Getting Lucky?

I have decided to try trading, despite warnings from all my friends, despite the failure stats I read about and the real life examples here on ET (although my guess is that most of the people who fail just quietly stop posting). Before you get too worried about me, dh and I made a small fortune with our previous business. If I lose all of this initial cash it will be painfully embarrassing but not life changing.

The Good
I'm a stupid newbie when it comes to trading, but I'm generally bright enough otherwise. I was a computer programmer for 10 years and that might come in handy later. Although I try to limit myself, right now I want to spend every waking moment just learning about the stock market, economics, and trading. Plus, I have had an inexplicably lucky life. No explaining it.

The Bad
Before January of this year, I would almost rather listen to someone explain how a car worked than listen to my financial advisor. What did I care what this Green-something guy was saying? Of course that's all changing now, but it would have made things easier if I'd paid even a modicum of attention to the workings of the world of finance before 2008.

The Ugly
I opened an Etrade account and bought bank stocks in early January. Forget what the people on BNN were saying, I wanted to get in there while the price was so attractive. I started off with a buy-and-hold mentality. But of course, I bought on the "dead cat bounce" (does proudly trotting out that phrase just highlight my newbieness?) and then watched in horror as they started falling further. I wanted to sell but between the input of my family and my own hopeful nature, I held on. I still have a couple, but sold some at a loss too. The whole ordeal made me want to switch to short term trading. Surely it's easier to predict what will happen in the next few minutes than it is to predict what will happen a year from now? Oh yeah, and the ugliest of the ugly is that I am getting fat. I retired at 40 and had been spending all my days playing tennis, jogging and strength training -- best shape of my life. Traded that in for sitting the entire day, drinking coffee and eating granola bars.

The Plan
I'm trading stocks on the TSX exclusively. I just tried shorting for the first time this past week, and it's thrilling to have "something to do" on down days besides just mope. Ok, so the truth is, I don't have a plan. I have read about all the technical stuff (support and resistance, MACD, Fibonacci levels, candlestick charting etc). They all seem to be, well, a bit hokey. Sometimes I feel like a stupid sheep, carefully studying methodologies that worked 30 years ago but are almost meaningless when the market makers get in there and shuffle the decks. Guess maybe right now I would be a trend follower more than anything. I'm going to try some more paper trading next week and work on an Excel spreadsheet (nothing brilliant, just an extension of the one that IB provides).

As of today, I have $11.8k in the account I am actively trading with. The bank stocks are in another account where I've lost $3k of $35k overall. I may trade occasionally in that account but it's meant to be a longer term thing. Too much to go back and document all my mistakes to date, but I'll share them with you from here on.

Feel free to jump in if you have some advice. Btw, I don't offend easily. I love all the thought provoking debate that goes on in the threads and the colourful insults give me a giggle.

 

My only advice would be trade on a simulator 'til you learn the ropes. Could save you a good deal of anguish and give you a chance to see how far your 'luck' can take you without causing harm to your bankroll.

Best of luck in any case.

 

Hey thanks tomahawk. I'm going to do that, but I'm mixing it up with a little bit of real money on the line too. Kind of like playing the nickel machines at the casino (only I won't be wearing diapers).

 

Good luck. there's plenty of opportunities on the TSX, except the volume isn't as big as in the US of A.

 

I used to think paper trading was worthless, and didn't teach a thing. Then, I started journaling my trades, with each bit of logic behind the trades, and, MOST importantly, I had a column on the spreadsheet that was for emotion. Yes, even on paper trade, I had emotions because I truly tried to simulate trading.

So, paper trading can be helpful if you dive into it.

Good luck to you, and boy do you know how to title a thread.

 

Switch to futures and learn how to manage your risk and position size up as you increase your account size.

It'll give you a lot more bang for your buck ... and you can see just how lucky you really are.

 

Fat and ugly.

It's a good thing you're going to be rich.

 

Deaddog – lol…pretty brave for a guy named “dog”.

MandelbrotSet – I am definitely interested in futures and options. From the talk on this forum it seems to hold more promise. But not yet. I need to get the basics down first. In the meantime I’ll try to have a look at some of your posts on this forum, see what I can glean without taking up your time.

Paden – Sorry, I meant the thread title to be amusing, but perhaps it is false advertising? Please feel free to document your trysts here, if that’s what you were looking for. This whole trading thing is not exactly a little blue pill though.

Jazzsax - Yes, there’s only good volume in the first and last hour and even then only for the large caps. But the neat thing is that the TSX is so influenced by the movements of the US markets and of course gold/oil, seemingly seconds later. On my list to go through historicals and see if this reactionary movement can help me with trading. May need more than an excel spreadsheet!

 

Well, I'm rooting for you LuckyGirl. Nice to have a lady around here... I find myself in a somewhat similar position to yours. No interest at all in this stuff until about a year ago etc etc. I find that I've stuffed more data into my brain in the last year than I did in the previous ten. It's alluring and exciting to say the least.
Keep plugging, stay small and don't get cocky (it kills).
If you find that the chubbs are a big problem, what with all the sitting, try to do some isometrics, stretching, and a bit of yoga while you watch the numbers fly by your eyes. It helps to pass the time in trades as well. If all else fails, you can call me, i like a bit of meat on the bone Happy hunting!

 

Hi LuckyGirl,

congratulations to your decision to become a trader!
As you have already experienced, it is not as simple as it seems to make profitable trades, especially in today's markets.
I think it is a good idea to do some trading with real money because this way you will experience all the psychic stress involved in trading real money. But, when you like to try to trade with real money: use strict risk-& moneymanagement. Buy some good books about this subject! In my opinion it is the most fundamental skill for a trader!
Without decent moneymanagement you will go broke sooner or later!
Especially if you want to spice up your trading with options or futures you're lost without money- and riskmanagement.
Another thing: if you really want to dig into trading... trade long AND short sides of the markets... you can also make money in a falling or crashing market (and most of the time faster than in bullish markets).

Wish you the best fortune!