How to Make $200 a Day Trading Stocks

How to Make $200 a Day Trading Stocks

 

So you want to know how to make $200 a day trading stocks? Below is a step-by-step guide on how to get started, a few indicators that are good to know. It’s not easy, but it’s possible.

 

1. The first step to make $200 a day trading stocks is to set up a trading account.

This can be done easily through your bank, Questrade, or many other trading platforms. If you’re in Canada my personal favourite is Questrade. I’ve also heard good things about Qtrade Investor, and iTrade. TD Ameritrade is well-known in the U.S., and it has no account minimums, Interactive Brokers, Zacks Trade and Robinhood (great for options trading) are all great options. If your trading through your personal bank funding your account is relatively quick and painless, if you go through an online trade broker not connected with your personal bank, there can be a short time 3-5 days to fund your account and get going. If you’re in Canada and haven’t put any money into your TFSA – a. you’ve been really missing out and b. you’re on your way to tax-free trading! Hooray!

2. Watchlist

Have a list of stocks on your watch list that has good daily movement. My top suggestions stocks are Cannabis stocks especially if you’re in Canada. These would be (WEED, APH.TO, ACB and many more) If trading in cannabis makes you uncomfortable, then I would suggest ETFs/ETNs that move with the indexes. TQQQ on good days and SQQQ or TVIX on down days (U.S. exchange), or when you master these strategies you can play both in a day. Typically, tech stocks, oil stocks, and gold stocks have good movement, depending on what is happening in the economy. Check this glossary of terms if you are unfamiliar with the above.

3. Crunch Your Numbers – Do you have the cash to make $200 a day trading stocks?

Depending on how much money you want to start trading with you have to know what change % you need to hit to your daily $ goals. See chart below for 3 different amounts $1,000, $5000, and $10,000. If you are looking to start with a smaller amount I would suggest cryptocurrency trading as the fees are little to none. If you would like for me to provide more details on how to get started trading crypto leave a comment down below!

The problem with trying to trade $100, $500 or even $1000 is that the trading fees can kill your winnings. Most investing accounts charge $10 per trade (buy or sell), so each trade is costing you $20. There are a lot of low fee trading options, such as Questrade. Questrade has two options one fixed ($4.95/trade) or variable (1¢/ share to a max of $6.95). The best part is ETFs are free to buy and $4.95 to sell! I personally use Questrade and if you’re interested you can sign up here.

Below I included taxes that you would be paying on your monthly income to give you an apples to apples comparison.  Now 22% in a day is outrageous, please would love to make that in a year, let alone every day. So I put it in to give you some perspective on why I suggest $5,000 is where you can make some side cash and at $10,000 where you can possibly make a modest living trading.  Even 2.20% is quite hard on a daily basis but it can happen. This is also why I suggest using a trading platform that gives you better buy and sell rates.

4. Paper Trade For a Week or Better yet a Month

Sign up for a Trading View account, or another trading charting software. Stock Charts is very good as well and has a free version. Pick a strategy (see here for some options), and start playing each scenario and see which one works the best for you. I find that if you try to look at a chart after the fact then it always seems pretty obvious but when you live paper trade it gives you more insights and you can learn from your mistakes. The only downfall with paper trading is that it doesn’t factor in your emotions.

Being in control of your emotions and buying/selling emotionally rather than sticking to your trading strategy is the reason most traders fail and typically lose all their money within the first year. and you really react very differently when your money is actually on the line. It’s all about probability. Every trade is not going to work out for you. Get that straight from the beginning. All you need is for your strategy to work out 6/10 times. That’s all you need, plus a solid stop-loss. See the chart below.

If you are using something as basic as a Renko chart + VWAP to trade (see this Trading Strategy here). You would make 1.94%+4.06%-.75%+.17%+.98% for a total of 6.06%. Not bad. You didn’t make money on every trade, but the winnings balanced out the losses. The 5 trades cost you $100. This is why you need to make sure you are playing with the right amount of cash and the right trading platform. At $1000 even at making 6%, you are still in the hole. See the chart below.

Trading with $10,000 you’re up to $506. When you start beginning to get the hang of trading you would know not to sell by looking at other time frames and ride the full wave for 5.43% with a $20 trade fee or even better a $5.95 trade fee.  Your winnings would be $600 vs the $506 trading with $10,000.

If you haven’t seen a Renko chart before and are used to candlesticks, I’ll tell you why Renko is better – It smooths everything out and it takes the guesswork and the heart attacks out of the equation. Everything is green until it’s not and you look to sell. If you were to play a 3 min or even 1 min chart on regular candlesticks fear sets in and you sell, or the opposite and your so positive that it will go green again that you don’t.

The most important part of trading is not letting fear kick in and making decisions based on the strategy you’ve selected. Another word of advice – set stop losses if you are walking away from your computer. The worst thing is to sit back down and realize you’ve gone in the red. The very, very dark red.

Word to the Wise

Everyone does say that it is always best to do the long-term investments which I completely agree with. Long-term investing is a definite must and you should never be day trading with your full savings.

My Worst Trading Experience.. okay One of the Worst.

Let me tell you a story. My husband had bought XIV – ETN that is the inverse of the VIX. We would both would trade this a LOT! In fact, in 2017 we made most of our trading revenue from XIV. It was well known and was almost always on the most traded list on Nasdaq’s website. The market value of XIV was nearly $2 billion the week before this happened – It was worth $131/unit then just dropped to $4.22 overnight.

People lost millions. It all went down after hours so there was nothing you could do but to watch the value drop and drop. Not even a stop loss could save you this. Imagine putting in $50,000 in XIV that would be worth $1,607. Just the thought alone could is maddening. All in all, always diversify.

Diversify

Diversification for long-term investments and even short-term investments is a must. Don’t ever put all your eggs in one basket as darling as that one basket may look. Also, the other benefit with long term investing is dividends. Compounding and dividends are probably my two favourite words and are a must-have in your long-term investment portfolio. There’s a lot of people who live just off their dividends as crazy as that sounds but hey completely possible if you have enough cash invested.

It’s Not Easy Making $200 a Day Trading

Day/swing trading is for people who can stand it, it’s not easy or pretty and it has a very dark side. The first year I started trading, I acted like a gambler. I would freak out if I had a bad trade. It would be all bets are off and I felt like I had to make back the money the same day, as soon as possible. This thought would only make the situation worse and worse. I learned early (by losing a lot of money) that I need to stick to my strategy. If x,y, and z aren’t there then I’m not trading. If I don’t make any money that day and only have losses under my belt it’s just a bad day. There’s always tomorrow.

You can succeed at trading but only If you are able to control your emotions and stick to your strategy, but if you don’t set rules, control your emotions, and set stop losses you will be miserable and lose a ton of money. So, all in all, that’s how you can make $200 a day trading.

Don’t Blame Me, Man!

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If you have any questions or comments, I would love to hear it. Comment below!