Getting Started Part-Time

Hey winners.. After browsing thru this instense forum, I've learned alot about different type of tradings. I want to start trading part-time but the challenge is that some thread say that day-trading is the way to start learning. I'm in Swing Trading because (please correct me if I'm wrong) it seems to be a slower paced trading strategy.

Well the question is basically, what kind of trading should a beginner/wannabe part-time trader start with? What is the recommended startup capital?

BTW, I'm reading on the Jack Hersey Equities Method, which I'm planning to "break-in" with. Am I on the right track?

Thanks for all your help.

 

I am a beginner too and I am starting with swing trading. Day trading is VERY intense!. And your account will be reduced to rubble quickly if your not careful...its been said that traders become better after they blow one account..to learn to day trade can cost as much as a 4 year college education.

Not really sure what to tell you because I dont know how much you know about trading and the markets as a whole, but the idea that you can make 50,000 a week and just place a few trades in the morning, hit the golf course, and go flat at the end of the day is NOT reality for most people as it appears in the books.

Stick with swing trading, it will give you a security blanket to have a job and still be able to trade, part time. I have a part time job and trade the market from open to 1:30 ... I do my research, place my trade, put in my stop, go to work, come home, check prices, next day..take profit..or hold longer...repeat process.

start with about 5-10,000 ...lol i'm trading with 1,000, but day trading needs about 25-50k...100 shares of apple will cost about 5,000 dollars!...just for 100 shares!..thats minimum...i hope you see what im getting at...5-10k is still not a whole lot, but its a good start.

well i hope this answers some things..

- nate

 

Let me guess:
You are female
Age 25-30, maybe low 30’s
You are unemployed or underemployed.
You are smart and not lazy.
You like fast cars and good clothes
You have a strong mother and/or an absent father
Some, if not all your wealth comes from a risk-taking venture – and I don’t mean the lotto (part could be the sale or equity in your home).
You are an entrepreneur and not a bureaucrat.
You may be bi-polar, or at least manic.
You have traded before, but not consistently or full-time.
Probably with only a couple of positions at a time.

You may have what it takes to be a successful trader, but you must reconcile your manic tendencies with the reality of the hard work and grind that a good, successful, consistent trader endures.

The number one trait of a successful trader is simply experience. Nothing, except pure luck (and that won’t get you long or far), supplants experience.
No book, web-site, or even mentor will replace the trial and error (and you will error) of good experience.
Trading is a grind. A daily grind. A multi-year grind. A multi-decade grind. If you are good, and in a uptrending market, there can be extraordinary upside pops.

You can trade your entire bankroll, but only if you make capital preservation (and not maximum or fast profit) your number one goal. That means diversify and diversify intelligently.

If you get good, and I mean consistently good over an entire economic cycle (read multi-year), you can use leverage. In the mean time, imagine that you could/would have doubled your gains and your losses and magnified the effect of compounding.

Unless you have some inherent information edge, you should go long equities to start with. If you do have an information edge on some commodity or currency, triple that edge, ie. Research, research, research.

The overhead in derivatives can slowly squeeze the life out of a beginner’s bankroll. A lopsided information edge will wipe it out. Learn the equities market first, then branch out to derivatives if that suits you.

In regards to bankroll, a couple of “rules of thumb:” A goal of 2-3X the market (S&P 500), or 2-3X your largest downside risk. These would put you in the range of 20-30% upside goal, or $30-60k/Yr – and that assumes trading full-time. There are ways to increase that, but for beginners, don’t count on doing much better than a burger-flipper in the beginning – and that’s if you can avoid the downside or a complete wipeout. Many successful traders started at the bottom of some trading firm and gradually built up enough capital to strike out on their own. On the bright side, most of the best are self-taught – starting with much less than you have. You will learn faster if you use your own capital.

Your IT background could help in a significant way: to learn, you must track. Track all your trades and learn from them. Build a relational database of all your transactions. Learn to manipulate, sort, and graph the results. You will see patterns, find and minimize mistakes, and optimize your trading and money management strategy. If you swing trade, your cycle will be short - weeks or months, instead of the years and decades of an investor. That could be a real advantage. In a year you could experience what investors see in a decade.

It does help to read. I suggest studying both fundamental and technical. Can you read, and thoroughly understand financial statements? That’s a beginning. Do the Graham, Buffet, Lynch thing on fundamentals. Murphy, DeMark, every book you can find on candlesticks for technical. Peruse the wizards and masters of Train and Schwager. Absorb money management tips and rules from Elder and Tharp.

Good luck

 

You are correct. Nothing wrong with swing trading. I swing trade as my primary vehicle -- and I do some limited price action-based day trading...

My advice is to understand who you are. Know thyself. Then once you figure out how your personality is, figure out how you'd like to trade.

For example, I like to watch things develop, and I like big wins. I also don't have time to day trade, but I am starting to branch into it since I trade FX now and I can trade late at night during the Tokyo markets...

Re: starting capital. If you're trading equities, you should start with at least $25,000 + account minimums in order to clear the PDT rule. Anything less than this and you could get whipsawed out of good positions, and not be able to take trades while you wait for the PDT rule to clear. Daytrading is possible -- albeit poorly for only three days a week.

Sure. Any good, time tested method is ok to start with. I would suggest, however, concentrating more on the psychological aspects of trading. The headgame aspect is the most important aspect of trading.

 

to get exposure and experience I would suggest to make as many transaction in a day on an etf like qqqq or dia or spy; trade with only 100shares where any loss is more or less meaningless...u'll become accustomed to price and will learn from your mistakes very cheaply....this should be an integral part of your strategy: keep swing trading as well.