Table of Contents

1. Different Types of Trading

2. How to Develop a Trading Plan
3. Strategies
4. Technical Analysis Patterns
5. Risk Management
6. Timeframes
7. Indicators
8. Psychology (Emotional Control)
9. No Bias
10. Conclusion/About Me
 Copyright © 2022 by Derrold Barry

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DISCLAIMER

Greetings, Before I dive into this guide I want to set a precedent here.

I am NOT A FINANCIAL ADVISOR, and none of the information you ever

receive from me that has to do with the stock market or any other equities
markets is investment advice.

I am not liable for you making a bad decision with your own money. Take
accountability for your actions. This is a must if you want to become a good
trader and do this long term. This guide is created for the intention of helping
you better understand how to read the markets, identify patterns, create a
training plan, and ultimately become your own independent thinker and trader
on a day-to-day basis.

ONLY RISK WHAT YOU ARE WILLING TO LOSE! This profession is risky, it is
absolutely inevitable that you are going to lose money. If you’re not willing to
accept that, DO NOT TRADE. But if you ARE willing to accept this, then be
ready to take some humble hits in the beginning of your journey to mastery.
Start small and slow so you don’t blow through important money in your life
and don’t get destroyed and depressed like I and a lot of others have in the
past.

Leave your ego at the door and stop thinking about getting rich quick, even if
you’re a smart individual and you’re very good at things and feel that you’ll
get this quick, you more than likely will not and having that arrogance will
cause you to make some decisions that will blow your accounts. Trust me I
have done all of these things.
 1. DIFFERENT TYPES OF TRADING

What is day trading?

Being a day trader, means you are a person who buys and sells into a position
(whether that is an option, or buying shares of a stock) and selling them within
the same day.

A day trade can be anywhere from 3 minutes to 6 hours. Anything more would
be considered a swing, and anything less would be considered a scalp.

There is a difference between them all, and different strategies when it comes
to trading them which I will get into.

A scalper is a person who enters a position for a very short amount of time,
typically from 5 seconds all the way up to 3 minutes, who is looking for a very
quick move in the stock’s price. A scalper usually enters their position with a
high amount of capital/risk, in order to take quick profits off that quick move.

In order to be a profitable scalper, it is recommended you have a good

understanding of price action, technical patterns, how to execute, and a good
amount of money preserved for comfort.

I personally am not a scalper, I day trade and swing trade. I find it easier to
manage my positions when I have a longer time frame that I am working with
and smaller size / less capital at risk in each play. Then there is swing trading.
Which can be defined as holding a position for more than one trading day
session and up to a month's time. Over a month would be considered an
“investment.”

Example: A simple overnight hold and selling the next day is also considered a
swing trade.

Pro Tip: For those who are learning in the beginning 1-2 years of their trading
journey, I highly recommend studying strategies that have to do with longer
holds like swings, and day trades. Once you have learned the basics and have a
true visual understanding of everything you are looking at on the screen of
your trading platform. As long as you have been consistent for some months
and are actually profitable, that is when I would recommend learning to
become a scalper. But to each its own, if you want to take on that risk early,
more power to you.
 2. HOW TO DEVELOP A TRADING PLAN

I recommend watching no more than 2 stocks each day, all day. There are
hundreds of stocks out there and hundreds of opportunities but every stock
will present an opportunity each day at a different time of the day.

So waiting patiently for the exact levels to break or pattern to break that you
are focused on will lead you to becoming a better, more successful trader.

Whenever I come into the market I have a trading plan that I have created
during the pre market hours each morning. I plot specific levels that I know are
important that if they break I am watching for a continuation move through
that level. This is the time I’m trying to capitalize on.

Patience is the name of this game and is something I will continually preach
through this guide to get the concept ingrained in your brains.

What a lot of traders will do is once that opening bell rings they will have too
much going on on their screens at one time. This will cause your mind to
overthink. Then panic begins to set in.. then you will miss plays that you
should have been paying full attention to which will then cause fomo (fear of
missing out) which will then cause.. you guessed it BAD TRADES!
 3. STRATEGIES

Support and Resistance / Supply and Demand / Ranges / Gaps

Support and resistance levels are areas on the stock chart that you notice the
price will make a high at and get rejected multiple times, or make a low at and
bounce multiple times.
It is important to note that support and resistance lines are never perfect price
points. They usually are ranges or zones, which are areas of price that act as
support and resistance. Which are considered supply and demand zones.
Some people like to trade using lines specifically like myself but others like to
draw the whole area out into zones that they see price is getting rejected at.
This is a good strategy that can be very effective.

I used to use this strategy in the past for long term holds and I find it best
when pairing it with longer time frame charts and identifying swing trade
opportunities. What price action does when it comes to these support and
resistance levels or these zones is it will use these levels on the chart in a way I
like to call “stair stepping.”
When resistance is broken through and becomes support, it’s as if the stock is
going up to the next stair and using that old resistance level as the bottom
step. And vice versa. When support breaks through and the stock sells off it’ll
sell off to an old support level. That level that was acting as a support level just
previous, will now act as a roof and be a resistance.

One thing you can do on your charts when you’re identifying these supply and
demand zones is color them red and green. This gives you a mental picture to
remember that when price approaches that zone you know either to sell, or
buy into a position. Here are a few examples of support and resistance levels as
well as some examples of supply and demand zones being respected on the
chart.
Once buyers and sellers establish these levels, they continue to serve as areas
on the chart where both buyers and sellers will take positions based on the
reaction at these levels.

Experienced traders are trading the same patterns over and over and
capitalizing on these moves

RANGES

Similarly to support and resistance levels the range strategy is a strategy that
works amazingly with identifying trending stocks over an amount of days or
weeks of time. Patiently waiting for the range to break to either side and taking
plays based on that move is extremely effective.

Here are some examples of ranges for different periods of times where the
stock continued to get sold every time the top was approached, and brought up
everytime the bottom approached.
Eventually this range was broken out when there was an imbalance of buyers
and sellers and one side won the fight.

This is a great technique that works well with every timeframe trading strategy
but most effective with Day trades, and swings. The 15 minute,30 minute,1HR,
and 4HR Charts are the easiest to identify ranges on.
GAPS

The gap strategy is a very effective strategy that I love and many traders love
to trade. Occasionally a stock will gap up or gap down overnight in the
premarket session leaving a floating “missing” area on the chart which we call
GAPS.

When the stock leaves this gap there’s a high probability, about 80% or better,
that the stock will “fill” that gap. Which basically means will retrace back
through the range of that gap so the chart will not have a missing piece.
This is what we call a gap in the market.

When Imagining a stock, imagine a huge snake that is constantly forming each
and every day. The next piece and formation on the snake is forming and if
there’s a missing gap, then the snake won’t be complete. It will have to come
back and correct itself so there’s no missing gaps. Now gaps won’t always fill,
some gaps won’t fill for months or years. Especially ones that are on bigger
time frame charts like the daily or weekly, but gaps on the 5/15 minute charts
are the most beneficial for day trading because they usually fill the same day or
later that same week.

Here's an example of a gap that was left on the hourly chart. As you can see
price attempted to run north, but inevitably that missing gap acted as a
magnet for price and the “game” was incomplete unless the range was filled.
 4. TECHNICAL ANALYSIS PATTERNS

Here are a bunch of different chart patterns that you must study! Change the
screensaver on your computers, phones, everything. Brainwash yourself with
this shit literally. You have to start engraving these patterns into your mind so
much that you just naturally start seeing it play out in real time on the stocks.
Studying these patterns for hundreds and thousands of hours over the years..
honestly, has been the key to my success.

Draw these patterns in the market over and over again, hundreds of times.
Until they become a part of what you see. These patterns are recurring
everyday. After months of time you will be able to identify these patterns
before they are finished forming giving yourself an edge over other traders
being able to execute traders early and catching the best entry points with the
least risk. Every trade I make personally is done by identifying one of these
patterns and waiting for proper levels to break and confirmation.
This is the exact picture that is still the picture of my screensaver and has been
since 2019 when I began trading, I never changed it. I always look at this
everyday and it’s beyond ingrained in my head. If you want to be a real trader
you have to truly give your full life and commitment to this shit. I’m ranting at
this point but I’m trying to get you to truly feel what I feel when writing this.
My transparency with you all is how I’m going to connect with you the best. I
have devoted MY ENTIRE LIFE to studying the market for the last 3 years
because this will be the key to my financial freedom and now that I understand
how to perform, I’m here to give this information to you all.

When studying these patterns go back into charts and draw them out yourself,
get better at identifying all the patterns when you are studying the closed
market.

After practicing, go back and trade in “on demand trading” on TD Ameritrade

Think or Swim platform. If you’re not familiar with what this is, it’s paper
trading.(Trading with paper money where you practice in the markets.)
Here is a YouTube video how to set this up

(How to Set Up TD Ameritrade Think or Swim)

Video 1: https://www.youtube.com/watch?v=KzSQVfuQBcc

Video 2: https://www.youtube.com/watch?v=X7u930csrAo

Video 3: https://www.youtube.com/watch?v=NxUSoQSTW-U

On Demand Trading https://www.youtube.com/watch?v=WENq0HKcDF0

After spending a few weeks/months of time trading with paper money, that’s
when I would recommend making a deposit and getting into the game. This is
if you have never traded before and are a pure beginner. If you already have a
funded trading account you can skip this paper trading step.

Technical analysis is the whole game itself. Once you master being able to
‘read the charts’ and are able to see these patterns all over the place you can
take these skills and apply them to any equities market there is. Crypto and
Forex operate the EXACT SAME WAY.

I trade these markets as well with these skills and am able to diversify the
streams of income and how much I can trade each week since both these
markets are open for more hours then the regular stock market.
If you want to get good at anything in this life you must devote an extreme
amount of time and discipline into wanting to get better at whatever it is you
want to do. With trading you have to be ready to grind and fall in love with that
grind. The amount of information you’ll learn in one year of investing, will be
like 5 years of financial advice you wished you learned earlier in life. This has
to be one of the most humbling career paths to ever choose. Even the most
experienced of traders take huge losses and are slapped back into reality every
once in a while that no matter how good they think they’ve become, the
market is a battlefield that you need to be on top of your toes within. Only the
most resilient will survive.

According to businessinsider, only 6% of traders who attempt to become Daytrades,

actually can profitability succeed in this field.

https://www.businessinsider.com/what-percentage-of-traders-make-it-201
1-6

If you want to be the exception, you have to put the time in this like if you’re
going to school to learn a brand new profession. This isn't some lucky little
trade skill that anyone can understand. Only those who really want it will get it.
Losers lose and winners win. Those who put the time in will see the benefits
and learn the game but it’s going to honestly take a lot of sacrifices from you
as an individual to get to the point where you can fully understand this.

I’ve sacrificed friends, family, relationships, school, experiences, and

ultimately time. To get into the mental
space required to become a successful trader and those who have made it to
this point say the same thing and all can relate. Every successful trader I’ve
ever heard from or learned about their journey has explained there are many
sacrifices that will be made.

Just like with anything else you do there's always going to be an opportunity
cost.
 5. RISK MANAGEMENT

After learning all the basics of how to read and understand the markets and
what stocks are. Before getting into live trading it’s important to learn what
risk management is, what it means, and how to apply it to your trading.

This is #1 THE MOST IMPORTANT THING

Risk management is going to be your key to developing a daily trading rule and
executing successfully. You have to understand how much money you are
putting into each trade you take, and the amount of risk you

are looking to take on. Risk can be seen as the loss you are willing to accept in
each trade.

For example, If the position you’re holding is worth $100, and you are looking
to risk a max of 10%, then the max amount of $ you’ll be willing to lose on that
play is $10.

Learning simple percentage math equations and learning to do them in your

head is a skill I recommend everyone learn how to do. Doing 10/20/30% math
equations in your head will allow you to quickly assess the risk of your
positions. Otherwise you will have to manually write this out in your trading
plan each day, which is fine too.
STOP LOSS

For options trading and any position holding, I have a max 10-15% stop on all
my positions, no matter what. I will not allow myself to lose more than 15% of
the initial capital invested into the position.

So for example, If the trade cost me $300 to enter, I won’t lose more than
$30-45 max on that position.

Now that I have my max loss amount setup, I’m looking to take profits of
anything more than 15-20% and higher.

By doing this over time I’m inevitably going to be profitable if I’m making
more than I lose and I’m also not losing very often.

So the goal is to develop a strategy that can be as close to 100% effective as

possible while having a positive risk to reward ratio.

Right now my trading consistency is about 80-85% with a minimum 2/1 risk to
reward ratio. So at the end of the week, though I may lose 15-20% of my
trades, not only do I win 80-85% but the winners are at least double the profit
of the losers. So I’m able to consistently build my portfolio.

Compounding gains > Anything else.

This is just one example of how to build a risk to reward strategy, but
recommended at minimum you want to aim for 2/1.
Having a proper risk management structure in your trading is what is going to
enable you to become consistently profitable while not losing too much money.
You have to develop a strong level of discipline to stick true to your trading
plan each day.
 6. TIMEFRAMES

Here I will explain to you the importance of multiple timeframes when reading
the overall price and direction of a chart. While also explaining how I use each
timeframe with the different trading strategies.

Different timeframes are important when trading and trying to learn to

understand the true direction of the stock because every timeframe has
different levels of importance. For example, if you only traded using the 5
minute chart you would be limited to only seeing the key support and
resistance levels on that timeframe. The problem with that is there might be a
stronger, more important higher timeframe level that you aren't able to see.
The bigger the timeframes level the stronger and more important it is.

For My Strategies:

Daytrades - I use the 5min/15min chart combo

Swing Trades - I use the 1hr/4HR chart combo

Investments - I use the Daily chart, the Weekly chart, and the Monthly chart
to determine my longest holding positions.

(Daily)
(Weekly)

(Monthly)

I also have two monitors at my home setup when trading so I can have all the
time frames side by side. But this isn't needed as you can split the view onto
one screen and watch both timeframes there. When you see technical patterns
on the charts you will see the same patterns on all timeframes.

The importance of bigger time frame charts is you get to really see the
direction and sentiment in the movement of the stock you’re watching.
Figuring out what trading strategy you want to use is going to determine the
time frame charts you are going to be paying attention to the most.
 7. INDICATORS

Here I will explain what indicators I use on the charts. Before I get into that I
must note that indicators are NOT NEEDED when trading.

Plenty of people are able to read price action purely off each bar and don’t need
any indicators on their charts. That's good for them but I like to use a few that
help me understand the strength and weakness of the stock and when buyers
or sellers have control of the price action.

I only use 4 indicators and they will be the only ones I speak about in my
strategies. In my later content I can get into all the indicators there are and
what each of them are useful for, but after experimenting with 10-15 different
indicators over the years i’ve noticed that I only need 3-4 in my strategies to
read the market the most successfully.

I use 3 different exponential moving averages, and the MACD.

I do not use simple moving averages.

After extensive review from personal experience and YouTube videos I've
watched over the years, the exponential moving average is a much more
responsive moving average that correlates with the strength or weakness in
price as close to real time as possible. While the simple moving average is
much more delayed.
The 3 Exponential Moving Averages or (EMA’s for short) I use are the 9, 21,
and 200.

9 IS BLUE

21 IS YELLOW

200 IS RED

(This is just my personal color combination I’ve always used, you can use
whatever works best for you visually and what you like)

The 9 ema is the most reactive to price action per bar that is forming and holds
the closest to each bar that is formed. When price is holding above the 9ema
that means buyers are in control of that bar, when price is holding under the
9ema that means sellers are in control of that bar.
Next is the 21 ema, this ema holds a bit further from bars that are forming but
when paired with the 9ema, act as a great middle range indication when price
is about to change trends.

When the 9 is holding above the 21 the price is in the buyer's control and shows
strength. When the 9 is underneath the 21 this is an indication that sellers are
in control of the prices trend.

NOW the big and most important ema of the 3 is the 200 EMA. Though this is
the least reactive ema to price in real time and holds the furthest away from
where bars are, it holds the most importance to show which side of the trend
the stocks is really holding long term.
When price is underneath the 200 EMA I know that sellers have full control of
price on the day. No matter if the 9/21 are in a bullish trend, I will NOT take a
long position because there’s a high probability that the trend will end in a
rejection and sellers will take back control/reversal.
When the price is holding above the 200 EMA, I’m always looking for long
positions. I'm usually not taking any short positions because I know they
won’t last for long and eventually buyers will take control of price again.

The only acceptance to this rule is if the volume on the price is extremely high.
This is probably the most important indicator there is in the entire stock
market. That’s just my opinion personally but over the last 3 years I’ve never
found a more important and needed one.

When using all 3 of these emas in unison together. I get to truly see how price
is trending and use the emas to my advantage to know when price is changing
trend, and I may need to exit my positions.
As seen in the pictures below, this is the 3 ema bull split (when buyers have
fresh control), and 3 ema bear split (when sellers have fresh control). This is
the strategy I have developed and use every day in the markets.

Now there’s one more indicator that I use on my charts that goes on the
bottom of my chart near my volume bars. This is called the MACD; which
stands for Moving Average Convergence Divergence: (this indicator is a trend
following momentum indicator that shows the relationship between two
moving averages of a security)

Basically, this is another visual indicator that shows the strength and or
weakness in a stock based on the trend.

When the price is breaking out in a buyers trend, the MACD swaps into a green
trend, when sellers are in control, the MACD swaps into a bearish red sellers
trend.
Using this paired with the 3 exponential moving averages is my most effective
strategy for reading the markets everyday. I believe this is a very simple way to
see the market and a simple strategy that a lot of people can learn if they put
the time into learning. Some people flood their screen with tons of indicators. I
don’t believe that’s necessary. If you’re going to use some keep it simple. I do
also recommend trying out other indicators or using other combinations. One
thing I’ve learned over the years is every successful trader has their own way
of reading the markets.

Nobody looks at the stocks the exact same way and has the same setups.
Everyone tweaks something a little differently and that’s the beauty of it. It’s a
craft that you learn how to create and read in your own way. It’s a very
independent profession that requires independent thought and problem
solving skills.
All of my mentors and people I’ve learned how to trade from trade differently
than I do. They all trade differently from each other as well which is actually
crazy.

Now that I think about it they all really trade differently. I took a small bit of
knowledge from each one of them and applied it to myself. I attempted to use
all their strategies until I was able to develop what worked for me. Which is
probably what will happen to each and every one of you who end up becoming
successful at this. You may be similar to those you learned from but you’ll
always do something just a little differently.

BONUS

Now this isn't really an indicator, but I want to explain the importance of
volume and paying attention to this in correlation with everything else you’re
watching. Volume will be a huge indicator when approaching key levels how
strong or weak the break of the level is going to be
When approaching key levels, watch for volume to pick up and these areas. If
volume is twice what it has been in the last 5-10 bars, then that’s a clear
indication the level being approached is being seen by other traders and they
are sizing into positions at said levels.

If price approaches a key level and volume is extremely weak, that may be an
indication that that level will be a rejection point and price may reverse from
there instead of breaking through.
 8. PSYCHOLOGY AND EMOTIONAL CONTROL

Trading in itself is not what is necessarily hard. It’s easy to draw patterns,
identify trends, watch price moves, and see what’s going on. But ultimately
trading is in the mind and having the emotional control to deal with being
actively in a position with real money, each and everyday. Losing money is
hard. It’s never going to be easy. Even if you had all the money in the world,
you wouldn't want to lose any of it instantly like you can in the stock market.

Losing money is something you are going to have to go through time and time
again for you to become numb to. It can be both a good and a bad thing. You
never want to be dumb with your own money but sometimes we make dumb
decisions.

Life is just a series of events and lessons learned from the outcomes of said
events. Patience is key in this profession. Once you’ve learned to block out the
noise, create your own plan, and stay patient for said plan to play out. I
promise this is the time you will begin to see consistent success in your
trading. I have put together a list of videos here that I still watch to this day,
and have watched hundreds of times over the years to drill these concepts into
my head when feeling impatient.

Trading Psychology https://www.youtube.com/watch?v=F_WxllDE2TA&t=83s

Dealing With Emotions When Trading

https://www.youtube.com/watch?v=U7ZTfCJMJOE
 9. NO BIAS

It is important to never have a biased opinion on the stock you’re watching and
where you think it’s going to go for each day.

Stocks do not go straight up, and they also do not go straight down. There’s
plenty of days where the market is going to chop in the range of the previous
day which we call “inside days”.
Inside days destroy a lot of traders because they are expecting a continuation
move to either the upside or downside past the previous day's range. But since
they don’t understand that the stocks need to form support and resistance
levels and cool off for some time, people will overtrade these days

and burn through their accounts without letting the market fully paint the
picture for you.

My trading plan always has levels plotted for both breaks to the UPSIDE and
the DOWNSIDE which eliminates me having a bias for the day but simply just
waiting for the price to tell the story.

What a lot of retail traders end up doing is they come into the day with a bias,
enact on said bias and ultimately lose their money.

Though they may catch some wins here and there there’s never going to be
true consistency in doing this long term.
By doing that you’re basically flipping a coin 50/50 like a gambler. That’s not
what we are as traders. We are pattern identifiers who are executing trades
based on pattern and chart recognition.

Even if the stock has a news catalyst the same morning or the night before, do
not expect the stock to just run the way of the news. Sometimes we have bad
news, and the stock goes up, and vice versa. Like I said instead of having a bias

just identify key levels that are important and if they break, execute.
 10. CONCLUSION (ABOUT ME)

Hopefully this guide was able to help you better understand the basic
fundamentals of the stock market, how I trade, the different strategies, and
how to apply these strategies to your own trading system each day.

If this information was useful for you and you’d like to learn more from me or trade
with me live everyday. You’re invited to join my Discord server and follow me on
Twitter.

Discord : https://discord.com/invite/adgZ4p4qbx

Twitter : https://twitter.com/@DB_Daytrades

In my server;

I signal live trades everyday

Daily options watchlist (detailed game plan)

Penny stock signals

Big Board, Small Cap, and OTC Chart breakdowns

50-100 Weekly Technical analysis posts

Active community with plenty of knowledge

Bonus Crypto/Forex signals

Plus much more value to be unlocked in the Freedom Chasers Trading Team.
“Are you really chasing your freedom if you’re not a Freedom Chaser?”

About me: This is a little biography about me. My name is Derrold Barry, I’m a
26 year old entrepreneur working to become a full time day trader and
investor. Born in Beautiful Monterey, California right near the beach. Minutes
walk away from one of the world's most beautiful views everyday.

Extremely small town of about 40,000 people, I’ve grown up with the dreams
of being able to unlock my financial freedom in whatever way possible. Before
trading, I spent the majority of my teen years and early 20’s chasing my
dreams of becoming a full time professional gamer. I played for some of the
Top Trickshotting teams on Call of Duty from the years 2011-2016 before
stepping away, then played Fortnite professionally from the end of 2017-2019
where I went to compete @ Twitchcon in San Jose 2018 with the top 200 best
players in the world. Unfortunately gaming wasn’t able to pay the bills long
term so I had to pause that dream momentarily and put my focus elsewhere
where results could be more tangible.

I know that may sound crazy to some but that was legitimately my goal in life
and I still believe when I’m able to trade full time, I will return to this side of
life. I was forced to take a hiatus to take control of what’s really important in
life which is becoming successful in any way I can.

A few months after cutting the plug in 2019. I returned to College to finish my
classes to get my degree in business but after being introduced to trading and
going all into it I eventually dropped back out for the second time in 2020.
Taking the skills I’ve learned in these fields has helped me tremendously
becoming a consistently profitable trader and working with numbers quickly
in my mind everyday I’m beyond thankful for the way life played out to this
point.

Special thanks to my best friend who introduced me to the idea of trading and
knew I had the mindset for it. In 2019 I first began learning how to trade. I lost
over 8000$ over the last 3 years of learning, which to some may seem like a lot
but I know people who have lost way more before they became profitable. I
managed my risk when losing all that money over the years. But now I am
finally profitable for the last 9 months. Hopefully by the end of this year, with
the opportunities presented I am able to move on the self sufficed endeavors to
make a living from.

Thank you for your time. I hope this guide helps you become consistent in your
journey to Financial Freedom.

Sincerely,

Derrold Barry aka DB Daytrades