for more experience practicing the SIM., but I could try another 10 days and see if I can do better. If my accuracy is above 60% but my net profit is negative (not including commissions), my profit/loss ____ healthy I need to review my losses closely and make a plan for making them smaller . Troubleshotting Guide) Alternatively< I could look at my winners and ask if I am selling them.
The Downward Spiral of Many Beginners
- Poor Track Record: History of losing, poor decisions, emotional trading. | - Poor Self Confidence: Pressure Increases, desperation leads to reckless trading | - Increase Losses Taking more trades and more risk (without track record support) to recoup previous losses. Emotional Build
Guardrails or training wheels
-Stop if I hit a max loss -Stop if I have 3 losses $____ each or bigger -Stop if I give back 1/2 fo day after crossing $____ -Be aggressive on front side then abandon stock when it fails to keep going up. -Honest Assessment of Market Sentiment -Honest Assessment of Emotional Disposition Today -Try to hold a piece until final Exit Indicator - Thrive til you thrive . Small Green Days are Good
Simple Trading Plan
-Strategy Overview: Momentum Trading Leading % Gainers on Front Side of the move - Time of Day: 8am - 10ET (Eastern Time) - Type of Stock: Price between $1-10 , Float Under 10 million shares, up to at least 25%, with news, relative volume 10x. Find stocks using stock scanners. Must be in Top 3 of leading % - Technical set up: Focus on buying pullbacks (Bull flag) when MACD is Positive -Daily Max Risk / Profit Target : Profit Target $25. Max loss $25 -Share size: Start with 50 shares until I'm up more than 10$, then increase to 100 max size - Scale to 500 shares and have daily profit target of $250, then increase 1k shares and continue to scaling up example 1) first trade 1/2 , 1/4 or full size winner 20cents =10cent loser = 20cent =-10 cent 2) Full size three losers in a row, you're out, try again tomorrow (real money) in a sim keep trying full size lose, get out if you will 1/2 then lose then go back to 1/4 size this is will help you determine if its going to be a red day
Support & Resistance
-Support = at the VWAP, Moving Averages, Trend Lines, and Previous Prices -Resistance: at the VWAP, Moving Average, Trend Lines and previous prices Learn this in-depth
Exit Indicators
1) High volume red candle: reverse indicator 2) MACD crossover 3) Topping tail candle/ Doji possible line to the exit 4) Break of VWAP going down 5) Break of 9ema going down 6) level 2 Big Seller or Burst of Red on the Time of sales (LEVEL 2)
What to look for in a broker
1. A trading platform that is reliable and popular among big money traders 2. Fast Order Execution (low tendency order routing from broker to the market) 3. Full Level 2 Market Data 4. Hot keys for rapid entry/exit 5. Allow sim trading so you can practice before going live with real money trade momentum trading stocks, volatile broker that uses hot keys on keyboard Ross Uses Trader Vue for metrics: you'll need your metrics
Mark to Market Election
1. Exempt from Wash Sales 2. Can write off all losses against income, and (No longer limited to 3K in capital loss) a) Additional losses that would put you in the negative can be used as a "carry forward loss" toupees future taxable income 3. Trading profits are classified as ordinary income (instead of capital gain s) so you can write off your whole loss
The only hot keys for a beginner trader
Buy Sell Cancel Orders take a sticky note write 1k cut it and set it on the keyboard so you know what to press 2:12 sample Webull is better than ThinkOrSwim
Point and Click
Click the order to entry window, manually update prices and share size, then press Buy and Sell bottons I dont mind using point and click to buy and I dont like using it to sell to buy type to sell use hot keys
4 charts for 1 Stock
Daily chart: look for support and resistance -5 minute chart:dot see any exit indicator -1 minute chart: Use the MACD -10 second chart: for teaching tool note: all for the same stock Best trades is when multiple time frame are aligning and giving you positive signals to buy
Level 2 Market Data
Depth of Market showing all buyers on the bid and all sellers on the ask a more thinly trader stock can move more quickly contantly look at the level two so its called tape reading
Step 1: Platform choice
Etrade Webull Lightspeed trading (Ross uses this broker) RobinHood ThinkorSwim TradeZero Interactive Brokers
Candlesticks shape: Dojis
Gravestone Doji is a candle that open and close are almost at the same price - This is a bearish candle study notes and remake them
The First Element of Risk Management is Trading A QUALITY Stocks
High Accuracy: Achieved by trading A-Quality Stocks | Profit/Loss Ratio: Higher accuracy reduces the total number of losses, and helps reduce large outlier losses | Consistency: More Green Days and Weeks
Pull backs
How to buy a stock cap your losses -waiting to sell is very important to learn, on a candle stick chart will be 1)High volume red candle 2)MACD crossover 3)Topping tail/Doji 4)Break of VWAP going down 5)Break of 9ema going down
Being the first to find the strong stocks
I created a custom build scanner to help give me an edge in the market. This scanner uses data from more than a decade of my own trading history to search for the type of stocks I statistically make the money on When the stock hits the scanner, I immediately analyze the news headline and begin performing a combination of fundamental and technical analysis day trade dash for members of warrior trading, goal is to create a unify dashboard instead of going to an unify dashboard.
Focus on Consistency
If you can prove consistency in a trading simulator making $100 a day, that can be your proof of concept to fund real money account $1,000 - 3,000 Use Trader Vue to analyze metrics performance, to see fig you're green and if not you need to keep studyi ng Broker that Ross Uses is LightSpeed Trading: its a commission trading platform but it checks all the boxes, you can use it once you gain experience usually 6 months to a year Focus on stocks between $2-10 You must learn your metrics Work the problem, not just guess Track each trade you are taking, see which ones are your loser, and which ones are your winners
Step 9 When to Scale Up
If you follow the trading plan step by step, your process of transitioning from Sim to Real Money, and the scaling up , will occur gradually. This is important because if you scale up too quickly youll encounter unexpected emotions that come with above average gains/losses This is a marathon, not a sprint. The market is not going anywhere. Dont rush it 10 days 1 trade a day 50 shares successful gains in 60% 10 days 1 trade 100 shares successful gains in 60% 10 days of 1 trade with 200 shares successful gain in 60% if you have a drawdown this will give you a track record of consistency.. start with 2 or 3 trades a day for recovery, so you manage emotions for the set back.
Tax Strategy #4 Day Trading as a business
Includes Trader Tax Status, Mark to Market Accounting. Additional allows contributions to a solo 401K of up to 69K per year and deducting health insurance premiums. Create an LLC OR Corporation
Times & Sales
Is a record of every transaction that has been placed. Green orders occur at the asking price Red orders occur at the bid price White order
Trader Rehab
Is when you bring your share size all the way down so you are trading at a level that does not trigger emotional response when you lose. To break the cycle you have to be incredible discipline focus on doing this for two weeks. then you're able to focus on building tour strategy
Step 7: Max Loss & Profit target
Its critical for traders (from beginners to experienced) to cap losses while allowing winners to reach their full potential Setting Max Loss on each trade, and Max Loss on each day, is mandatory Profit target are calculation of 2x the amount that was at risk (difference from entry to loss = -$20 then profit target is $40. I calculate in cents per share vs percentage example: thin risk/reward 2:1 profit ratio if you buy stock at 3 dls a share x1000 $3,000 capital sell it for a loss 2.75 = 250 loss risk sell it for profit 3.5 = 500 profit get close to a pullback and dont chase a stock
Bonus: Beginners Mistakes to Avoid
Learn from the mistakes of those who have come before you Most traders fail for one or two reasons 1. Because they dont have a strategy. That shouldn't be you after todays class 2. They lack the discipline to follow the rules of their strategy I've given you the blueprint of the strategy. Now it's on you to have discipline to follow the rules.
Hot Keys
Learn the hot keys of the brokers, these will save you time and sell buy faster you can create your own hot keys. Go into the Settings/Preferences, then under the Hot keys (Custom Keys, Keys Commands) create a series of actions and assigns them to a key Example: Buy 1,000 shares Ask +.05 EXT (Extended hours) Type Market Nasdaq Sell 1/2 Position Bid -.05 EXT (extended hours Type Market Nasdaq Cancel all Orders
Step 6: Where to Buy & Sell
Learn to how to buy and sell first -its important that you know that you should focus on building your own track record. Get this strategy and practice but REMEMBER TO FOLLOW THE RULES
Sim Trading Only
Make the commitment to share with a simulator for at least 90 days -Simulated Trading (paper trading) ONLY before going LIVE with Real money -If you can't make money consistently in a simulator there is not reason to trade real money If you share real money, share with one share real money equals to simulator trading Dont put real money on the line until you've proven you can make money in a sim
Order Types
Market Orders: 9:30 am - 4pm Limit Orders Pre Market Open - After Hour Close Stop Orders: 9:30 am - 4pm EXT order type: Extended Hours DAY order type 9:30 - 4pm Market: Select the Destination (optional)
Tax strategy #2 Roth IRA
Max Contribution Limit: $7,000 Max Income for Direct Contribution: Under $146,000 fora single filer or under $230,000 joint filer individuals above the limit can contribute to a traditional IRA then do a "backdoor conversion" to a ROTH Brokers that allow day trading in a ROTH IRA and Offer Settlement Margins lightspeed trading Charles Schwab Interactive Brokers
Tax Strategy #3 Traders Tax Status and MTM Accounting
Minimize Deductions and Allows Wash Sales Eligible traders can deduct reasonable and necessary expenses related to producing their trading profits - Education Costs -Software Cost -Computer Equipment -Office Rental -Internet Provider -Professional Fees (Accounting)
Step 2: How Much Money Do I Need to Start?
Most retail brokers do not have a minimum deposit requirements - In my experience, in cash account, I can grow the account by 10% on a nice green day -If I started with $100, that means my optimistic daily goal would be $10 on a nice green day, although many days might fall to closer to $3-5 -If I started with $1,00, or 10,000, my daily goal would scale up - Start with a small account dos your emotional response is not aggravating, so your blow up your account. Beginner traders tend to go in a downward spiral Start with a 1,000 then 5,000, 15k, etc
Taxes & Day trading
Most traders are OVERPAYING on their taxes due to: 1) Paying short term capital 2) By facing higher income due to Wash Sales Disallowed 3)Because they are limited to writing off only 3K in losses against income 4) Profits cannot be used to contribute to Retirement Accounts 5) Unable to write off expenses to trading
MACD
Moving Average Conversion Diversion indirect 9ema 20ema if it goes sideways, trend is ending, this the place where you have to be careful
Finding the Trades
Once we've found a strong stock on the scanners, we begin looking for a familiar and predictable pattern. Once we find the pattern, we are ready to take a trade on the pullback: buy first candle to make a new high
Step 5: How to set up your charts
Once you found a stock not he scanners that you like, you need to know how to analyze the chart. This is called technical analysis
Phase 3
Real Money Repeat Phase 2, Proof of Concept with he same size except with real money account. After successfully completing 10 days, you're ready to begin scaling
Step 4: How to Setup Scanners
Scanners are one of the most valuable tools traders use. This software searches the market in real time for stocks that meet certain sets of criteria Most brokers offer basic scanning technology. A simple scanner such as "Leading Gainer" will return a list of stocks up the most each day.
Phase 2
Simulator Start a trial for real money with one share
Choose one that offers a simulator
Simulator there's not order flow using real time data brokers most broker have simulators but are different to real money trading
Combining Charting & Order Entry
Since I know I want to buy the first green candle. Once I know the price approaches that important level. I can buy right as it is about to break
Phase 3
Start trading with real money Repeat the trail but increase it to 100 shares
Phase 1
Start with the simulator trade as much as you can, a LOT
Small Accounts Trading
Start with two trades daily for two month
Market hrs 9:30 am - 4pm we have
Stop Orders Market Order Halts (circuit breakers halts) Options (Ross dont trade options)
Getting into a Positive Feedback Loop
Strong Track Record: - Consistency builds a track record of profitability | Self Confident: - Higher accuracy reduces the total number of losses, and helps reduce large outlier losses. Positive Feedback Loop | Increased Profitability Taking Larger Positions and more trades (Supported by Track Record) and increasing total profitability.
Ebb and Flow
The Markets has hot cycles and cold cycles. Its easier to be aware of these when you're trading in a community and can hear the comments from other traders. When its cold, its important to size down to reduce risk. When its hot, i like to size up to the edge of my risk tolerance comfort zone in order to maximize on profits
Level 1 Market Data
The first depth of the market Bid Pride: Buyers orders Ask Price: Seller Orders Spread: Difference between Bid & Ask
Scanner Criteria
This introduce the concept of supply and demand: Indicators of High Demand and Low Supply 1) DEMAND: 5X Relative Volume (5x Above Average Volume today) 2) DEMAND: Already up 30% on the day 3) DEMAND: There is a NEWS EVENT moving the stock higher 4) DEMAND: Price Between $3 - $20 5) Supply: Less than 5 million shares available to trade (This is the float= the number of shares available to share, IPO (Ignition public offering) 10 million shares usually the amount of share is relatively limited, so most of the stock between 2-20 have relatively limited amount of stock) Buy back They can buy back let say 2 million so it goes down to 8 million, Secondary offering let say 5 mil share so the bring the float to 15 mil shares subscribe to daily news on stocks
Technical Indicators
Traders use technical indicators to help create context around the current price - I keep my charts simple and use minimal indicators Moving Average: 9 ema, 20 ema, 200ema 1. VWAP 2. MACD 3. Volume Bars 4. MACD
Creating a trading plan
Trading Plan Overview - Detail Strategy Description -Time of The Day You'll Trade -Type of Stock (Price, Float, % Change, News, etc) -Technical Setup (Momentum, Counter Trend, etc) -Daily Max Risk / Profit Target Strategy Momentum. look for stocks moving fast that meet the 5 pilar of stock selection between the hours 7 am and 10 am. Im trading the first pullback and second pullback, I got a daily max loss of X and profit X
Step 3 How to Manage Risk
Trading is risky. Its especially risky because anyone cam open an account and begin trading. The barrier to entry is very low. Just because you can open an account =, doesn't mean you have the skill or strategy to produce consistent profits Approach trading the right way, that means learning an strategy, and using a sim before you put real money on the line
A Business Plan REQUIRES a TRACK RECORD
Treat trading like a business and you create a track record to identify your progress
Candlestick Basics
Upper shadow Close Open Green Candle Red Candle Real body Real Body Open Close Lower Shadow or Candlewicks
VWAP
Volume Weighted Average Price is like a moving average: except it also factors the amount of shares trading example $1 100 shares . . $10 1,000 shares tells us the average price of the stock today including all the volume that was traded at each and different prices -it give us the truth of equilibrium this is the most average price of the day -if the price is trading above it = bullish -if the price is trading beloW VWAP= bearish
High accuracy
What you wan to see 10 trades P/L total profit = your average winners, your average losers, and % accuracy must be 60% price of the stock and time of day
Cash Only Accounts
When you open a brokerage account there are two types you can open. -Cash only or Margin. A cash only account will allow you to trade with he cash deposited, but once you've traded all the available cash, you have o wait til the trades settle before taking additional trades Trades settle overnight (T1), therefore, you can trade the full cash balance again the following day Within the last year it change to be overnight,
How much should you trade in a sim
as much as possible, get use to keys, get experience, once you get the feel, starting catching winner, then youll be a trading plan with a strategy. even with one share cap the losses and have a profit, always have the potential to make 2x of what you're risking
Candlesticks
create charts, building blocks for the financial market. each individual candlestick has four pieces of informations, it communicates the open price the close price the high price the low price for a period of time, when you look at a chart represent a different time period 1d = one full day a time, open price or low is the bottom part of the body, and the top of the body is the high or close a green candle opens low and closes high a red candle opens high and closes low candlewicks the way to think about it is like letter in the alphabet and they communicate BUY and SELL
