How Not To Lose Money Day Trading

How Not To Lose Money Day Trading Introduction

In this article, we will explore three tips on how not to lose money day trading. We will start off by introducing the concept of high conviction setups, where professional traders usually size up. Combine that with the understanding that the pattern is not a trade setup and how the sequencing of clues leading to that pattern is very important. And last but not least we will cover the law of diminishing marginal returns and what role it plays in your trading progress. We take three concepts and distill three lessons out of them that you can start following to limit your losses in day trading. If you are into day trading and particularly enjoy scalping, don’t forget to check our previous article 2 Ways To Scalp The Exhaustion Move.

Three Tips On How Not To Lose Money Day Trading

High Conviction Setups

If you look at professional traders in Axia Futures, many of the 8-figure traders don’t have a winning percentage greater than 50/50. So how do they make money? By maximizing their high-probability trades. By pushing their size when the odds are highly stacked in their favor. Now how do you do that? Time! Time and deliberate practice.

Many traders have an assumption that after 6 or 12 months of trading, they know their high conviction setups. For some, this might be true, but there is a great danger in this thinking: maximizing your size in the under-developed setup will lead to greater losses. This damages your confidence and your account. So what is the “LESSON” and what is the “BUT”?


  • You win in trading by maximizing size in your high-conviction setups


  • Don’t forget that sizing up too early in your career might lead to outsized losses and damages your confidence, therefore …
  • Be patient and build very detail depth of your best trades before you start scaling up.
  • If you feel you are starting to have a grasp on high probability setup, increase size for this particular setup by 2-3x and test it

Pattern Is Not A Trade Setup

One mistake new traders make is that they come to trading trying to trade just the pattern such as a flag or triangle. And there is nothing wrong with that, but it hugely limits your ability to maximize your profit. In Axia, all our Junior and Senior traders build a sequence of clues and triggers so that when the simple flag break comes, for example, they are aiming for a much larger directional move because their understanding of the wider structure gives them greater ability to maximize their profit.


  • Don’t trade just patterns, understand when the pattern has the highest probability of success. For example, if there is a nice scalp, but opportunity can unlock swing move, don’t limit your trade to the scalp.

Law of Diminishing Marginal Returns.

A different period in your trading career brings a different level of satisfaction. When we start on our trading journey, we can see the leap jumps in our market understanding and get frequent dopamine spikes. As we acquire more knowledge, it might start to feel that our learning curve starts to stall. We should not get discouraged by that. It is called a law of diminishing marginal returns.

We only need to understand that the snowball effect might come with more distanced milestones. For that reason, we need to be patient and focus on our skill acquisition.


One of the most reasonable ways how you can judge your progress is by following metrics that improve your trading. Not P&L but, how good you are in:

Use weekly and monthly score card system and track your trading like it would be a business. Meaning, what are the numbers, what is the hard evidence of things not working. What do you do to change those things. Stick to the process of doing things like that long enough and you will become a profitable trader.

If you want to learn how Axia Traders eliminate their mistakes in day trading, visit the free workshop we are running at:

If you liked this type of content, you might check these videos as well:

If you like our content and would like to improve your game, definitely check one of our courses that teach you all the techniques presented by AXIA traders from a market profilefootprint, or order-flow. If you are someone who likes to trade the news, we have a great central bank course. And if you are really serious about your future trading career, consider taking AXIA’s 6-Week Intensive High-Performance Trading Course.

Thanks for reading again and until next time, trade well.


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Written by Jaroslav Kohout

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