I started trading less than 2 month ago and I want to start a thread to share my experience with other newbies, as I think this could be mutually beneficial. I exclusively do daytrading and I have to say I am very frustrated by my results. Attached is the change in my equity since I started trading. As you can see, I did not get anywhere after more than a month of hard work. I have an account of 30K. I trade part time only, mostly before my day job (I live on west coast). I am able to survive so far because I never blow a stop and I keep my stop very tight, and I strictly limit my size between 200 to 1000. I read more than two dozen books and I read several of them again and again before I started. And Iâd say my IQ should be above average (as evidence by a PH.D degree I have). Throw in your experience when you started trading and I will appreciate it. Frank123
Maybe a question to consider is why you would expect to be making money trading in the first months. Trading is no different than any other profession, the learning curve of most professional traders is measured in years, not months. Most I know, whether on floor or off, worked a second (and maybe third) job for several years while they learned to trade. It is a common misconception that most people make money from the start and are financially independent after a year or two. It would take you 4-5 years to become an entry level engineer or journeyman plumber, why should it be different trading? The good news is that it is certainly possible to learn to trade and make a good living at it. The bad news is that it is really hard work But, if you manage your losses, the profits have a way of taking care of themselves. Once I learned that, it took about two years for me to make a middle-income trading, and another two before it was comfortable and felt reliable. That was after 15 years and 4 or 5 blown accounts previously. I now trade for a living, I'm an exchange member (CBOT) and my experience is pretty typical of the folks I know. Trade small, and give yourself time! Jessie
I think it is more than possible to get a PhD with an average IQ. Don't be frustrated just yet, they say it takes around 3 years to "get it". Tight stops are a very good idea while you are not yet profitable, but when I was at your stage of development as a trader (I suppose) I used to go long OTM options instead: If I were to be right about a trade (which did not happen too much), I would make between 50% and 300% on an option position within a few days, and if I was wrong, I never sold the option, I just waited for it to expire. I have since learned the following: If you buy an OTM option outright and it turns against you, it just about never comes back, so you might as well sell it for a 50% or 70% loss. And If you buy an OTM option, you basically pay a "lottery premium", meaning the odds are against you. But the one big advantage for the beginning (and therefore most likely losing and losing badly) trader is: If you are long a stock and it gaps down 20%, you are out 20% no matter how disciplined you are and how good your stop, and those 20% are probably five times your profit target or more. If you are long an OTM call and your stock gaps down 20%, you probably lose 100% of the option value, but that is only about 50% of your profit target. It's just a suggestion, and don't come suing me for telling you to go long options.
Frank, Like Jessie said, it takes time to be consistent profitable at trading. I am sure you are very good at your regular job, look back and see how long it took you to get where you are now, a few years for the B.Sc., and another few for the Ph.D., and all that experience gathered through time after that. Unfortunately, IMHO, it's the same thing for trading. Or put it that way : you know nothing about restauration and cooking, and you've decided to open a restaurant. How long do you think you'll have a successful and profitable restaurant? Just have to be patient, keep loss tight as you're doing to protect the capital, and to allow you time to learn. Cheers!
Exactly. If you get 3hrs sleep a night and use only 1 monitor, and have little experience and start trading at 22, and if you aren't watching the markets 1/2 the time even though you're not doing anything cause you dropped out of school, you too can make $15 g every week!