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Trading Strategy of a Professional Day Trader – Karey Girish

October 3, 2013

Well there are many trading strategies that professional traders use to trade the stock markets. However I have made my own trading system and it has benefited me for a while now. In this article I would like to tell beginner traders who just started trading about how I go about trading. Ok this is how I trade but please (keep in mind I have been trading for 5 years now):

1. Wake up at 8 am, take a 15 minute walk with a coffee… little meditation in the park.

2. 8:45 start my trading terminal and simultaneously listen to CNBC squawk box.

3. I go through: + (PLATINUM version) – in that I look for: major downgrades/upgrades + stocks declaring earnings if any + major news stocks + Economic calendar

4. Am done with my news gathering till 9:15 (which includes putting news stocks in the watch-list).

5. I play ESCAPA till market open and keep my ears open to Bloomberg now:

Such a game is very important for an active trader who would want to rely on speed for instant executions. If you intend to become a professional day trader using a good direct-access trading software, then you must play this game regularly, as it strengthens your hand eye co-ordination. A beginner trader can also download a demo trading softwares that be downloaded for free and can practice paper trading with such speed. Playing such a game hones the art of speed and your reflexes go amazingly swift with time, thus you should get in and get out of a major position within split seconds that too with NO PANIC.. very important.!

6. Market opens – and I look for volatility and moves. Waiting for the moves was good when the market wasn’t hybrid, but these days first 1/2 n hours is very important because if you catch those major moves, then you are done for the day in the first 2-3 trades.

I try to be in stuff that is in news. I don’t like being in stocks that NO ONE IS WATCHING. I want to be in the action, because real money is there, where the stocks move, all you have to be is on the right side of the trade (for which I have my own strategies to decide how to trade a stock – how the 5 day chart looks, how the OPEN BOOK looks pre-market, how orders are coming into the OPEN book, try to read the OPEN BOOK, whether the BIG buyers getting hit and BIG offers getting lifted or NOT, how the specialist is treating the stock, whether there are programs/black boxes/automated programs trading in that stock, are there any brokers trading that stock, how we fellow traders treating that stock, block trades happening or not, volume is picking up or not, little trend analysis + a little of technical analysis like support or resistance.

7. That’s all am done by noon. I don’t put more than 5-6 trades in these 2-3 hours. And if the market really moves then I come back and trade again 2 hours before the market closes. I don’t unnecessarily churn my capital in commissions…!! (However you should trade whole day as you are still learning…. The more you are in front of the PC the more you will learn looking at stuff).

Try using a software to trade that is connected directly to ECNs and exchange (Direct Access Platform):

You must have these (I use all this):

1.        Charts

2.        Watch lists

3.        NYSE Open Book – very important: I USE

4.        Level 2 showing arca, brut and other ecns – very important: I USE

5.        Scrolling Time & Sales (TAPE) – very important: I USE

6.        Real Time Squawk box like:

7.        Stock Screener where you can add parameters: I use whisper, they make it as per my need (lot of hedge funds use it).

These days one should stay away from pre-market trades, as the markets have gone hybrid – so the volatility aspects make it hard to pick some real quality pre-market moves. Lastly a trader should believe in himself and must have the conviction to excel in every trade.

By: Karey Girish

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