# Andrew Aziz Study Notes ## A learning companion for *How to Day Trade for a Living* **Prepared by:** Abhinandhan **Source:** User-supplied transcript of the audiobook introduction and Chapters 1-5 **Scope:** First-half notes only > These are original study notes and summaries, not a reproduction of the book. The book and transcript belong to their respective copyright holders. This page is for personal education and practice, not financial advice. ## How to Use These Notes Do not treat this as a promise that a strategy works. Read a topic, write the lesson in your own words, practice it in a simulator, and record what happened. The central question is not “How much can I make?” but “Can I execute a defined plan while limiting risk?” ## The Book's Core Framework The supplied material presents day trading as a demanding skill built from several connected abilities: 1. Technical knowledge 2. Risk and account management 3. Discipline and psychology 4. Preparation and stock selection 5. Tools, execution, and review A weakness in any one area can undermine the others. More indicators cannot repair poor risk control, and a good entry cannot repair an undefined exit. ## Chapter 1: Treat Trading as a Serious Business ### Main lesson Day trading is not a shortcut to wealth or a casual hobby. It requires preparation, education, practice, operating costs, and a repeatable process. ### Important ideas - A lucky early win can create false confidence. - Reading books and watching videos is not the same as developing execution skill. - Simulator practice can expose mistakes before real money is at risk. - A trading plan should define the strategy, risk limits, tools, schedule, and review process. - Your goal should be process consistency before income. ### Practice exercise Write a one-page business plan containing: - Your primary setup - Your trading session and timezone - Your simulator start date - Maximum risk per trade - Maximum loss per day - Maximum number of trades - What you will study each week - What evidence is required before changing stages ## Chapter 2: Know What You Are Practicing ### Day trading is not investing Day trading focuses on intraday movement and normally closes positions before the session ends. Swing trading and investing use different time horizons, risks, tools, and decision frameworks. Do not quietly turn a failed day trade into an overnight position because you do not want to accept a loss. ### Long and short A long position seeks a higher exit after buying. A short position borrows and sells shares with the intention of buying them back lower. Short selling has additional risks, including borrow availability, squeezes, regulatory restrictions, and potentially large losses if price rises. ### Retail trader's possible advantage The transcript emphasizes selectivity: an individual trader can wait, trade small, and exit quickly. That advantage disappears through overtrading, impatience, poor liquidity, or following a crowd without independent judgment. ### Practice exercise Explain these in your own words without looking them up: - Day trade versus swing trade - Long versus short - Bid, ask, and spread - Liquidity and slippage - Entry, stop, target, and invalidation ## Chapter 3: Risk Management Is the Business ### The three-part model 1. Choose a suitable stock and setup. 2. Define the technical risk per share between entry and invalidation. 3. Size the position so the planned loss stays within your account limit. A general sizing equation is: $$ \text{shares} = \frac{\text{maximum dollar risk}}{\text{entry price} - \text{stop price}} $$ For a short, use the absolute distance between entry and stop. Round down, account for slippage and fees, and obey your broker's buying-power and regulatory rules. ### Lessons to remember - A stop is part of the setup, not an afterthought. - If the available target does not justify the technical risk, skip the trade. - A small planned loss is information; an unmanaged loss can damage the account. - Do not move a stop farther away to defend a prediction. - A disciplined red day can be a good trading day; a profitable rule-breaking day is not proof of skill. The transcript discusses a 2% maximum-risk idea. Treat that as a historical teaching example, not a universal rule. Your appropriate risk may be much lower and depends on your account, experience, liquidity, jurisdiction, and personal circumstances. Confirm current rules with a qualified professional and your broker. ### Practice exercise Before every simulator trade, write: - Account risk limit - Entry price - Invalidation price - Risk per share - Planned share size - Target price - Reward-to-risk ratio - Maximum loss including likely slippage ## Chapter 4: Find Stocks in Play ### Main lesson A strategy cannot create liquidity or a catalyst. Start with a stock that is active enough to trade and has a reason for unusual attention. ### Candidate qualities from the transcript - Fresh news or a clear catalyst - Unusual relative volume - A meaningful premarket gap or intraday move - Enough average volume to enter and exit reliably - Enough range or volatility to make a defined trade possible - Nearby levels that create understandable risk and reward Examples of catalysts mentioned include earnings, regulatory decisions, mergers, partnerships, product releases, contracts, restructurings, management changes, splits, buybacks, and financing events. These are filters for study, not automatic buy or sell rules. Market conditions, float, spread, halts, borrow, and execution quality still matter. ### Premarket worksheet | Field | Notes | | --- | --- | | Ticker | | | Catalyst | | | Gap percentage | | | Premarket volume | | | Relative volume | | | Average daily volume | | | ATR or typical range | | | Float and price context | | | Premarket high / low | | | Previous-day high / close / low | | | Long thesis | | | Short thesis | | | Invalidation | | | No-trade condition | | ### Practice exercise Choose no more than two or three candidates. For each one, explain why it is in play and what would make you remove it from the list. Practice the selection process in replay before paying for expensive scanners. ## Chapter 5: Build a Safe, Simple Workspace ### Chart ingredients The transcript describes a clean chart built around: - Candlesticks and volume - 9 EMA and 20 EMA - 50 SMA and 200 SMA - VWAP - Previous-day close - Manually identified daily support and resistance This aligns closely with the Pine scripts in this folder. Keep the chart readable. Adding tools is not the same as adding understanding. ### Execution concepts to study - A market order prioritizes execution but can accept unexpected price movement. - A limit order controls price but may not fill. - A marketable limit order attempts fast execution within a defined price boundary. - Hotkeys can reduce manual delay, but an incorrect hotkey can create a large error. - Level 2 shows displayed bids and asks; it is not a guarantee of future movement. - Real-time data, broker behavior, short availability, fees, and order rules differ by provider. Practice every order type and hotkey in a simulator. Never copy another trader's broker, hotkey script, position size, or execution settings without understanding and testing them. ### Workspace checklist - Reliable internet connection - Broker simulator account - Trading platform understood before live use - Real-time data status confirmed - Wired or dependable input device - Backup plan for platform, internet, and hardware failure - Chart with only the information you can explain - Written emergency exit procedure ## Daily Routine Derived from the Notes ### Before the open 1. Review the market calendar and relevant news. 2. Scan for stocks in play. 3. Narrow the list to a few candidates. 4. Mark previous-day, premarket, and daily levels. 5. Write if/then plans for long and short scenarios. 6. Calculate risk before the opening bell. ### During the session 1. Wait for the planned setup. 2. Confirm liquidity, spread, volume, and location. 3. Enter only if the stop and target are known. 4. Exit when the thesis is invalidated. 5. Stop trading when the daily risk or behavior limit is reached. 6. Avoid trading from frustration, fatigue, or a need to recover losses. ### After the session 1. Save before-and-after screenshots of your own chart. 2. Record the trade in R as well as currency. 3. Mark whether the setup, risk, and execution followed the plan. 4. Record sleep, focus, and emotional state. 5. Review patterns weekly, not after one isolated trade. ## Five Rules to Carry Forward 1. **Prepare before you participate.** 2. **Trade the stock and setup, not the excitement.** 3. **Know the invalidation before entry.** 4. **Size from risk, never from ambition.** 5. **Review behavior, not just profit and loss.** ## Visual Reference Policy No screenshots from the book or transcript are included here because no licensed image files were supplied. The website instead uses original diagrams and tables to explain the concepts. For visual study, create your own annotated screenshots in TradingView and label: - VWAP - 9 EMA and 20 EMA - Volume - Premarket and previous-day levels - Entry trigger - Stop or invalidation - Target Your own before-and-after chart is more useful for learning than a screenshot you only remember as someone else's trade. ## Sources and Attribution - Andrew Aziz, *How to Day Trade for a Living: A Beginner's Guide to Tools and Tactics, Money Management, Discipline and Trading Psychology*. Study notes based on the user-supplied transcript of the first half. - [Bear Bull Traders YouTube channel](https://www.youtube.com/@BearBullTraders) - [TradingView documentation](https://www.tradingview.com/pine-script-docs/) - Local companion scripts: [1-minute setup](abhi-1m-day-trading-setup.pine), [5-minute setup](abhi-5m-day-trading-setup.pine) Book editions, broker rules, pattern-day-trader requirements, short-selling rules, and platform features can change. Verify current information with official sources before acting.