There are many possible courses of action when starting out. You can attempt to become a scalper, daytrader, swing trader, position trader etc. You must pick a time frame to initially focus on. I recommend before you start day trading you try to figure out a way to make money either swing trading or position trading, as these methods are easier and you will learn how to follow rules much easier as things happen at a slower pace than intra-day. Focus on stocks and not futures at first as there are more inefficiencies to exploit. Look at a lot of charts everyday, get a feel for how stocks move. Put a lot of time into it if you want to increase your chances of success, but view it as a hobby. Have a back up plan and work towards establishing that back-up plan (like another job, etc). Manage risk, just try to stay in the game for as long as possible, the longer you are in the game the better your chances of figuring something out. Expect to have figured something out many times and have many light bulb moments, only to realize shortly there after that you hadn't discovered the holy grail. You need a strategy, people talk on and on about psychology and money management being the most important aspects of trading, but you first need an adequate strategy and then psychology and money mgmt become much more important. Take very good records as this will help you identify potential patterns of what is working and what is not. It would not hurt to learn how to program but you must first learn how the market moves and works.
S.Cromwell1989, While you have received some good advice (and I especially like Visariaâs advice) you probably donât want to hear the truth: You are not even close to being ready IMHO. You are too young. You need more life experience to learn more of the nuances you canât learn reading books (which will help your foundation). After the basics, it is screen time and more importantly, managing yourself and the myriad ups and downs you WILL encounter. Especially given your background, you are used to getting your way and being successful and what has helped you achieve what you have achieved will kill you in the trenches of trading. You really need to accept that failure (losing trades and money) is a big part of trading. In my opinion, not having experienced it and felt it with your soul, you wonât have the iron discipline it takes to do the right thing at the right time and trying to prove yourself correct (which reaction has been reinforced your whole life) is one of many things that will try to kill your account. I have met the enemy and it is us. Having said that, enthusiasm is a good beginning but you have to want to learn it, love it and breath it to have the chance to compete and prosper. Learn the basics, SAVE as much as you can and just watch the market as that is the best teacher (short of a mentor willing to take you under their wing). The market isnât going anywhere as I believe in 5 years or so you MAY have more perspective and you will learn more about yourself, which canât be emphasized enough because if you canât master yourself and your emotions, you could have the best system or edge in the world and still fail. Learn about expectancy and its importance in helping you reach success and how it is your best friend. I know for sure I wasnât ready until my late 20s as I just wasnât mature enough or humble enough to learn the lessons you need to. And I only realized with hindsight so if told that at 20 with the means I donât think I would have been successful. Maybe you will be that 1 in a million 20 yr old who gets and doesnât repeat mistakes but the odds are not in you favor. Also consider your competition. It is my job to take your money and everything I do is geared to making that as easy as possible. We (the collective of the trading world) are paid to take advantage of the unprepared (of which there are many). Donât jump in without full preparation and a solid trading plan covering every contingency because rest assured your competition knows what to do and how to take advantage of your mistakes and will without hesitation or remorse while robbing you, knocking up your girlfriend, stealing your car and pissing on you head if you panic and do the wrong thing at the wrong time (think Tommy Boy when Tommy makes his first sale about a guaranteed piece of crap and what he says leading up to that. Many will understand my point here). Many will disagree with this and that is ok. So take all advice with a grain of salt including mine because as an adult now, you are responsible for your actions and you alone. And even though the road is hard, if you really want it, give it a shot when you are ready. But it wonât come easy or with any shortcuts. Best of luck BM
Markets Make-up is I THINK very complex for any one or a group of traders take advantage of others, or as BM put it your competition will take money from you. An example, if you were long for the last one yr. nobody would have taken your money !! May be some one gave it to you ??? Market's movement is a NET result of trades made by millions of investors on varied time scales with different strategies/targets/risk profiles. With that said. BM i believe you meant that a good trader will understand what is happening in the market and be able to take I just want OP not to be scared. Coz pu**Ys can't win anywhere !!!
I used to think that but I realized that prices can move without trades. It may sound like I'm nitpicking but I think it's important to understand.
Others have said it, but I'd condense my advice down to 1. Keep as many statistics regarding your trades as possible, whether they be real or simulated. Win/loss % and ratios, profit factor, Kelly/optimal f (don't necessarily use them for position-sizing, but they'll give you confirmation your method generates positive bet sizes) are some of the key ones. 2. Realize (and I mean really realize) that you can be right less than half the time and still make a ton of money in this business. Someone mentioned that being successful in other areas of life often doesn't translate into trading success and I think this is one of the reasons. People who are successful in other areas are used to being right nearly all the time, because that's how success works in other areas. It's not necessarily so in trading. If you can't handle being wrong, you will always struggle as a trader.
Thank you for all the great advice. I have read each post more then once and I think I have myself a plan of attack. After researching different trading styles, I think that some form of stat arb will fit my personality better. So I have bought a few books from amazon on the subject, as well as the number of threads on here and a few other sites have been great. So I have mathamatica 8 and chaos hunter and I will be using those to develop trading strategies, and I now have access to amibroker. Next thing I need to do, is to find a decent data feed since the sterling demo is pretty much useless. I am thinking about IQ Feed, seems to have what I need for a hundred or so bucks a month. After talking to my Dad about what some of you have said on here about learning on some other persons money, my Dad wrote me a check for 10000 dollars to open an account. It's a gift, so I don't have to pay it back he said (He just better not skim some money off my pay ). I think I am off to a good start with the necessary tools and circumstances to give trading a go. As well as if I focus on automation I feel that I can avoid a lot of the newbie mistakes, with not following a trading plan, get too emotional etc. Anyway if you guys have any other advice, keep it coming I really do appreciate it. BTW MTLPropTrader, I just got back from Montreal for my birthday/new years and man you have one hell of a city.
Let me save you the time. I would shy away from the fantasy of stat arb. The best definition really means free money on a very short term time horizon. There are 2 problems for you in regards to this subject. 1. There are too many players in this game already. 2. They all have co-location and can work these opportunities well before you. This is assuming you do not have the capability. Another problem is that you might "see" this opportunity, but when it comes down to the real trading environment and not a live simulator these opportunities do not appear anymore. You will get eaten by commissions and the spread. By all means try it out though, maybe you excel in something that others do not. I just wouldn't put all your effort into this subject because there is a very high probability that you will be let down. If this indeed does fail just remember not to give up. There are plenty of ways to earn a few ticks here and there.