'A license to print money': A former chemical engineer and Ph.D. with no market experience now makes a living day-trading full-time. Here's his 3-step process to finding that one successful trade that makes his day.

Andrew Aziz

• Andrew Aziz - former chemical engineer, best selling author, and Ph.D. - went from not knowing anything about financial markets to making a full-time living off day-trading.
• His systematic and disciplined background set the foundation for his trading methodology, which he outlines in three simple steps.
• Aziz is also quick to note the perils of day trading, why so many are unsuccessful, and why it's not for everyone.
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If you're acquainted with financial markets, you've probably heard the statistic that 90-95% of day-traders lose money. No one really knows where this number came from, but it's generally accepted as a truism. After all, day-trading is one of the riskiest endeavors an individual can embark upon.

Andrew Aziz - a former chemical engineer, best selling author, and Ph.D. - is not part of that cohort - and he thinks that those who figure out how to successfully day trade have essentially been gifted "a license to print money."

He should know, he's been doing it for years.

After Aziz got laid off from a former job of his, he decided to take matters into his own hands and started to day-trade.

"I had no knowledge in finance, trading, and accounting or anything at all - so I just started," he said in an exclusive interview with Business Insider. "I myself am an example of someone who really doesn't know anything about how the markets works."

But this didn't faze Aziz one bit. Over time, he had adopted a successful methodology that helped him cash in on market volatility and momentum. It's an approach called breakout trading, which utilizes price ranges to determine when to buy and sell.

In a matter of minutes, he's in and out of a stock. And if all goes well, he's a richer man for doing so.

Read more: Dyslexic, failing at school, and partially blind: How Larry Hite overcame the odds to become one of the most successful self-made stock traders using a strategy that's 'accessible to anybody'

But before we dig into his methodology, it's important to note what the end goal is. For Aziz, it's 1-2% of profit a day. If you can accomplish that, you'll be making 20-30% a month - a goal that most money managers can't hit in an entire year.

He says it all comes down to a three-step approach that's both disciplined and systematic.

Step One

"For us, step one is to find the stock that has gapped up or gapped-down based on news," he said.

For context, gaps occur in stock prices when investors/traders either rush into or out of a security. Typically, they're caused by things like news and earnings reports.

For example, stock XYZ gapped up from $140 to $145 due to a positive earnings report and strong forward guidance.

Aziz embraces these fluctuations, so correctly identifying which stocks are on the move is crucial to his strategy. You're not going to make money if a stock churns in place.

Step Two

Once a few stocks are on your radar, it's time to deploy the second step.

"Step two is find two trading levels based on a daily chart - which direction the stock is going, and what are the support and resistance levels for the stock," he said. "As a day trader, you need just one good trade. Just one opportunity."

Many times, prices will "bounce" off of these levels, before breaking through to the next level of support or resistance.

Read more: Billionaire Howard Marks gives his best advice for navigating an anomalous market where 30% of the world's debt has a negative yield

For example, if a stock has hit $50 dollars multiple times without going down to $49, a trader might want to use the $50 dollar level as a level of support. On the contrary, if the a stock has hit $55 without pushing higher to $56, a trader may want to use $55 as a potential level of resistance.

When support, resistance, and direction are defined, it's time to move to step 3.

Step Three

This step requires a bit of patience.

Before pulling the trigger on a buy or sell, Aziz watches how the stocks on his radar are behaving at the market open. After about 5-10 minutes - and once he's confident they've put in a range - he's ready to make a trade.

"When that's established, that's usually the moment you can actually find the balance of the power between the buyers and sellers," he said. "And if the buyers are stronger, we go long. And if the sellers are stronger, we go short."

It's that simple. Wait for the stock to trade out of that defined range, and either buy/sell depending on the direction.

With that being said, Aziz is quick to note that there's no correct way of trading. Just because this methodology works for him doesn't mean it will work for someone with a different skillset. Everyone has to find a strategy that works best for themselves, and those that are interested in just part-time trading here and there shouldn't even try it.

What's more, he's also wants to make sure the distinction between trading and investing is made explicitly clear.

"A lot of people who get into day trading, they're really not ready to be a trader, they want to invest," he said. "Trading is very different from investing."

"Day trading, if you figure it out, is essentially a license to print money," he concluded.

Read more: A self-taught hedge fund manager who's returned 19%-plus annually to investors since 2012 shares the 3 books that 'put it all together' for him