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1. Does Day Trading Work And Can I Make Money Trading? Transcript
1. Title Slide
2. Hello everyone, this is Roger Scott and I have another video tutorial for you
today. Before I forget please subscribe to our video channel and visit
MarketGeeks.com for your free trading report.
3. I have been training traders for a very long time now and one question I get
asked daily for the last decade is "does day trading work and can I make money
trading". Over the last several years my answer has slowly changed when
traders ask me this question and I will explain to you in this tutorial why that is.
Most traders want a simple yes or no answer but unfortunately as most good
questions the answer is not that simple.
4. As most things in life trading can be a very simple process, all you have to do is
enter position and leave it alone if it goes your way or liquidate your position if it
doesn't. At the same time trading can be an unimaginable difficult process where
average people are forced to learn advanced computer algorithms and
understand the inner workings of network servers and lastly master neural
networks so they can predict the price of the futures contract 3 seconds ahead of
time. You may also have to learn bet sizing techniques that require a PH.D in
statistics if your method calls for that type of technique.
5. What I just presented was two extreme examples of achieving the exact same
result which is profitability. Ultimately this is why people get interested in trading
and this is why people continue trading, to make money. So before you begin
your journey to learn how to trade profitably, I want to give you the two of the
most important factors that determine your success or failure. If you master these
two factors alone you can be an extremely profitable trader without knowing
anything else. However, if you don't learn and focus your attention on these two
factors your career as a trader will be very short lived.
6. Trading is based on simple math. Your winners have to be either bigger than
your losers or your percentage of winners has to be much higher than your
losers. There is no other way you can be profitable if you do not fall into one of
these two categories. The way traders express these two categories is positive
expectancy. Your trading method must have a positive expectation of profit in
order for you to make more money than you lose.
7. The formula to test your expectancy is very simple and it should be the first and
last thing on your mind when you pick and choose different trading methods and
more so when you’re actually trading them. To calculate expectancy answer the
following questions.
 What percent of your total trades are Winning trades?
 What percent of your total trades are Losing trades?

2.  The Average amount that you win in all your Winning trades?
 The Average amount that you lose in all your Losing trades?
Once you gather all of your data you simply plug the numbers into this simple
formula (Average Winner x Win Rate) – (Average Loser x Loss Rate)
8. This will tell you exactly what your average expectation of profit should be over
the long term based on your trading method. For example let's say your method
wins 50 percent and you make $2.00 every time you win and the other 50% you
lose $1.00. You would multiply $2.00*.50% and that would produce $1.00 and
then we would multiple the losing side which would be $1.00*50% and that would
produce $.50. You would then subtract $.50 from your dollar and your
expectancy would be positive $.50. This means for every dollar you risk you get
your dollar back plus $.50 cents. The higher your number will be assuming it's a
positive number the higher your expectancy will be and the better your method
will be. If you find that your expectancy is negative then you are slowly losing
money overtime and if your number positive you are making money over time.
Take your past trades and apply this example to see how your expectancy adds
up.
9. I hate to say it but the biggest reason aside from methods that don't produce
positive expectancy that traders don't succeed is because of how they interpret
and react to financial markets. Psychology is absolutely on par with Expectancy
as being the biggest cause of traders failing.
10. Most people starting out have problems holding on to winners and cutting losers
quickly. When beginners see their position profitable they fear the position will go
against them and the profits will disappear and when positions go against them
they hope that the position will come back to their entry price so that they can
liquidate it. Professional traders do the opposite when positions go their way they
hope that it will continue moving further and when positions go against them they
fear that the position will continue going against them and liquidate it quickly.
Notice the difference in the thought process between the beginner and the
professional trader. In case you missed it the beginner thinks completely
opposite of the professional trader. This occurs because people are naturally
wired to lose money because of how our mind works and professional traders
have to reprogram that part of their mind so that their naturally wired thought
process that works outside of trading doesn't affect their trading.
11.I hope you understand that successful trading is about mastering two
fundamental skills that can develop and can be improved with time. How much
time you devote to developing positive expectancy and proper trading
psychology will directly influence your bottom line. I hope this tutorial provides
you with enough guidance to take steps to improve these two areas in your
trading.

3. 12.That’s it for today’s video tutorial. Don’t forget to subscribe to our video channel
for trading videos and trading tips and visit marketgeeks.com for your free trading
report. This is roger Scott wishing you the very best in your trading.
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