Back to Library

Start Day Trading Now: A Quick and Easy Introduction to Making Money While Managing Your Risk

by Michael Sincere (2011)

Quick summary -- an in-depth PhD-level extended summary (10-30 pages) for this book is coming soon.

Start Day Trading Now: A Quick and Easy Introduction to Making Money While Managing Your Risk

By Michael Sincere

Quick Summary

Michael Sincere's introductory guide teaches beginners the fundamentals of day trading, covering chart reading, technical indicators, pattern interpretation, and risk management. The book provides a balanced perspective on day trading, acknowledging both its profit potential and its substantial risks. Sincere includes practical advice on setting up a trading account, choosing a broker, and making first trades, while emphasizing that successful day trading requires discipline, education, and emotional control.

Executive Summary

"Start Day Trading Now" is designed as an accessible entry point for those interested in day trading. Michael Sincere, author of several investment books including "Understanding Options" and "All About Market Indicators," breaks down the complexities of intraday trading into digestible chapters. The book is divided into two parts: Getting Started (covering the technical foundations) and What It's Really Like to Day Trade (covering the practical realities). Sincere maintains a responsible tone throughout, repeatedly warning readers about the risks while providing the tools needed to begin trading with informed awareness.

Core Thesis

Day trading is a legitimate method of generating income from the stock market, but it requires substantial education, practice, and emotional discipline before risking real capital. Success depends on mastering technical analysis, developing a rules-based approach, and managing risk rigorously. Most beginners fail because they underestimate the learning curve and overestimate their abilities.

Chapter-by-Chapter Analysis

Part 1: Getting Started

The Opening Bell: What Is Day Trading? - Defines day trading as entering and exiting positions within a single trading day. Dispels myths: day trading is not gambling, not easy money, and not suitable for everyone.

Chapter 1: Learning the Business - Covers startup requirements including choosing a broker, account minimums ($25,000 for pattern day traders), setting up a home office, and understanding order types (market, limit, stop-loss).

Chapter 2: Reading Charts - Introduces bar charts, candlestick charts, and line charts. Explains how to read price and volume data and identify basic trends.

Chapter 3: Interpreting Patterns - Covers common chart patterns including head and shoulders, double tops and bottoms, triangles, flags, and pennants. Explains how patterns signal potential price movements.

Chapter 4: Using Technical Indicators - Introduces moving averages, MACD, RSI, stochastics, Bollinger Bands, and volume indicators. Explains overbought and oversold conditions.

Chapter 5: Making Your First Day Trade - Step-by-step guide to executing a day trade, from screening for candidates to entry, management, and exit.

Part 2: What It's Really Like to Day Trade

Chapter 6: One Bad Trade - Illustrates through narrative how a single undisciplined trade can wipe out days or weeks of profits. Emphasizes the importance of stop losses.

Chapter 7: Meeting the Pros - Profiles professional day traders and their strategies, providing realistic expectations about the profession.

Chapter 8: Doing Your Homework - Outlines the daily preparation routine of successful day traders, including pre-market analysis, watchlist creation, and post-market review.

The Closing Bell: Going Forward - Summarizes key lessons and provides guidance for continued education and development.

Key Concepts and Terminology

  • Pattern Day Trader: SEC designation for those making four or more day trades in five business days, requiring $25,000 minimum account balance
  • Scalping: Making profits on very small price movements over brief periods
  • Mental Stop: A stop-loss level kept in the trader's mind rather than entered as an order
  • Risk-Reward Ratio: The relationship between potential loss and potential gain on a trade
  • Slippage: The difference between expected execution price and actual fill price

Practical Applications

  1. Begin with paper trading (simulated trades) before risking real capital
  2. Establish and follow strict stop-loss rules on every trade
  3. Start with small position sizes and scale up gradually as skills develop
  4. Keep a detailed trading journal to track performance and identify patterns
  5. Develop daily checklists for pre-market preparation and post-market review
  6. Never risk more than 1-2 percent of trading capital on a single trade

Critical Assessment

The book excels as an introductory primer, covering a broad range of topics at an accessible level. However, its brevity means that no topic receives deep treatment, and experienced traders will find little new material. The book could benefit from more detailed discussion of trading psychology and more concrete trade examples. The responsible tone regarding risk is commendable and unusual for day trading literature.

Key Quotes

  • "The goal is to make a trade and exit with a profit -- the sooner the better -- and still get a good night's sleep."
  • "My ultimate goal is to teach you to become a better trader while helping you to manage risk."

Conclusion

"Start Day Trading Now" fulfills its promise as a quick and easy introduction to day trading. It provides a solid foundation of knowledge for beginners while maintaining honest expectations about the challenges ahead. The book is best used as a starting point rather than a comprehensive guide, and readers should plan to supplement it with deeper study in specific areas.