A few suggestions: 1) If you started a month ago, you started in the toughest market environment possible. The volume and volatility has not been there, and many many professional traders at my firm are having a hard time. Therefore, if you can control your losses, don't feel bad, you are not doing as poorly as you think . . . 2) Depend on where you live, if at all possible, work for a Prop. firm, why lose your own money when you can lose someone else's? Believe me as a beginner your survival chance in this business is very low, I am not trying to discourage you, but just by joining a firm your chance of surviving would be at least doubled if not tripled . . . 3) Be sure you have the right equipment and broker if you are trading by yourself, it would be very helpful if you can give some details of what you have been doing. Then we can be more specific with our suggestions instead of offering you the dime a dozen generic stuff. Good luck!
Hitman, What's your prop firm, worldco ??? I hope they don't read your posts man Anyway you are of course 100% right on the money !! Cheers
Hitman, I'm curious who your firm is too? I'd love to lose someone else's money and not my own. Not too sure how that would work. There is a "Bright Trading" office in my city that I'm considering switching to. They require a $25,000 deposit and all losses come out of that. You can use their money as long as you win but if you lose it's your own money. Only makes sense. I wouldn't do it any other way if I owned the place. How does it work for you?
I've walked in your shoes, so feel comfortable in asking you to log on to http://www.undergroundtrader.com and see the light. Give them your time for a few days and follow thier advise and you will be astounded at the clear and concise means to profitably daytrade.
Thanks everyone for all your helpful advice... Hello Hitman, Now I will try to answer your questions..which are my problems. A Brief History of Mine: 1) I started 'investing'(INVESTING NOT TRADING) on Febuary 2001, which is one of the worst time one can get in market. Got hit real bad due to the earning seasons.(Stupid me!) Seeing the volatility, I knew that this is not the time to invest so I tried 'hit and run' techniques..So far I manage to recover my loses. I started with 13.5K, went down to 12k, then up to 17k and shit when down to 13.8K (which is now!!!) Don't ask me how I did it, it was pure gambling, ...I know that Ms.Luck is not going to accompany me sooner or later. This is why I am looking into real solid techniques that can give me constant profits.(I understand that losing is part of the game) 2) I am from UK, so there is currently no Prop firm here, I would love to get into a prop firm if possible. (hahahaha). I understand the probability of my success, but I am willing to take the chances. The new SEC law, is going to make it tougher for novices like me...(can't short sell, no margin unless you got >$25K) 3) I moved to Datek (1 month) ago currently (Shit! Not datek). So far I got no problem with them since I normally trade less volatile stocks. I used quotetracker with datek to trade. Trade confirmation is normally around 2 to 4 s for Nasdaq limit(if you are in inside bid & ask), and around 5-10 s for NYSE market order) I traded oil&gas and biotech sectors..I dare not get into those hot tech sectors (fibre optic, wireless, software...) since I got burned real bad. The Bid and Ask can change lighting FAST...It's for the professionals. I might move to other broker, if there is any suggestion, IB may be. I would like to move to MBtrading, but they do not support UK. For DAB, Only EXP Trader supports UK, but their software is very unreliable, always f**k up (hang) big time. My connection is through 56K modem..I got no problem with the ISP. 4) I trade only 100 shares for each trade. With this in mind the commission normally kills my trade even if it's profitable, cause a round trip is $20..and you need 0.2 point just to break even. As you can see, I am not a scalper...I look for a minimum of .5 point or more. I would like to increase my trade sizes but then everytime I push it up to 200, I lose...(WOnder why!!!) Which sucks up all my winning trades.....(Until now I just could make it break even (pathetic $300 profit so far Hahahahaha, very sad).I hope to feel more confident before pushing up the trade sizes. My reward/risk is normally 2 to 3. I try to have 1 entry point and 2 exit point (protective stop and target) before executing my trade. I also got trailling stop for protecting my profit. 5) I am a TA guy you see, I do not use level II to determining my trade (only for getting good price). So far I use only the auto route feature since I am trying to focus on my techniques. I use charts (compx, trin, tick,..sector indices,) with T&S (volume) to time my trade. My normal strategies are breakout play using S/R, trendline, channel breakout (I found this too fast sometimes, cause everyone is doing it) and fibonaci retracement. I do not trade the first 40 minutes, cause I could not anticipate the direction of the stock. I only trade with a few stocks that I feel comfortable with their movements. I refrain myself of jumping into a trade that is not in my watch list. I mormally stop trading after 11.30am-2.00pm since I get sucks into false moves too many times. Thanks depe, for your recommendation, but I felt that I need to stick to my technique or at least try to find my problems and improvise it. I found that different traders got different styles and level II reading is not in my list yet, probably I will pick it up sometimes in the future... Really appreciate your recommendation.... Please feel free to give any comment, thank you. (The more negative the better as long as it is constructive)(Hahahahahaha) I am really grateful to you all for 'sacrificing' your precious time to assisting me. Cheeri'o
Joytrader: Before I get to the specifics, you are doing fine, don't worry about it. Before I worked for Worldco I was doing Datek and Quote Tracker and I felt like I was flushing money down the toilet day trading with that set-up, if you are making breaking even with a crap box like that you are doing great, believe me. Even when I started at the firm, I never had a $100 day trading 100 shares, and first month and half I had 3 winning days . . . But seriously, for someone with your set-up I would recommend swinging trading, it plain sucks, no offense, it is like bringing a knife to a gun fight, sure you can still make money with it if you are godly, but it stacks the odd further (to the point of being nearly impossible) against you. At least move to IB, trading 100 shares there is no better online broker and their execution is light years ahead of Datek's. If you trade Nasdaq, you gotta have Level II, it is just that simple, no Level II trade NYSE. There are many chart packages out there and I am sure someone on this board can give better recommendations (everything I use is provided by Worldco so I don't do research on those), Quote Tracker is awesome for someone tracking his E-Trade account at work and I think it can barely get the job done for swing traders, for day traders (I beta tested for them when I was a newbie), in day trading, it is garbage. Last but not least, you gotta have more than one monitor and a fast connection, I started with 2 at my firm and I had a lot of trouble, as soon as I got my third monitor I went on a hot streak because I was able to watch so much more stuff. A fast computer helps, also you gotta get a faster connection, your 56K modem is alright for posting amatuer messages on boards but the biggest challenge in day trading versus swing trading is to get that fill, that one print, and it is not a good idea to race flat footed when someone is on a horse . . . Yes, there are many newbies who said "oh I am going to make money and use my profit building toward better broker/equipment/software", they are all broke now. I am sorry but your set-up is ok for swing trading, in day trading you will get nowhere with it. Your techniques may not be the problem! But I have to tell you something, everyone can read charts, it is hardly an advantage, with the exception of heavy basket traders (at least 10 positions at a time, to 100, I am serious, I have seen people trade like that), the difference between a great NYSE trader and a good one lies in their tape (TOS) reading skills, while I haven't traded Nasdaq professionally, I would say the reading of Level II and TOS is perhaps the most important, yet hardest skill to develop as well . . . By the way, there are also newbies who think day trading is about making 2 points off 200 shares for a $400 profit, 50 cents is a VERY nice trade for a day trader, in later stage of the game even a 25 cents can mean big profit when you do heavy sizes. You don't have to be a scalper, but get that "I gotta make at least 50 cents" thing out of your head, take what the market gives you, beggers ain't choosers. If you have to make 20 cents on a trade to break even then you will never make any money day trading, switch to IB! To address some of the prop. firm questions, there are threads on it just scroll a few pages, Worldco requires little to know starting-up capital, and there are traders who are in the hole 10-20K firm's money. Now before you ask how is that a smart business practice, it is a VERY smart business practice, because new traders start out with 100-200 shares and it takes a very long time for them to lose a tons of money, and if the firm gets 4 traders and only 1 makes it, it will still make money because 1 senior trader trading heavy volume will easily make it all up with the commission he generates. Case in point, I am a 8 months trader and I have made 82K before trading costs/pay out YTD, I get 36K, thats 46K firm made off me just a small potato in term of volume, that is more than enough to cover 3-4 losers (keep in mind those 20K deficit is at least 50% commissions, not actual losses to the market). This is the shotgun approach of managing a trading firm, Worldco basically gives everyone a chance (me with no college degree and a low GPA) and if you make it, you make it. And it never fires anyone unless it is of attendance issues, as a matter of fact every trader regardless of result who wishes to leave the firm hears a long motivational speech by the boss and usually gets a better commission rate / payout / special checks (kids out of college needs to pay the bill, and those checks are not deducted against the capital account, and those guys are down 10-20K). There is a reason why Worldco has most traders here in New York (550 at last count), and the firm plain makes a lot of money, there is no excuse for not being able to make it at this firm, it is as good as it gets when it comes to odds (although it is still a long shot) . . .
Joytrader, I trade from Italy, therefore I have the same limitations (if not more) you have in trading the US markets with a US broker. I have a small account and, yes, I have been trading with Datek as you. I realised, as you are doing, that if you are not trading a gazillion shares your small profits can just be useful to cover part of your fat brokerage bill. Read carefully, because I'm giving you the Holy Grail: OPEN AN ACCOUNT WITH IB!!! Whatever position you are in, with whatever number of shares (even 100), you get in the green as soon as the price goes in the right direction by 2 CENTS. BTW, I haven't been using Datek lately, but if the situation has not changed in the last three months you will also save a ton of money in slippage. Take a tour at http://www.interactiveborkers.com : you won't regret it. Guido It goes without saying that I am not connected in any way (except being a customer) with IB and whoever runs it.
Dear Hitman and Guidodf, Thanks for your comments, I really appreciate that. I will move to IB as fast as possible!!! I was wondering if any trader got any recommendation of chart packages that got integrated trading feature with IB. I felt that the IB Tradestation is very cumbersome.
Most people feel the cumbersomeness when starting out with IB, but once you get used to it, it is one of the best (if not the best) order routing platforms out there (those killer hot keys and OCA orders). As a new trader, it's probably better to watch a basket of stocks (10 at most) day-in day-out, and know them inside out, their depth, synergy with futures and individual movements, daily range etc. Just watch price and volume, maybe put up a moving average. All the indicators in those TA books are craps and have too much drawdown if you base your system on those. Think about support/resistence levels, daily range and risk/reward ratio. If comfortable with the risk for a certain trade, put the order in, and let it either stop out or make money for you. Read some good books recommended on this board so you don't let emotion kill yourself.