Any advice for a beginner short-term trader?

Discussion in 'Technical Analysis' started by tian, Mar 16, 2003.

  1. tian


    Just wondering if anyone has advice for a beginner at short-term trading?

    I'm going to be using technical analysis for this (since its easier to access). Currently I am a college student (1st year, just started the school year). Unfortunately, not many days off (I only get friday off, although I go to school late most days).

    I'm aiming not just to daytrade, but mainly for weekly trading. I'm a total beginner at this - just finished reading a few books about the basics of trading.

    One of the "advantages", if you call it that, is that I can watch my stock perfomance without "wasting time" (since I need the Internet for studying at same time anyway). So I am really looking for small gains - something to the extent of $50 to cover the discount internet broker's costs and earn a bit of side money.

    However, I only have $2000. I am willing to borrow a further $10,000 to get myself started, since some banks here have special student loans (without even asking why).

    Does anyone have any advice, or recommending reads for me at this stage?
  2. Trust me bud, the last thing you want to do is go borrowing money when you are a first year student so you can 'play' the market. The odds are very good that you will lose a good part of that money, if not all of it. And the pisser is that you have to pay it back one day.
    Why not play with a simulator for a few years while you finish school? Then you'll be able to hit the markets running. The stock market isn't going to close because you went to school for too many years. The more years you spend developing methodologies, the less apt you'll be to blow up when you finally do get some cash burning a hole in your wallet.
    If you decide to ignore my advice, please have the courtesy to inform me of what trades you'll be making. I can use the cash...

  3. silk


    Go ahead and play with the 2k. But do not under any circumstances borrow money until you know what you are doing.

    The rewards of using that 10k borrowed to make 10k do not equal the risk and PAIN! of losing that 10k borrowed.

    Think about it, if you lose that 10k you borrowed, you will be in debt for the rest of your college career and then it will take you several years to pay off after college. That is some serious pain.

    I did the same thing when i was in college. I borrowed 10k off my credit cards to play the options market with. I lucked out and made a quick 100 grand in just a couple months. But then in 2 weeks i lost everything. Including the 10k borrowed. The pain of that experience pretty much ruined several years of my life.

    But i do encourage you to play with the 2k you got. Even if you lose that 2k, you will learn a ton about finance and the markets. That knowledge could be the foundation for you making millions later in your life.

    Good luck.
  4. london


    Dont borrow money!I dont mean to discourage you but trading is probably the most difficult profession.The best and fastest way to learn is to learn from a successful trader.Learning from books will take you a long time not to mention a lot of trial and error.In my opinion if you want to read a couple of books try books by Jeff Cooper,Street Smarts (Linda Bradford Raschky and Conner),Dave Landry on Swing Trading and Trading for a living by Alexander Alder.

    Good Luck,
  5. Get three buddies together and figure out what I am sending to you in the next cople of posts.

    Go to stocktables and learn to sort quality stocks to get a universe. Sort by EPS and RS. Rank by increasing volume just usex stocks over ten bucks. Keep the list under 150 stocks by adjusting the EPS and RS to keep list short. Read William J O'neil to fing out what CANSLIM is thats where EPS and RS come from.

    Learn to score the list you get. Scoring is on the attachment below.
  6. The chart for values is below.
  7. You will see at the top of the stocktables print out the stocks going up on big volume increases are 7's.

    At the bottom of the chart from stock tables the stocks are 0's and next they become 7's. look at the graph from the first post to see this.

    The stocks above the 0's on the list are 1's who will become 0's next.

    Do the universe sort once a week.

    Put on clearstation four portfolio's. Label them 7's, 0's, 1's and owned. Add the stock symbols to these according to the score they get from the Daily analysis log attached.

    You can't fill in all the columns yet but you can learn to ask how to do each one.

  8. You can use the attachment below to figure out which stocks that are in your universe are the best for making money. The Ranking value tells you that.

    because you have three buddies working with you , you or one other will figure this out.

    Ordinarily one out of five people get with it. The percentage of people who do who turn out to use it that become millionaires over time is as high s you can guess it would be.
  9. Vishnu


    My advice is: don't trade.

    Use the $2000 to get data feeds and a program for backtesting, such as wealth lab, Amibroker, or tradestation (i use wealth-lab). Daily data is better than no data. Hourly data, better than daily, minute better than hour. With whatever money is left - start therapy and read biographies of other traders/investors.

    Spend a year studying and learning. And when you start trading, start with $25K that you can BLOW and NEVER use leverage the first year.

    Also, don't listen to any platitudes like "the trend is your friend", "cut your losses and ride your winners", "buy support, sell resistance", etc. Test EVERYTHING before you blindly believe it.

    Don't use any technical analysis until you test it. Many of the indicators that are popular have never ever worked except in isolated periods. Test everything.

    Don't trade individual stocks. You take too much stock risk. Trade QQQ without leverage. And when you have a year of success then consider using futures to get leverage.

    Don't be afraid to hold overnight. Daytrading is fine but much profit is hidden between the cracks overnight.

    Although you should never take this advice without testing it, my one piece of trading advice is, don't sell a down day. And if there are two down days and a gap down - BUY.

    If I had just known any ONE of the above things I would've saved a ton of money when I started. Good luck.
  10. Andre


    <i>Don't be afraid to hold overnight. Daytrading is fine but much profit is hidden between the cracks overnight.</i>

    That's my angle, currently.

    #10     Mar 16, 2003