I agree, All of TradeCat's replies are sourpuss, jaded, scarred, negative points of view. He's really putting a damper on the mood of all posts As for the original poster, you ultimately have to discover what's good or right for you--Don't expect no one to hold your hand to the location of a gold mine.
Common sense -- look for mentors on this board who've posted real-time calls, preferably for years. Be wary of those who claim to be successful, but don't post real-time. Be doubly wary of those who mention profitable trades after the fact, or say they "would have" bought the low and sold the high. And be triply wary of those who contact you privately to offer paid mentoring.
No disagreement there. Trading (as opposed to investing), well that is another story. After a decade trying with many different methodologies, I found it very difficult to become profitable. Like you said here was a definite trend if one looked decades ahead, but, day to day it seemed quite random except for the occasional fat tails. So, back to the topic of the thread, my advice to the 22 year old is still: Keep investing for the long term but if you like, take a small percentage and trade, in a separate account. After you become one of the great traders here you can quit and trade full time and we can all celebrate your success. Best wishes.
That explained your 18-2 success ratio. My guess is you shorted OTM calls and puts. It is all probability based on options pricing. If you use this strategy to trade long term, your few losses will negate all the gains from your profitable trades. I tried it with real money after reading (and watching youtube videos) about how being the insurance company (selling premium) was the way to go. I netted a loss after over 3000 trades and gave up. Now I short calls or puts only on special occasions. As a side note i found going long worked better for me. Good luck. Maybe you can do better.
It's well known that people overpay for index puts. There may be money to be made selling them if one can withstand the occasional large losses. However, with a small account, it seems better to trade put credit spreads so the loss is limited.
I used to "trade" many markets in the late 80's + 90's. I occasionally used leverage. Didn't have instant real time charts and hand plotted data. I guessed a lot. I eventually discovered that: - the U.S. equity markets have an advantage or edge in that the underlying long term trend reflects solid stable policy, product innovation and development, persistence of credit cycle through monetary easing, incentives towards rewarding shareholders, etc. Other markets such as commodities and currencies don't "produce" anything and aren't supported by these "underlying" factors - Longer term positions taken in the U.S. equity markets ( and sometime "cash" positions ) at strategic times can compound capital "geometrically" and produce as much profit and as an aggregate of short term trades with a lesser and commensurate amount of mental resources expended. A smaller allocation to emerging markets can help diversify valuation risk amongst markets. - The combination of a strategic, empirically tested, quantitative ( non subjective, non technical / chart based ) strategy and longer holding periods alleviated much of the cognitive frustrations that I had when "trading" and built confidence. - the evolution of Exchange traded fund products has streamlined the asset class selection process ( one doesn't even need to buy and sell individual securities anymore, necessarily) and has given the average investor easy access to products and portfolios that, in the past, only professional / institutional portfolio managers had the resources to construct. The underlying portfolio structure of these products can represent some of the highest decile alpha producing universes within academic testing. - the tax deferral of a Roth IRA provides advantage in further compounding in one's asset growth. - if one uses longer term holding periods and infrequent transactional models, one may want to learn another skill and occupation, creative endeavour, etc. as there will be time opened up to "fill" ( yet it does require time and a different learning curve than "trading" ). - Don't quit your day job - Don't use leverage - Open a Roth IRA - Sometimes money is made by sitting in cash - Don't be a hostage to the markets - let the markets, profitability of the U.S. economy work for you
I agree with Stockmarketmap. Sitting in front of a computer for prolonged periods of time is not that healthy.
This is true. I'm on auto-pilot by 11:30 EST. I wouldn't daytrade without automation. No money is worth streamlining health problems.