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The Truth About Day Trading Stocks
A candid guide to navigating today’s stock market as a day trader
Day trading carries the potential for significant financial losses, making it one of the riskiest pursuits in the financial world. Anyone considering it must carefully weigh the possible ways to lose—and how to minimize or avoid them. Yet, many newcomers jump in with unrealistic hopes, unaware of the discipline and persistence needed to succeed. Author Josh DiPietro warns that flashy seminars and expensive software are no substitute for cultivating self-control, consistency, and the endurance to stay active for the long term. In The Truth About Day Trading Stocks, DiPietro delivers an unfiltered look at the dangers of day trading—and practical tips to sidestep them.
With a conversational and sometimes witty style, DiPietro shares lessons from his own trading career, challenging the popular “get rich quick” formulas that lure amateurs into costly mistakes. He aims to temper the impulsive excitement common among beginners, showing how to develop into a steady, professional trader while protecting your capital. This book highlights how emotions influence trading decisions and underscores the importance of self-awareness, risk management, and gradual skill building—reminding readers that learning never stops.
After debunking common myths, DiPietro moves into practical guidance, such as comparing pay-per-trade versus pay-per-share brokers, explaining when each is advantageous, and offering tips to prevent seemingly perfect trades from turning into losses. He also includes a final “Rules to Remember” section, featuring over eighty concise, easy-to-follow rules designed to help amateur traders improve their performance.
Throughout, DiPietro reflects on the personal growth and heightened self-awareness he developed in pursuit of success. His ultimate goal is to guide readers toward building a disciplined mindset they can apply to crafting their own profitable trading strategy.
ABOUT THE AUTHOR
Josh DiPietro has been actively day trading stocks for a decade. He runs a website and offers training programs tailored for aspiring traders. His trading method focuses on making multiple trades each day, aiming for modest profits, cutting losing positions quickly, and keeping transaction costs low. A vocal critic of the mainstream trading education industry, DiPietro is committed to providing a more realistic and practical learning path for those entering the world of day trading.
TABLE OF CONTENTS
Preface xiii
Acknowledgments xvii
Introduction: The Wholehearted Amateur 1
Part I Psychological Truths and What to Do about Them 5
Chapter 1 Truths about Yourself to Know First 7
How Often Do You Trade, and How Profitably? 10
How Much Are You Trading in Capital and Leverage? 10
How Long Have You Been Trading? 12
What Financial Instruments Are You Trading? 13
Are You Trading Other Peoples’ Money or Your Personal Capital? 13
Are You a Licensed Trader, or Trading Independently? 13
How Were You Trained? 14
Rules to Remember 14
Chapter 2 How Emotions Can Destroy a Trade 15
The Fear Factor 16
Greed Is Not Good 18
Rules to Remember 21
Chapter 3 Preventing Overconfidence 23
Ignoring Your Predetermined Stop/Loss Price 24
Holding Too Long 24
Rules to Remember 26
Chapter 4 From Impatient to Cool, Calm, and Collected 27
The Waiting Is the Hardest Part 29
Deciding to Learn More 31
Rules to Remember 33
Chapter 5 Taking Breaks 35
Break When Your Confidence Is Low 38
Break Because It’s Just Not Working 38
Break and Then What? 39
Rules to Remember 42
Part II The Truth about Your Risk 43
Chapter 6 The Importance of Risk Management 45
The Amount of Trading Capital Allocated to Each Trade 46
The Timing for Allocating Capital to a Trade 47
Overexposure to Risk 48
The Stock or Company You’re Trading 49
The Time of Day You’re Trading 49
Gambling 50
Rules to Remember 51
Chapter 7 Why Overexposure to the Market Can Hurt 53
Time versus Timing 54
Rules to Remember 58
Chapter 8 Budgeting: Knowing Your Financial Limitations 59
Don’t Quit Your Day Job: Catch- 22 60
Crunching the Numbers 62
Cushion Cash 63
Rules to Remember 64
Chapter 9 Minimizing Your Risk with Stop/Loss 65
Making Stop/Loss Automatic 65
Rules to Remember 71
Chapter 10 Averaging-Down: A Skilled Strategy 73
To Average-Down Successfully Takes Mastery 74
Know-How Doesn’t Grow Overnight 75
Rules to Remember 77
Chapter 11 Gambling versus Day Trading 79
Rules to Remember 82
Part III Intraday Trading Truths 83
Chapter 12 Why Some Traders Make More Mistakes 85
Pick Your Stocks Carefully 86
Focus, Focus, Focus 87
Pay Attention to Market-Moving News 90
Rules to Remember 91
Chapter 13 Trading Consistently All Day 93
Rules to Remember 98
Chapter 14 Stock Picking: Simplifying the Process 99
Your Stock Should Have an Average Daily Volume of One Million Shares or More 100
Choose Stocks between $10 and $ 100 101
Pick Stocks That Display Tradable Intraday Price Swings 102
Don’t Trade Stocks Affected by Strict Federal Regulations 102
Beware of Stocks Directly Affected by Current News Headlines 104
Rules to Remember 105
Chapter 15 Why News Can Be Just Noise 107
Trading on News versus Monitoring News 109
Rules to Remember 111
Part IV The Truth about Training and Preparation 113
Chapter 16 About Those Training Programs 115
Seminars for the Greenhorns 116
Training Programs for the More Experienced Trader 119
Tips for Selecting the Right Program 120
Rules to Remember 123
Chapter 17 Picking the Right Online Broker: Pay-per-Share versus Pay-per-Trade 125
Starting Out with Pay-per-Trade 125
Transitioning to Pay-per-Share 126
High Leverage Pros and Cons 130
Hang on to Your Pay-per-Trade Account 131
Rules to Remember 132
Chapter 18 Paper-Trading Strategy 133
Paper Trading for the Amateur 134
A Word about Advanced Paper Trading 139
Rules to Remember 140
Chapter 19 Trading for Skill versus Trading for Income 141
Building a Foundation of Trading Skills 141
First Level 144
Second Level 146
Third Level 147
Summary 148
Rules to Remember 150
Chapter 20 The Perfect Trading Day 151
Early Morning Activities 151
Pre-market Trading 153
The Opening Bell 156
Midday Activities 157
The Last Hour of Trading 159
The Closing Bell 160
After-Market Trading 160
Homework 161
Chapter 21 The Worst Trading Day 163
Early Morning Activities 163
Premarket Trading 164
The Opening Bell 166
Midday Activities 166
Last Hour of Trading 167
The Closing Bell 168
After-Market Trading 168
Homework 169
Conclusion: Parting Words 171
Appendix: Rules to Remember 175
About the Author 181
Index 183
