DAY TRADING
Day trading is buying and selling financial instruments within the same trading day. You close all positions before the market closes so you’re never holding overnight risk. It sounds simple, but doing it profitably is one of the hardest skills in finance to develop. I say that as someone who’s been day trading futures for over a decade and has made every mistake in the book along the way.
I’m Lane Dotson, and I built Trend Friend because the tools and education available to day traders were either too basic to be useful or too expensive to justify. This guide covers what you actually need to know to start day trading. The markets, the strategies, the risks, and the tools, all written by someone who still does this every single day.
No hype. No “quit your job and trade from the beach” nonsense. Just what works, what doesn’t, and what I wish someone had told me when I started.
GETTING STARTED
Starting right matters more than starting fast. Here’s the honest sequence:
RISK & MINDSET
Before you pick a strategy or place your first trade, you need to understand risk management and the mental side of trading. These two things determine whether you survive long enough to get good. Most traders skip them and blow their accounts before they ever develop a real edge.
Aim for a 1:2 or higher risk-to-reward rate on every trade. Use a stop loss on every trade and set your take profit at a target that is at least 2x as far from your entry as your stop loss.
Keep your position size at a maximum of 10% of your trading capital per trade, and ideally 1–2% per trade. This way you won't be emotional when a trade goes against you and you'll be able to let it play out as planned. If you're getting stopped out constantly with tight stops, lower your position size until you can place your stop loss at a reasonable distance from your entry.
Regularly review your trading activity to make sure your wins are exceeding your losses. Take high probability trades only, use a reasonable stop loss and take profit, and only size positions you can watch go against you without becoming emotional. If you can do all of this, you're ahead of 90% of other traders.
There is a reason 95% of day traders fail. Mindset plays a huge role in pushing through the difficult stretches to reach consistently profitable trading. If you are constantly switching strategies, not back testing ideas before trading them, using too large position sizes, or revenge trading, you need to work on your self discipline.
If you can't be disciplined, you will not make it in trading. To become a successful trader you are going to need to constantly self reflect — see what you did wrong and why. If you can't be honest with yourself during those moments, you won't make progress.
Practice trading as much as you can. Reading books about day trading isn't going to give you the experience you need to get better. Time on the charts and in live market conditions is what builds the skill.
Prop firms are companies that will stake you with a trading account — sometimes up to $400,000 — as long as you pay a small fee and can pass their trading tests. Many offer $100,000 accounts for around $500–$600, taking roughly 20% of your profits in exchange for the capital.
Important caveat: most traders hit the drawdown limits these firms set and lose their fee. Prop firm accounts are for experienced, consistently profitable traders only. If you aren't there yet, a prop firm will just keep taking your money. Get consistently profitable on a demo account first, then consider it.
STRATEGIES
Strategy is everything. Without a defined, tested approach, you’re just gambling with a charting platform open. I’ve spent years testing different strategies and the ones below are the categories that consistently produce results for intraday traders.
Learn about different ways to use our Buy Sell Indicator to give you signals at specific times on the chart. You'll learn what to look for and when to follow signals.
Reading the raw chart structure: pivots, higher highs, higher lows, breakouts, and reversals. No indicators required, though they can confirm what you're seeing.
Identify the trend direction and only take trades that go with it. Sounds obvious, but most traders lose money fighting trends.
When price gaps up or down overnight, we wait for price to return back to the gap and then trade the bounce off of that gap in the direction that it gapped.
Learn how to place high probability buy orders where price is likely to return to before it goes up again. This is called buying the dip and works well for most assets.
Watch for price to push past recent highs/lows, sweep the stop losses, then reverse. This is how market makers generate liquidity. One of the most reliable setups across all markets.
INDICATORS
Indicators are tools, not magic. They help you read the market faster and spot setups you might miss with the naked eye, but they don’t replace understanding what the market is doing. The best indicator in the world won’t save you if you don’t have a strategy and risk management plan.
That said, the right indicators make a real difference. I built the Trend Friend indicator suites because the standard TradingView indicators weren’t giving me the speed and accuracy I needed for scalping futures. Moving average crossovers are too slow. Standard RSI gives too many false signals. I needed something better, so I built it.
Tell you when conditions line up for an entry. The signal is the starting point, not the full trade decision.
Show you where price is likely to bounce or break through. These define your entries, exits, and stop loss levels.
Keep you trading in the right direction. Fighting the trend is one of the fastest ways to blow an account.
Show you where the real money is moving. Volume spikes, volume levels, and VWAP give you context that price alone doesn't provide.
MARKETS
Not all markets are created equal for intraday trading. The key factors that make a market good for day trading: tight spreads, deep liquidity, low fees, and enough volatility to create tradeable setups.
ES, NQ, GC, and CL have institutional-grade liquidity and no PDT rule. Micro contracts (MES, MNQ, MGC) let you trade with a fraction of the capital. If I were starting over today with a small account, I'd go straight to micro futures.
SPY and QQQ are top picks. Massive liquidity, tight spreads, and daily options for leverage strategies. Individual stocks like AAPL, NVDA, TSLA, and AMZN also provide excellent conditions. Downside: the PDT rule requires $25,000 in the US.
Bitcoin and Ethereum are the most liquid. No PDT rule and many exchanges offer low or zero commissions. The trade-off: spreads can widen during low-volume periods and the market can be unpredictable around news events.
Massive daily volume and low entry barriers. EUR/USD, GBP/USD, and USD/JPY are the most traded pairs. Leverage is widely available but dangerous for new traders. Better suited for European or Asian market hours.
LEARN MORE
Learn more about day trading with this collection of guides about different day trading topics.
TOOLS & RESOURCES
QUESTIONS
Risk Disclaimer: Day trading involves substantial risk of loss and is not suitable for every investor. Most day traders lose money, especially during the first year. Past performance is not indicative of future results. The content on this page is educational and informational. It is not financial advice, trading advice, or a recommendation to buy or sell any financial instrument. All trading decisions are the sole responsibility of the user. Only trade with capital you can afford to lose.
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