Short Term Trading

Discussion in 'Trading' started by jasonchr, Oct 5, 2002.

  1. dbphoenix



    It's too bad your post turned into what has become this thread. When people get angry, it's generally because they're losing money, and there are a lot of people losing money these days.

    You say you're new to stock trading, so I assume you're new to stocks since any activity involving stocks is trading. You also want to know about short-term trading specifically.

    Trading, however, is trading. The only difference between one approach and another is timeframe, and one of the most difficult choices a newcomer must make is the selection of timeframe. And only by defining your goals and determining your risk tolerance can you begin to select an appropriate timeframe.

    I used to believe that at least one or two basic books on markets were the way to go, but I've come to realize that what benefits the individual most is what appeals to his style of reasoning. If you're a deductive reasoner, then those basic books may be just the thing, and you can begin to build a foundation of information, knowledge, strategy, and tactics for yourself.

    On the other hand, if you prefer the inductive approach, then you might better benefit from buying books which deal with specifics and find out through practical experience just what it is you don't know and need to know in order to reach your objectives.

    As for basic books, probably the most important is one written decades ago by John Magee called General Semantics of Wall Street, recently re-issued under the title Winning the Mental Game on Wall Street: The Psychology and Philosophy of Successful Investing. It sounds formidable, but it's an easy read and will save you a great deal of money. Another favorite of mine is The Nature of Risk by Justin Mamis.

    As for trading, I've suggested two in another post: Trading for a Living by Elder and Methods of a Wall Street Master by Sperandeo. Both these are standards. However, I also recommend Mamis' two other books, How to Buy and When to Sell for the 90's (tho it doesn't really matter about the "90's" part). That's a beginning.

    If you're eager to get started, look at the systems in Elder's book. Find something that makes sense to you. Trade it on paper to see if the reality lives up to the promise. After you've done this for a while, you'll begin to know more specifically what it is you need to know that you don't know, and that's when you'll be able to put together better questions. Then you can go back and start again.

    Yes, it takes a while. But nobody's come up with any shortcuts yet.

    #21     Oct 5, 2002
  2. Who is FPC? Eighteen posts, two of which are here and useless rant! Wow, I can't wait to read the other posts, these are so good.

    OldTimer I have to agree with you that Master Swing Trader is an excellent book. I didn't read the one Db compared it too.

    There is so much value in that book, it seems like every sentence has a lot to say. But I will say this, it is not for beginners. I think you will agree with that OldTimer.

    Jason, the first thing to do is learn some sound technical analysis. The time frame doesn't matter because the methods to trade are largely non-time-frame dependent.

    You can learn everything you need to know about TA from the education sections found on and Also, for crystal clear examples of chart patterns try and

    Start with the basics including RSI, MACD, Stochastics, ADX, and Moving Averages. Read about triangles, wedges, flags, and pennants. Look at candles vs barcharts. Within the framework of these topics, questions will arise that lead you to other topics.

    Remember, price is a numerical representation of hope and fear. Everything known and anticipated about the value of a stock or commodity is represented in the current price. Indicators are quantified human behavior and nothing more. There is nothing magic about any one of them.

    I hope this helps. Feel free to PM me if you want to discuss more. And search OldTimer's comments. They are all worthy of your time.

    #22     Oct 5, 2002
  3. jasonchr


    Thanks to OldTrader, profitseer, dbphoenix for the recommendations and advice. As for the other posts - they were good for a laugh :D

    Still enjoying this board,
    Jason C. Mauney
    #23     Oct 5, 2002
  4. jasonchr


    inandlong - thank you for the links on technical analysis

    I think that TA has been the biggest hurdle for me. The first time I read an article about TA, my eyes just started to glaze over :) But I am making progress and this board has definitely helped.

    Jason C. Mauney
    #24     Oct 5, 2002
  5. cheeks



    No, actually it does sound rude. Since the kid asked nicely, maybe you should return the courtesy or just leave the keyboard alone. :)

    Thank You



    I really don't want to add anyting to this thread that has spiraled in the wrong direction. However, please feel free to pm me any time with questions. I will be glad to help the best I can.

    #25     Oct 5, 2002
  6. dbphoenix


    Keep in mind that there is no generally agreed-upon definition of "TA". Some people think it has to do with predicting price movements. Some people think it has to do with "indicators". Some people think it has to do with patterns.

    But TA, at bottom, is about reading charts to determine the predominance of buying or selling pressure. This is accomplished by understanding the relationship between demand and supply and how the price and volume bars reflect this dynamic. When you get this far, you'll be able to determine support and resistance levels and whether or not the instrument you're interested in is under "accumulation" (quiet buying) or "distribution" (quiet selling). Patterns and indicators come later. Everything you need to know and understand is based on price and volume. Therefore, if you don't understand price and volume, you're going to have a tough time of it. Which is why I recommended the books I did.

    So the next time your eyes glaze over, ask yourself where you are. Is whatever you're reading addressing the basics of price and volume, demand and supply, or is it skipping over all that and asking you to jump into the deep end with both feet?

    There's no hurry. The markets will be here longer than any of us.

    #26     Oct 5, 2002
  7. dbphoenix


    As I said, this is available at your library, either there or through interlibrary loan. There's really no reason to be spending hundreds of dollars on books when you'll wind up with only a few that you rely on. And there's nothing worse than spending money on a book that turns out to be crap.

    All the books I've suggested are available at your library as well. Don't buy unless you really want to.

    #27     Oct 5, 2002
  8. First of all, the same logic kinda applies on the downside. Secondly, it's not that straightforward. Yeah, a good scalper might double his money as fast as you claim, if his account is in the 5-100 grand range. The REAL money is made in more long term (e.g. overnight or over several days) positions. Bottom line is, even if the percentages are so promising (which again, I don't buy, just b/c I think scalping is like getting the leftovers at the table), sometimes it's the NOMINAL amounts (i.e. the scalability) that matters.
    #28     Oct 5, 2002
  9. And that's why you'll never make it as a scalper.
    #29     Oct 5, 2002
  10. Who said I ever wanted to???? I'm very happy doing what I'm doing and especially happy knowing that I can do the same thing even as the positions are several million $ each. I trade only large cap monsters and my holding periods are mulitiday. Noone will notice me and there will barely be any price pressure effect even if I do it on a huge scale. Which I intend to, with God's help, very soon :D.
    #30     Oct 5, 2002