im new to trading and havent gone thru major losses, but i agree with worldcrusher's advice. here's my own advise. learn futures. no pdt rule. less charts to watch / keep track of. and when starting out that's pretty important so you dont get too overwhelmed. start there and save up to one day be able to day trade stocks. being able to only day trade 3X per 5 days plays too much on the psyche. keeps me looking for that white whale of a trade and in the mean time i miss out on plenty of good smaller trades. i think i understand why this rule is in place and why so many people loose money when they start. or maybe everyone starting out should trade the opposite direction of what they think they should.
If you can borrow $10k off a friend for a few weeks you can open an IB account and then just withdraw the majority of the funds. They give you market data for next to nothing.
Thanks again Daryl, you've been a huge help/moral booster. Do you (or anyone) think Forex would be a good place to start as well?
Yes I think Forex is good, but maybe for reasons other than making money. You can open and fund an account with next to nothing and actually get some "skin in the game" for around $70 for a 10,000 lot of a pair such as EUR/USD. I believe some firms, actually let you do it for even cheaper.(The big "O") This will at least let you learn what it "feels" like to trade and lose or perhaps even make a bit of money. I actually recommend it to many close friends so that they will start to understand what trading is really like. I heard someone once say, "You will never be as bad at something as you are right now." Experience is very important. And while you are gaining it, you need to do it for as cheaply as possible. I wish you the best!!
Seems simple enough, now all anyone has to do is "get" 50K or preferably 100K. I am about to trade with a borrowed stake. I used a low interest credit card advance, which is good for the life of the balance. As part of my plan though, I have set myself up with several part time jobs that just cover my living expenses by working afternoons and evenings, mostly outside of market hours. These jobs would interfere with a full time 9-5 though, so doing both is not an option. I also have some backup living expenses saved. I can make nothing from trading for quite a while and still be fine. The goal at first is learning to grow the account, slowly increase my position sizes, and someday reach a level where I could support myself from trading. Until then, any gains no matter how small are acceptable. Even breaking even or small losses are acceptable for a time as long as I'm learning. If I fail and lose the whole stake, I'll have to pay it back at a rate of a few hundred dollars a month for a few years. That would suck, but it seems the same result to me if I had saved that money for a few years and lost it. Plus I get to start now, instead of years from now, and I feel I have to act while my situation allows it.
I do not think that Forex is a bad place to start, as long as a beginning trader starts out on a good simulator. The inherent problem/benefit of currencies is the enormous leverage. A new trader with leverage is a lot like a kid in a candy store. So the simulator permits the new trader to get a feel for this market and how leverage influences trading it. In my experience, I have seen that there are three components necessary to become a good trader: 1.) discretion, 2.) money management, and, 3.) a respect for the markets. Discretion is the ability of a trader to look at the indicators and the given situation and be able to use his/her discretion to know what is important and what is not. The ONLY way to learn discretion is through experience. Money management is more important than the trading methodology because all trading systems eventually lose money. It doesn't matter how much was gained if it is all consumed on a losing trade/day. Respect for the markets comes from losing money to the markets. Quite frankly, I do not know how to learn to respect the market any other way. I believe that is why almost all successful traders have blown out their account at least once in their career, Many I have met have done it multiple times. So while I suggest using a simulator, I think it will eventually come down to losing money to really learn. (Every kid seems to have to touch the hot stove despite being told over and over again that they will be burned). I accept that as a basic quality of Human nature and ultimately each trader will make their own decisions. Sorry if this message is a bit bleak. My intent is not to dissuade you from trading; only to save you some of the painful lessons I had to endure and to be as honest about it as I can be. Sincerely, Daryl