Mike, It all comes down to position sizing. You need to find that level that you can brush off the losses. It doesn't matter if it's 5, 10, 20, or 100 (or more) dollars. Find that HONEST level. Next, you need to make sure that your max loss is an honest amount as well. So, allow yourself 3 losses in a row all getting stopped out and add it up. If that means that 30 dollars is your max loss of the day, so be it! Once you start following your rules, you can slowly start to increase your share size. I lost a LOT of money when I first started trading (over 30,000). Once I got serious about educating myself and becoming a better trader (and no longer worrying about making money), I started to actually consistently make money. After completing my 3 months or so in SIM (or whatever it takes to where you are green at the end of the month), I switched back to real. I started trading with 25, 50, and 100 shares depending on the stock. I allowed myself only to lose 10 dollars per trade. If I hit 30 dollars loss on the day, I was done. Slowly but surely, I stopped having max loss days. Then, I started having green weeks. Every week I finished green, I increased my share size by 25 percent. After 4 months of this, I found my level I felt comfortable trading (my max share size is 2000 shares w/200 dollars max risk per trade. I don't often take trades with this many shares, but I will allow myself to do it if I get a really good setup and entry). I haven't had a red week in 5 months. I haven't had a red day in 24 days. But, whats more important than the consistent green is HONORING your rules regarding loss. I could have 100 days green in a row and it wouldn't matter if I were to allow myself to lose 10,000 dollars because I let something run against me indefinitely. So, find your comfortable loss. Stick with it. Be a robot. Stop thinking things will turn around. You will never be right 100 percent of the time. It's statistically impossible.

A couple of us in the chat have been discussing the issue of tax (planning/preparation/etc) as it relates to day trading in the U.S. (IRS). I've done quite a bit of research on the topic as I've been preparing my own taxes for the last decade+. 2018 will be the first year as a trader, so I had some studying to do. Before I get into the nuts & bolts, let me make the disclaimer: I'm not a professional. Please do your own research, consult a professional, etc. I'm not giving advice nor am I suggesting any one thing or another. The information below is solely based on what I've found through the IRS site, TurboTax, and other resources. First, the IRS considers you one of two: an investor or a trader. If you're a (Trader Tax Status), the law considers this to be a business. There are no clear and concise numbers as it relates to activity for what constitutes a trader vs an investor. The IRS, publication 429, states this: - You must seek to profit from daily market movements in the prices of securities and not from dividends, interest, or capital appreciation; - Your activity must be substantial; and - You must carry on the activity with continuity and regularity. Link to IRS Publication 429 So once it is established that you're a trader and not an investor, we look to what forms are necessary. Those appear to be: Form 1040, Schedule D (Capital Gains and Losses) Form 8949 (Sales and Other Dispostions of Capital Assets)...to break down all the transactions) Form 1040, Schedule C (Profit or Loss From Business (Sole Proprietorship)... since as a trader, the IRS considers your a business, you report your business expenses here. Many of us use or plan to use Interactive Brokers. If you're using TurboTax (online version), IB is not a partner of TurboTax. Therefore, all of the transactions won't directly upload into your filing. I've read that some people use software/service such as Gainskeeper or TradeLog. Gainskeeper is listed as a TurboTax partner. All of this is basically to complete Form 8949. With that said, I did also discover that the IRS grants exceptions to Form 8949. Form 8949 states this: Note: You may aggregate all short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS and for which no adjustments or codes are required. Enter the totals directly on Schedule D, line 1a; you aren't required to report these transactions on Form 8949 (see instructions). This is good news. So assuming you get a 1099-B from your broker, it shows the appropriate information, and a copy is sent to the IRS, you can mark the checkboxes on 8949 for Part I, checkbox A, and Part II, checkbox D. Open the form in the link above and you'll see what I'm talking about. It appears you don't have to show all of the trades (hundreds or more) you completed during the year. Thank goodness, because that would be a HUGE pain in the ass. Here is the TurboTax AnswerXchange link I found that first showed me this: TurboTax AnswerXchange - question re: how to report Scroll to the top. One last important piece of information that I found is in regards to Self Employment tax. Many say that you'll owe SE tax to the IRS since you're in business for yourself (as a sole proprietor) as a trader. That's not the case. You have to have Earned Income in order to pay Self Employment tax. Capital gains is not Earned Income. Form 429 clearly states: Gains and losses from selling securities from being a trader aren't subject to self-employment tax. When you open the link above for Form 429, the "Traders" heading shows this. Finally, this was a helpful link for me. It contains a lot of information on this very topic. It also mentions the Section 475 Mark-to-Market election. Trader Tax Status - Green Trader Tax So that's what I've found so far. I was a bit discouraged at first, thinking I would have to use another vendor (e.g.: Gainskeeper, Tradelog, etc) to track the information, but it it appears I won't have to. Of course, there are CPAs that specialize in taxes for traders, so that may be something to consider. I'm not sure on that yet. First, I wanted to educate myself on how it's all done in case I decide to do it all myself. If others have experience with this, please feel free to chime in. Thanks!