Good morning, traders…
When the opening bell rings, it’s a fresh slate.
Day trading focuses entirely on the present. Every day is a new opportunity.
But this has pros and cons.
On the one hand, it’s cathartic to let go of the past and be entirely “in the moment.”
When you’re day trading well, you can enter a true “flow state,” which feels amazing.
Like you just popped the Limitless pill…
On the other hand, that daily restart is a double-edged sword.
If you’re feeling slightly off that day, or the overall market trend is working against your open positions, day trading can feel like a long slog towards an unclear destination.
But there’s an easy way to avoid this…
I use a simple, 7-step framework to guide my day trading. I have these steps posted on a piece of paper that stays in clear view on my desk.
Let Me Show You The “7 P’s” That Every Day Trader Needs…
1. Perspective
Perspective starts with identifying the market’s overall trend. The trend is your friend.
If the major indexes are gapping up, the expectation should lean bullish. If they’re gapping down, the mindset shifts to bearish.
After looking at the broader market, identify trends in the individual stocks on your watchlist.
This helps focus on what is happening on the charts, rather than getting caught up in personal predictions or hopes.
REMEMBER: Making money is more important than being right.
2. Preparation
Before the market opens, preparation is key.
Your charts should be marked with essential zones and key price levels:
- Important support and resistance levels
- Key psychological levels (round numbers that often act as price magnets)
I may occasionally sound like a broken record talking about key levels, but there’s a reason I harp on it…
These levels set the foundation for a trading plan, so you’re ready to go when the market presents opportunities.
Why don’t we wait to do this? Because missing a move due to laziness can cost you a lot of money.
3. Process
Next, you must identify stocks likely to move soon, either with the broader market or independently.
For me, this means using my OMEN Scanner to follow the Smart Money.
Large, short-term options bets on my scanners tell me what major insiders are betting on in the market.
Combining Smart Money moves with technical analysis creates powerful setups.
Technically, I’m looking for breakouts through resistance levels and pullbacks to support levels.
4. Plan
A solid process naturally leads to a well-defined plan for each trade.
This includes clear decisions on:
- Profit targets — the levels where gains will be locked in…
- Risk levels (stop losses) — the levels where losses will be cut…
Having these parameters in place helps remove emotion from your trading decisions.
If your levels are already pre-determined before you enter the trade, there are no guessing games once you’re actively in the position.
5. Patience
Patience is a virtue for any day trader.
Gains usually don’t appear the moment you enter a position, and your ideal setups may not present themselves as soon as you turn your screens on in the morning.
This means waiting for setups that align with the preparation and process steps. It also means sticking to the plan, allowing trades to play out, and giving winning trades the room they need to run.
Impulse decisions (like chasing trades without preparation or closing winners too early) are easily avoided by simply being patient and trusting your plan.
6. Protect
If you don’t protect the capital you have, your winning trades will get canceled out by poor risk management.
Protecting your account balance and unrealized profits ensures longevity in the markets. It will also help you stay confident, controlled, and disciplined.
- Scale-out of your winners at pre-determined levels…
- Employ strict risk management on losing positions…
- Be downright religious about your stop-losses (don’t move them lower)…
7. Post-Trade Review
Every trading day should end with self-reflection. Once the market’s closed, it’s time to think about your performance on the day.
This means reviewing trades, taking screenshots of charts, and analyzing your successes and failures.
Every win (and loss) carries a lesson. You want to lean into the decisions that led to wins and minimize the ones that led to losses.
I follow the 7 P’s every single day.
Start doing the same.
Happy day trading,
Ben Sturgill
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*Past performance does not indicate future results
