You ever have time to do any reading after the market closes-- are do you have more important things to do -- and expect others to give you all the answers? In other words-- if you're not willing to work really hard, particularly in the beginning -- try something else. In the final analysis- what works for one trader may not work well or suit your personality. You need to early on- find your own niche and trade in accordance with your OWN drummer. Not everyone can swing like Tiger Woods -- but many many can shoot below par ---- playing their game. Ice
My god this is one of the most vacuous responses to this thread yet. Right up there with Risktaker's usual BS. Foible, since you have found a willing mentor who makes a few grand a day, you're better off just leaving the prop house and camping out in her office for a few months. While you're there, read everything you can get off of her bookshelf in the off hours. (You seem to be doing better than most, actually, for your first month of trading.) You might also want to ping optioncoach and a few others on this forum for more info on the benefits of different approaches -- prop houses have frighteningly high attrition rates and everyone here is basically right about them. Think longer term. Take a more studied approach at first. Jumping in with both feet and with very little capital, even if you do jump through all the prop house hoops, is still a very risky way to get into this business. I have known some very intelligent people in this business who started with more money, developed solid money management plans and good trading models, and still washed out in under a year. They were surgeons, retired attorneys, mathematicians...smart people. When I think back, the hardest stories came from those who joined prop firms. When I think about the people I know who have succeeded, they started in legitimate asset management firms or on their own at home and all of them had a mentor! And they merely survived their first three years -- none of them hit homeruns during this time period. The really successful traders I know personally (I can count them on one hand) weren't making any real sort of money until they hit the five to seven year mark. All but one blew their accounts more than once in the beginning, but had fortunately only risked what they could afford to lose. Seems like you're pretty well set up -- (1) You're only risking $5K, (2) You've found a willing mentor, (3) You're smart *and* savvy. Think of this $5K as tuition and make the trades count for something when you're ready to make them -- my personal opinion is you're better off leaving this firm and striking out on your own with some solid rational analysis and a good trading station. (You don't need to lease a desk at a firm to get these anymore.) Someone will invariably jump in here and tell you I'm full of $#!t. They just might be right. In the end, it's really just surviving the first year (i.e. sound money management!) that will allow you to take the next couple of years you need to gain the knowledge and experience required to move to the next level. My 2 ticks.
foible: Out of curiocity: 1) What's the name of your prop shop? 2) Where is it located? 3) What are you current commsiions per share? 4) What other fees do you have to pay the shop? 4) what was your initial capital ($$$) contribution to this shop? 5) how long is your initial capital locked for if at all, e.g. 1 year?
bastiat8, I don't think it would be hard to guess which shop I'm at, but I would rather keep the focus away from gripes about the shop which I think are incidental to my success or failure. I pay a small comission per trade, but not per share (this is currently waived until I get more successful). I have to pay a small monthly fee for Level II data entitlements, but that's it (we even get free, if sketchy, charting). I have not made any capital contribution at all. The catch is that I keep only a percentage of my profits, ranging from 35%-55%, depending on my monthly net income. Not too terrible, seeing as how I am playing with their money. I initially thought this would be a good, low-risk way to learn how to trade. But as I have starting capital and am not being taught much, this doesn't seem like such a good bargain. On the other hand, it is sure nice to know that even a 0.01/share profit can yield a respectable return. After a month when I have refined my trading strategies more, I will be comparing the profits I take home at this firm versus the profits I would take home at firms with different comission plans to see where I get the best bang.
theSnaggle, I'm getting the feeling that I've underestimated the importance of a good mentor. It has been raised several times already, and even people that disagree on other points agree on this. It would cost a bit of money to camp on her doorstep, but if I can make even half of what she does, I think I'd make it back in a couple days - a week, tops. Put that way, it seems like a no-brainer. Okay, well, I'll see what I can do. With the holidays, it may take some maneuvering. Let you know...
Day started with a long string of losses. I had some idea stuck in my head about the direction of MOT and I kept trying to go long when it was falling. This is the second day this is happened, so hopefully I'll learn it this time. I pulled back from a $22 loss to hit my second $50 for my milestone. Once I dropped some of my preconceptions and didn't try to be in the market at all times, it became much easier #trades: 36 #shares: 8200 adj net: $50.96 gross: $55.00
foible, My #1 suggestion (as it seems people are handing alot out) would be to get your system on paper. I found that when begining, it helps alot (discipline, confidence, emotions) to have your trading system documented and sitting right in front of you when you work. It would help avoid mistakes such as trying to catch the knife. Also, by putting it on paper, I found that I have a need to further develop/fine tune a trading system. RT
you wanna talk suck, i shorted mot today at 60 and covered at 62... only to see it later end up at below the whole dollar :eek:
The inevitable blowup. "Inevitable" because I have been trading more volatile stocks and haven't bothered to formalize any position sizing or stop loss system. Well, I lost enough that the firm stopped me trading for a few hours, which gave me time to try to work some things out. First, the firm imposes two stoplosses on us: a max $50 loss for the day and a $25 max loss for the half-day (it's actually the highest of $50 and a weighted moving average of the past several day's performance, but as I haven't made much more than $50 yet, this hasn't any effect). And, until we graduate, our losses don't accumulate, but just serve to make us restart our milestone attempts, which in turn delays the time that we finally take home money. So I need a stoploss and position sizing strategy that will allow me to take, say, three or four losses in the morning and another three or four in the afternoon without blowing over the $25 limit. It will have to vary with the strategy I'm employing (e.g.: trading for a move, or for credits). The credit/spread strategy is relatively simple as I expect only a 0.01 move before I get out, but momentum trades are more difficult. I came up with this: - position size needs to be small enough that I can lose the longest of the previous 3-5 candles and be down $6 - target profit should be 3-5R - must specify on paper my stoploss and target profit (I may let it run, but need to have some reason to think the stock can move that far) - for a moving stock, R could be roughly 1/2 the weighted volatility found on trade-ideas.com. For a consolidating stock, R should be much tighter Probably needs more rigour, but it's a start. See how it works. As a counter-example, the first trade I took today was with AMD. The candles were huge (.12-.18) and overlapping, showing a lot of volatility and uncertain direction. I bought just after 10:00, in time to be at the top of the dumb money move, just as the stock faded from the opening. And, to be fun, I had far too many shares so by the time I was able to get out, I was down $21. My next trade was a little better, but I still got stopped out, and that was my day until 1:00. After that, since down $50 is the same as down $1, I tried moving larger blocks of shares in the sleepy afternoon. As 3:30 came up and I hadn't made it profitable, I took bigger risks (why not, it isn't real money) and ended up down big. Oh well. Back to the beginning tomorrow. This time with some better discipline and the start of a position sizing strategy. (And RunTrade, I took your advice and tried to write out as much of my strategy as possible. Still needs work, but I think it's start. Shows clearly what needs work, and what I've been leaving to luck or hope, ugh.) #shares: 10800 #trades: 39 adj net: -$47.88 gross: -$42.00