I have been trading for 2 years now and am still just breaking even - make some money some days and lose them in the next few days. The problem I am having is I think experimenting with too many different trading styles while looking for which style will make me profitable - trading listed or Nasdaq, scalping or doing intraday swings, trading high volatility stocks or large volume "boring" stocks like MSFT, etc. My question to the full time traders on this board is this - how long did it take you find your trading style? How much money did you lose before you found your niche? I trade from home using IB and have considered going the prop route with the hope of learning from a trading environment but at this point it might be foolish for me to go that way if I don't have a defined, profitable trading style yet. Any feedback will be greatly appreciated. Thanks.
ND & metooxx Thanks for your invaluable advice, but I was not really looking for trading ideas. I just wanted to know how long it took for a successful trader to finally find his niche or trading style that became his bread and butter. If the average time for a successful, full time trader to achieve this 6 mos to 1 year, then I may be in the wrong business since I have been at it for 2 years and still not making progress. Now, if buying low and selling high or selling high and buying can be easier done than said.....
I've been trading for nearly 5 years now, and I'm still trying to resolve this very same issue. For a while, I tried working 3 separate time frames at once (intraday scalping, position trades based on 15 min chart, swing trades based on daily chart), keeping them in separate categories, but I've found this to be a bit more than I could handle. I would get conflicting reads on the same stock which would make me freeze, and that's never good especially when we're talking about stop-loss points. What I'm trying to do now is turn it all on its head: combining all 3 time frames in finding the best risk/reward trades. Every morning I come into the market with no opinions, and I will just start to look for scalping opportunities. Eventually, what I hope to be able to do is grab a decent entry point on a move that feels like it has some legs; keeping my initial stop in place (based on the scalp), if I see a longer-term opportunity, I will hold the trade for the bigger picture trade. So, in theory, a scalp could turn into a multi-day position trade based on the daily chart, if the conditions are right. The point is, the entire risk on the trade remains the initial stop based on the scalp (if the trade turns to an overnight position the size will be reduced before close; gaps through your stops on overnights always a possibility, of course). The whole idea behind this is to keep my entries and stops as strict and disciplined as possible by starting every trade as a scalp. By eliminating any opinions before the trading day starts, I will be less likely to fight any trends that i don't agree with, and minimize chasing any trade that I feel is confirming my "brilliant analysis" and is leaving the station without me -- these are my two biggest faults to date. Hopefully at the same time, I will be letting any "luck" run its course if I happen to have caught the near-term top or bottom on a mere scalp. Letting the opportunities come to me, instead of actively anticipating them, is a liberating if haphazard way of trading for someone who is used to doing "homework". Carrying position trades from the bottom up feels a bit weird at first, but I think alot of it has to do with getting rid of my ego, which is a big plus. Somehow, acknowledging that there is a great element of luck involved with most good trades is comforting to me -- keeps me humble I think. Just my .02. I'm not sure if this will work in the long run, but its just an example of what I'm doing to minimize my shortcomings (finding a style that suits me).
Back in '97, I tried scalping volatile big-cap nasdaq stocks 1000 shares at a time. I did this for several months without any confidence and closed my account with $500 less than I started with. I was never comfortable or confident. I kept watching the markets, and in June of 2001 I started trading again. This time I opened an account with Interactive Brokers, and started trading very small (like 10 shares). Gradually I became confident and developed a style that worked. Finding or developing a style that I was comfortable with and confident in was critical. As I developed some consistency, I began to increase my size. Trading small and having low commissions made all of the difference for me. Last month was my first down month this year (-$1375), and July was my best month so far (about $12,500 - I don't have my final statement yet). I am up about $52,000 for the year. I should be up more, but I am down about $35,000 on open positions - that's another story (they'll turn ). Anyway, I have had more success developing a system I am comfortable with, and sticking with it while I make minor improvements. Having low commissions and sticking to my plan is critical to me. The more I trade, the easier this is. Good luck, I hope you find success. Like I said, you may want to start real small with low commissions and develop some consistency. That will lead to confidence and profits.
It takes about 2 years to develop a right trading style. But it is a neverending story. For example since 1 year i scalp the market( between 15 secondes and several minutes) and before i used to surf for 1 to 4 hours. You have to adapt your trading style to the market and theses days trading breakout for example is BS. better is to buy on support and sell on resistance
One trader here with something like 15 years experience said that to be able to trade successfully the way it's been in the last year(tough) he thought the average trader would need about three years of full time experience.
I must say that you sir have what I think is the best approach to this whole thing. I also enter the market with no opinions no biases and no expectations. I just follow a group of uptrending stocks and look for opportunities mostly in Fibbonacci retracement 38.2% and 50%. I must say that this has turned out to be my most successfully style. I have tried everything I could to no avail. Having a strict discipline with stops and 3 basic rules has helped me tremendously. No trades before 10am I never chase a stock that ran away from my desired entry point (still working and that ). 1k min on all trades Good luck!