2. WELCOME TO GIA DAY 2, WEEK 1
FUNDAMENTALS OF TRADING
• Learn How to Read the Chart for Successful Trading - Week 2 we will get more in depth into this
but understanding the charts, Technical Analysis, is important to your success for a trader.
• Learn Trading with Sound Money Management - Protect your capital, once you lose all of your
capital, you’re out the game. We trade with 20-30% of our portfolio on any given trade, with
consistency this works. STAY IN THE GAME!!!
• Develop a Trading Plan – Sit down and compile a trading plan. Every trade you get into there needs
to be a step by step plan. DON’T GO IN BLIND!
• Understand the Mental Game of Trading - Trading is mostly mental so keep your emotions and
mind in check. Not having your emotion under control can cause unforced errors that will cost you
your capital.
• The Trend is your friend – This is so important to understand because if you don’t you will have many
loses. If you see a trend and it is clear don’t fight it, ride the wave and enjoy the ride. We’ll go more in
depth into this in week 2.
• Practice Trading – Practice, practice, & more practice. Patience too! You won’t become a profitable
trader overnight. You should practice as much as possible and use this course as a kickstart to
understanding how to be profitable. You have to put the work in, we just make it a little easier
3. • Disbelief- After previous losses, the fear of losing more money
outweighs all else.
• Uncertainty- The herd hesitates and misses the optimal w
• Optimism- The herd's sentiment begins to warm, only after prices
have risen.
• Enthusiasm- Market demand jumps as the herd rushes in to buy.
• Euphoria- Investors share a collective dopamine rush as markets
peak.
• Overconfidence- The herd continues to increase their position
despite high valuations.
• Anxiety- Fear sets in as losses begin to mount.
• Denial- Investors ignore the warning signs as market demand
weakens.
• Panic- Prices plummet as the herd rushes to sell.
• Capitulation- The herd accepts its losses and completely exits the
market.
• AGONY- Steep losses take a psychological toll on many investors,
and the sentiment cycle restarts
• DEPRESSION- The herd is indifferent as markets inevitably begin
their recovery time.
5. WELCOME TO GIA DAY 2, WEEK 1
MARKET PSYCHOLOGY & EMOTION
• Keep your emotion under control.
• You cannot behave as the market does, as a successful trader we want to
beat the market so we behave inverse to it.
• Letting your emotions take control can cause you to make bad trading
decisions and make costly mistakes.
• Remember, protect your capital at all cost!!
• STAY IN THE GAME!
6. WELCOME TO GIA DAY 2, WEEK 1
TYPES OF TRADING: DAY TRADING
• Day traders are active traders who execute intraday trading
strategies to profit from a given stock price changes.
• Day trading employs a wide variety of techniques and strategies
to capitalize on perceived market inefficiencies.
• Day trading is often characterized by technical analysis and
requires a high degree of self-discipline and objectivity.
• We use high amounts of leverage and short-term trading
strategies to capitalize on small price movements that occur in
highly liquid stocks or currencies
7. WELCOME TO GIA DAY 2, WEEK 1
TYPES OF TRADING: DAY TRADING
• Scalping: This strategy attempts to make numerous small profits on small
price changes throughout the day.
• Range Trading: This strategy primarily uses support and resistance levels to
determine buy and sell decisions.
• News-based trading: This strategy typically seizes trading opportunities
from the heightened volatility around news events.
• Bounces: This strategy uses key supply and demand zones to seize profits
from pull backs in a upward moving security.
• Rejections: This strategy uses key supply and demand zones to seize profits
from pull backs in a downward moving security.
8. WELCOME TO GIA DAY 2, WEEK 1
TYPES OF TRADING: SWING TRADING
• Swing trading involves taking trades that last a couple of days up to several
months in order to profit from an anticipated price move.
• Swing trading exposes a trader to overnight and weekend risk, where the
price could gap and open the following session at a substantially different
price.
• Swing traders can take profits utilizing an established risk/reward ratio based
on a stop loss and profit target, or they can take profits or losses based on a
technical indicator or price action movements.
• The goal of swing trading is to capture a chunk of a potential price move. While
some traders seek out volatile stocks with lots of movement, others may prefer
more sedate stocks.
9. WELCOME TO GIA DAY 2, WEEK 1
TYPES OF TRADING: DAY TRADING VS
SWING TRADING.
• The difference between Day and Swing trading is, mostly, the holding time for
positions. Swing trading involves at least one overnight hold, whereas day traders
close out positions before market close. In general, day trading positions are limited
to a single day while swing trading involves holding for several days to weeks.
• By holding overnight, the swing trader incurs the unpredictability of overnight risk
such as gaps up or down against the position. By taking on the overnight risk, swing
trades are usually done with a smaller position size compared to day trading.
10. WELCOME TO GIA DAY 2, WEEK 1
TYPES OF TRADING: LONG TERM
• Long-term investors are generally willing to take on more risk for higher rewards.
• These are different from short-term investments, which are meant to be sold within
a year.
• Being a long-term investor means that you are willing to accept a certain amount of
risk in pursuit of potentially higher rewards and that you can afford to be patient for
a longer period of time. It also suggests that you have enough capital available to
afford to tie up a set amount for a long period of time.
