Ross Cameron: How to Day Trade With Core Strategies

Day trading involves the rapid buying and selling of financial instruments within the same trading day, aiming to profit from small price fluctuations. Ross Cameron, a prominent figure in the day trading community and founder of Warrior Trading, has developed a distinct methodology for navigating these fast-paced markets. His approach emphasizes a structured framework designed to help traders achieve consistent results. His educational platform provides insights into short-term trading, focusing on practical application and real-time market dynamics.

Cameron’s methodology integrates technical analysis with an understanding of market psychology, aiming to equip traders with comprehensive tools. He shares his trading sessions and tutorials to illustrate his techniques. While he has demonstrated significant personal success, he states that his results are not typical. He highlights the inherent risks and the fact that most day traders experience losses. This transparency underscores the demanding nature of day trading and the importance of a disciplined approach.

Foundational Principles of Ross Cameron’s Trading

Ross Cameron’s trading philosophy centers on identifying and capitalizing on significant price movements in specific market segments. He primarily focuses on small-capitalization stocks that exhibit high trading volume and strong upward momentum. This preference stems from the potential for these stocks to experience substantial percentage gains within a short timeframe, which is attractive for day traders. He seeks out equities demonstrating liquidity and volatility, often driven by recent breaking news or corporate announcements.

To identify these opportunities, Cameron prioritizes several key indicators and chart elements. A stock must display a strong daily chart, trading above its moving averages and without immediate overhead resistance levels that could impede its ascent. High relative volume is a criterion, meaning current trading volume should be at least double its average volume for that time of day. These conditions suggest heightened interest and potential for continued price movement. By concentrating on stocks that meet these specific criteria, Cameron aims to narrow the vast market to a manageable selection of high-probability trading candidates each day.

Core Trading Strategies and Setups

Ross Cameron employs several core trading strategies designed to capture short-term price movements in high-momentum stocks.

Gap and Go

One strategy is the “Gap and Go” setup, which targets stocks that open significantly higher than their previous day’s close, fueled by pre-market news. For this strategy, a trader looks for a strong pre-market gap of at least 10-20% on substantial volume, indicating strong buying interest. Entry occurs shortly after the market opens, as the stock breaks above a key pre-market resistance level, such as the pre-market high, with volume confirmation. An initial stop-loss is placed just below the entry point or a recent low, such as a prior candle’s low, to limit potential losses. Profit targets are set at subsequent resistance levels or round numbers, aiming for a risk-to-reward ratio of at least 2:1.

Bull Flag Patterns

Another strategy involves trading “Bull Flag Patterns,” which are continuation patterns indicating a temporary pause in an uptrend before another leg higher. A bull flag forms after a strong impulsive move upwards, characterized by a period of consolidation where the price drifts sideways or slightly downwards on decreasing volume, resembling a flag or pennant shape. Entry is triggered when the stock breaks out of this consolidation pattern to the upside, accompanied by an increase in volume, signaling renewed buying pressure. The stop-loss is placed below the flag’s low or a significant support level within the pattern, ensuring limited downside if the breakout fails. Traders project profit targets by measuring the initial pole’s length and adding it to the breakout point, aiming for a continuation of the prior trend.

VWAP Bounces

Cameron also focuses on “VWAP Bounces,” leveraging the Volume Weighted Average Price (VWAP) as a dynamic support or resistance level. This strategy is applied when a stock is in an uptrend and pulls back to touch or come close to the VWAP line, indicating a healthy consolidation before a potential rebound. Entry occurs when the stock shows signs of bouncing off the VWAP, such as a strong bullish candle forming near the line, confirming buying interest at that level. The stop-loss is set just below the VWAP line or the low of the bounce candle, protecting against a breakdown. Profit targets are established at recent highs or subsequent resistance levels, anticipating a resumption of the uptrend. This strategy helps identify low-risk entry points within an established trend.

Relative Strength Plays

“Relative Strength Plays” identify stocks that are outperforming the broader market or their sector. This involves observing how a stock performs when the overall market is declining or consolidating; a stock exhibiting relative strength will either hold its ground or continue to climb. Entry is considered when the stock displays clear bullish price action, such as breaking above a short-term resistance level, while the general market remains weak or neutral. The stop-loss is positioned below a recent swing low or a defined support level, reflecting the underlying strength of the stock. Profit targets are determined by projecting potential price extensions based on the stock’s historical volatility and significant price levels, aiming to capitalize on its continued outperformance.

Risk Management and Trade Management

Effective risk management in Ross Cameron’s day trading methodology serves to protect capital and ensure long-term viability. Position sizing is calculated based on a fixed dollar risk per trade, rather than a fixed number of shares. For instance, if a trader decides to risk a maximum of $100 per trade and identifies a stop-loss 20 cents away from the entry price, they would size their position to 500 shares ($100 / $0.20). This approach ensures no single trade can disproportionately impact the trading account, regardless of the stock’s price.

Managing live trades involves dynamic adjustments as a position progresses. Once a trade moves favorably, Cameron advocates for moving the initial stop-loss to breakeven or into profit, locking in gains and eliminating downside risk. Scaling out of positions is a common practice, where a portion of the shares are sold at initial profit targets, allowing the trader to secure some profit while letting the remaining shares run for potentially larger gains. This technique helps manage psychological aspects by reducing pressure on the remaining position.

Cameron’s risk framework includes strict daily loss limits. Traders establish a maximum amount of money they are willing to lose in a single trading day, a percentage of their total trading capital, ranging from 1% to 5%. Once this threshold is reached, trading for the day ceases, regardless of market conditions or potential opportunities. This disciplined approach prevents emotional decision-making and protects the trading account from significant drawdowns, reinforcing the importance of capital preservation.

Preparation and Post-Trade Analysis

Pre-market preparation is central to Ross Cameron’s daily trading routine. Before the market opens, traders engage in a systematic scanning process to identify potential trading candidates. This involves filtering stocks based on specific criteria such as significant pre-market price gaps, high relative volume, and the presence of news catalysts. The goal is to compile a focused watchlist of 3-5 top-gapping stocks that exhibit characteristics suitable for momentum trading.

This preparatory phase includes reviewing relevant news headlines and understanding their potential impact on stock prices, as news serves as the catalyst for the strong moves Cameron seeks. Traders also analyze the daily charts of these potential candidates to identify key support and resistance levels, which determine entry and exit points. This detailed pre-analysis ensures traders enter the market with a clear plan and a strong understanding of the stocks they intend to trade.

Post-trade analysis and journaling are equally important. After the trading day concludes, traders review each trade taken, regardless of outcome. A trading journal serves as a comprehensive record, documenting specific details such as entry and exit prices, position size, the strategy used, and the profit or loss generated. Beyond numerical data, it is important to record the rationale behind each trade, including market conditions, emotional state during the trade, and any deviations from the original plan.

This review process allows traders to identify recurring patterns in their performance, both positive and negative. By analyzing past trades, traders can pinpoint strengths to leverage and weaknesses to address, leading to continuous improvement. The journal also serves as a valuable tool for understanding psychological biases and reinforcing disciplined habits, transforming raw trading data into actionable insights for future trading sessions.