Hi all. As you can see, I am new. Currently, I'm learning and struggling most with terminology and how things work. I've already been hitting the books on all of this; these questions are just a result of what all I've learned. I would appreciate it and be very grateful if one or more people could help me with my list of questions that I've developed while studying. I'm sure some will sound very stupid, but I apologize in advance. 1. You can only buy or sell futures on the entire market itself (or commodities) and not individual stocks, correct? 2. Say you're trading and you feel that a stock is going to go down for the next three seconds. What instruments exist to the trader to gain from it going down in those three seconds? Which is most lucrative? 3. Say you're trading and you feel that a stock is going to go down for the next three minutes. What instruments exist to the trader to gain from it going down in those three minutes? Which is most lucrative? 4. Say you're trading and you feel that a stock is going to go down for the next thee days. What instruments exist to the trader to gain from it going down in those three days? Which is most lucrative? 5. If a trader buys several stocks on Friday afternoon and then sells out of them on Monday morning when they're higher, what style (or styles) of trading is this likely to be? 6. If a trader “buys oversold stuff to profit from a recovery to the mean in the coming three days” and “sells overbought stuff to profit from a decline in the coming three days,” what style of trading is this likely to be? What things help tell the trader that such stocks will indeed recover in three days? 7. A lot of traders say you must have one of the fastest internet connections available to trade successfully. How true is this for the average trader to be successful? 8. What is the typical stop loss set for in a trade? Is the stop loss commonly adjusted upward with a winning trade, as the win travels upward? If so, by how much, usually? 9. What are the common minimum and ideal target return percentages per trade? 10. When one sees pictures of a trader having many monitors each in front of them (5-8 or more screens), what are these screens used for? What is usually on each screen? What would be lost by having only one or two screens? 11. About how many trades does the average trader have going at a single time on average? 12. Market orders vs. limit orders: what's the difference? 13. What is “scaling into/scaling out of positions”? I assume gradually trading into or out of a position? 14. What is “self-routing” your orders? 15. If a trader “only seems to be watching charts and tables” while they trade, what kind/style of trading might this be? 16. What's the approximate minimum starting capital one must have to do tens of trades per day? (Obviously tens of trades amounts to a lot of brokerage fees.) 17. If someone is “watching the list of the current gainers and losers and then buying some of the biggest losers and selling the biggest gainers,” what style of trading might this be? 18. Can margin be used daily when buying and selling individual stocks short-term (either in seconds or minutes)? 19. Can margin be used daily when buying and selling individual stocks medium-term (buying or selling and holding for three days)? 20. Can a trading strategy that has worked well in Japan for a certain number of years also work well in the US market? Do different strategies work or fail differently in different markets? 21. Does it make sense if the goal of a trader was to "ride their win for as long as possible" but overall they were in each trade for only "seconds at a time"? From a newbie perspective, this seems too short to ride a winning trade. 22. How common is it for a momentum day trader to decide that no stocks look good on a day and not trade for the day? 23. How common is it for a "swing trader" to decide that no stocks look good on a day and not trade for the day? Thank you.
23-22. 80% of the time there is nothing to do. 21. The goal is to maximize money. Not holding. 20. Some strategy are portable (Space or Time). Some not. 19. Yes but you need to meet the overnight margin requirement. 18. Yes but you need to meet intraday margin requirement. 17. Mean reversion. Statistical arbitrage. 16. Relative on requirements, tick value, risk ... 15. Charting. Technical analysis ... 14. Direct access to exchange, no broker (Intermediate) 13. To add or remove contracts from your current position. 12. Market consume limit orders. Limits are standing (Bids & Asks). 11. Donno 10. Hope there is information in there. 9. Ideal is P(G)*G>P(L)*L {Gain, Loss} 8. Some Adjust manually or automatically. Relative. 7. False. Relative to strategy. 6. The weather. Astrology. 5. Profitable trading. 4-2. Options > Stocks. 1. There exist future on individual stocks but there is not enough liquidity (Limit orders) to be tradable. Futures and options are derivatives. You can trade Stocks, futures and options. But only futures, options and etf will replicate an index. Warning. I decline any responsibility about these answers. They may be wrong. Draft.
Some of your question have definite answer. But lots of questions will have to be answered by you. If you want to make it down there, trading the markets. Don't be afraid about uncertainty, fuzzy logic. It's how it is. If it were crystal clear. There won't be trader. But truths only.
Hi Gooby, Understand what the different exchanges offer. https://en.wikipedia.org/wiki/List_of_stock_exchanges https://en.wikipedia.org/wiki/List_of_futures_exchanges http://www.investopedia.com/ask/ans...res-contracts-are-typically-sold-exchange.asp Not true. If your trades last minutes to hours, then 50-500ms latency won't be a problem in most cases. Be aware of the risk of using market orders. Charts, watchlist(s), positions, orders, market depth, time and sales, specific charts, market charts (equity indexes), ladders / market profile, order entry, news feed(s), tickers, optiony stuff, ... Search for: "ECN routing" "smart routing", also "add remove liquidity". Research: account minimums, commission, PDT, margin, buying power, position sizing. You could read up on the differences between margin and cash accounts. Search for "margin cash settlement" or such like. A book that often gets recommended here and elsewhere: Trading and Exchanges: Market Microstructure for Practitioners by Larry Harris
1. You can only buy or sell futures on the entire market itself (or commodities) and not individual stocks, correct? There is no such thing as a futures contract for an individual stock. 2. Say you're trading and you feel that a stock is going to go down for the next three seconds. What instruments exist to the trader to gain from it going down in those three seconds? Which is most lucrative? None. 3. Say you're trading and you feel that a stock is going to go down for the next three minutes. What instruments exist to the trader to gain from it going down in those three minutes? Which is most lucrative? None. 4. Say you're trading and you feel that a stock is going to go down for the next thee days. What instruments exist to the trader to gain from it going down in those three days? Which is most lucrative? Shorting the stock or buying a put option. 5. If a trader buys several stocks on Friday afternoon and then sells out of them on Monday morning when they're higher, what style (or styles) of trading is this likely to be? Gambling. 6. If a trader “buys oversold stuff to profit from a recovery to the mean in the coming three days” and “sells overbought stuff to profit from a decline in the coming three days,” what style of trading is this likely to be? What things help tell the trader that such stocks will indeed recover in three days? No legitimately oversold or overbought company is going to recover in 3 days. What is with you and 3 days? 7. A lot of traders say you must have one of the fastest internet connections available to trade successfully. How true is this for the average trader to be successful? It honestly doesn't matter unless you are HFT. 8. What is the typical stop loss set for in a trade? Is the stop loss commonly adjusted upward with a winning trade, as the win travels upward? If so, by how much, usually? How much do you want to lose per trade? Typically I wouldn't recommend risking anymore than 1-2% of your capital per trade. I never trail stops up unless I'm nervous. 9. What are the common minimum and ideal target return percentages per trade? What are your goals? 10. When one sees pictures of a trader having many monitors each in front of them (5-8 or more screens), what are these screens used for? What is usually on each screen? What would be lost by having only one or two screens? Consumerism. Really no need to have more than 2-3. Even one will suffice. I traded on a 15" laptop for years. 11. About how many trades does the average trader have going at a single time on average? I don't know dude let's make a Strawpoll. Who gives a shit what others are doing? There's more than 1 way to skin a cat. 12. Market orders vs. limit orders: what's the difference? Market buys at the Ask and sells at the Bid. Limit... Actually you can just Google this. 13. What is “scaling into/scaling out of positions”? I assume gradually trading into or out of a position? Nice job! 14. What is “self-routing” your orders? Riding your horse to Wall Street and throwing your shekels all over the street screaming the Illuminati is real. I think that's what it means, but you should Google first to make sure. 15. If a trader “only seems to be watching charts and tables” while they trade, what kind/style of trading might this be? Technical. 16. What's the approximate minimum starting capital one must have to do tens of trades per day? (Obviously tens of trades amounts to a lot of brokerage fees.) How much you're willing to risk per trade x 100 17. If someone is “watching the list of the current gainers and losers and then buying some of the biggest losers and selling the biggest gainers,” what style of trading might this be? Being a sucker. Statistics show buying stocks at all time highs is always more profitable than buying stocks at 52 week lows. 18. Can margin be used daily when buying and selling individual stocks short-term (either in seconds or minutes)? Ask your broker. 19. Can margin be used daily when buying and selling individual stocks medium-term (buying or selling and holding for three days)? Ask your broker. 20. Can a trading strategy that has worked well in Japan for a certain number of years also work well in the US market? Do different strategies work or fail differently in different markets? Backtest it and find out. 21. Does it make sense if the goal of a trader was to "ride their win for as long as possible" but overall they were in each trade for only "seconds at a time"? From a newbie perspective, this seems too short to ride a winning trade. Backtesting different risk management strategies will help you determine the best route to take for your trading strategy. Some may be the most profitable trading 1:1 risk reward, other's may trade most profitable trailing under a SMA, etc. 22. How common is it for a momentum day trader to decide that no stocks look good on a day and not trade for the day? Ask one. 23. How common is it for a "swing trader" to decide that no stocks look good on a day and not trade for the day? Let me Google that for you.
They have futures on stocks at the Eurex. But they trade really thinly. Untradable. I wonder why they exist. http://www.eurexchange.com/exchange-en/products/equ/fut
https://en.m.wikipedia.org/wiki/Single-stock_futures In the United States, they were disallowed from any exchange listing in the 1980s because the Commodity Futures Trading Commission and the U.S. Securities and Exchange Commissionwere unable to decide which would have the regulatory authority over these products.[2] After the Commodity Futures Modernization Act of 2000 became law, the two agencies eventually agreed on a jurisdiction-sharing plan and SSF's began trading on November 8, 2002. Two new exchanges initially offered security futures products, including single-stock futures, although one of these exchanges has since closed. The remaining market is known as OneChicago, a joint venture of three previously-existing Chicago-based exchanges, the Chicago Board Options Exchange, Chicago Mercantile Exchange and the Chicago Board of Trade. In 2006, the brokerage firm Interactive Brokers made an equity investment in OneChicago and is now a part-owner of the exchange.
After the Commodity Futures Modernization Act of 2000 became law, the two agencies eventually agreed on a jurisdiction-sharing plan and SSF's began trading on November 8, 2002.