Hi All, I am new to this forum, but have been reading posts all night. I am planning to start day trading full time in about 18 months. I am currently reading lots of books, reading forum posts (like this), and practicing with a sim account in daytrading when I can. A little background here. I am tired of the corporate world and know that I need a change. Since I was little, I have been fascinated with the stock market. When I start, I will have $60k to use while day trading. My wife has a good job and can take over all of the benefits I have at my current job. I plan to reduce our expenses before I quit to keep the overhead low. She should be able to cover the majority, if not all, of the expenses. I have realistic expectations with trading. I don't plan on becoming a millionaire anytime soon. I know there are plenty of learning experiences in which I may lose money. One of my other goals is to have extra time with my family. So I think this will fit in well with what I want to do. Finally, I don't want to have a boss who tells me what I need to do and how I can do it better. I don't handle people with authority very well. So I have a couple questions for all of you day trading guru's if you don't mind. 1. What is the best firm to use for day trading? I want access to Level 2 quotes. I have E-Trade in mind, but there may be something better out there? 2. What is the best book you can recommend for a beginning day trader? 3. Being that I have a year and a half before I get into this, what recommendations do you have for me to prepare? There is nothing that anyone can say to deter me from trying this, so please keep any comments positive. I know what I am up against.
I would join a prop firm use their leverage and learn the ropes see how other professionals grind it out on a daily basis. Then after 6 months of screen time you will have he ability to form your own hypothesis on the market you trade. May I stress to you the importance of developing your own ideas and forward testing them with Mr. Market. Eventually you will see what most fail to realize. I'm not saying to shut out other ideas but a lot of it is bullshit which is why you need to take the journey alone. If your passionate and driven to the point where failure is not an option - you will make it dont listen to anyone.
I second the suggestion that you join a prop firm. You'll get their leverage, better commisions and access to other traders (if you pick a good one). Don't worry about giving away a cut of your profits. That won't matter for a long time.
Normally I would say something semi sarcastic like "Just go balls deep. That's how you learn." But you seem like a smart guy who appreciates the risk. First of all, 60k is a ton of money to a lot of people. I'd use 10 or 20 of it, AT MOST, and use the previous poster's reco, and use a prop firm which doesn't even suggest you pay for training. You can get 30 to 1 on your cash at a legit prop firm. Even more with some strategies. Start small and test the waters, even after all of the reading you're about to do. 1. No. With even 10 or 20 K, think professionally. No E trade or Schwab or any of that crap. Get your 7 and go prop. If you're passionate about it, you will surround yourself with a team without even trying. It happened to me, even though I was determined to be extremely independent. 2. Market Wizards 1 and 2. I suggest starting with William Eckhardt's interview in MW2. The only psychobabble books I would recommend are the Mark Douglas books, and Trading to Win by Ari Kiev. 3. This may seem like a dream, but it can really suck. You have to deal with the down days in a logical way. I'm mostly automated, so it's obviously easier to execute, but every day I sit down and convince myself this may be a really bad day, but it's ok. You have to deal with that. Day, after day, after day. You'll see all kinds of crap on this site about needing an edge. Well yes, you need one. But anything which get you a positive expected return, even in the near term, is an edge. We'll try to crush your dream as best we can. If you still want to hang in there, all the best.
This is pretty good advice. The only qualification is that you will likely fail, but that you can come back and try again later. Failure only become permanent when you lose interest. Persistence is more important than determination. I also agree about doing your own thinking and testing things to see what works. You didn't talk about your background, but if you can do programming, that can be an advantage. You didn't say what markets you want to trade. I have found that there is more dumb money in stocks, so you might start there. I use IB for brokerage, but I don't recommend them for a beginner. If you join a proprietary trading firm, that solves the training and brokerage issues. I don't see how anybody can plan to daytrade 18 months in advance. You might start trading now while you are working to get some feel for the markets and managing risk. You might also think about ways you can trade fulltime temporarily while staying competitive in the job market. Now is a poor time to start daytrading and a very poor time to be out of work.
Why 18 months? No need to hurry. My first advice would be to save up as much capital as possible and not start before you feel that you are ready. You will need capital both to cover expenses and for your trading account. Make sure you only deposit a small amount in your account when you start and then add to your account ONLY after you`ve proven yourself to be consistent. Earn the right to trade size. I would say that if you`re breakeven after your first 6 months including commisions, that is a very good start. Your goal should be to not lose money when starting out, not to make a killing. It`s good that your expectations are low, because they should be. The only people who will tell you that trading is easy have an agenda, like selling you expensive material and indicators. How much do you know at this point? Have you read a lot of books already? If not, I`d recommend you to read 10-20 books for starters. Wait with sim trading for a while. It`s no use to sim trade if you don`t know what you`re doing or what you`re looking at. I`ve probably read close to 100 books on trading and most of them are not worth the paper they are written on. There are however a few good ones. I may compile a list for you later. After you`ve read those books, taken notes and done your best to understand the concepts, I would start to bridge the gap between theory and real trading by studying charts. Print out EOD intraday charts and start to analyze them using what you`ve learned from the books. Identify support and resistance, observe turning points, swing highs and lows, trends, trading ranges, signs that a trend is reversing, etc. Identify the best trades for every day you look at. After doing this for a while, you should start to get a feel for how you want to trade and what you want to trade. Start writing a trading plan covering your methodology, philosophy, money management and trading rules. A business plan. Then, start sim trading this plan in real time. Re-write the trading plan as needed. Sim trade it. Rinse and repeat. When you feel that you start to understand what`s going on and you are consistently profitable trading as you would with real money, then you can go LIVE with real money using only one contract or small number of shares. At this point, the goal should NOT be to make money although that`s what you want right away. You will experience drawdown. The drawdown is much smaller if you trade small size. When you are profitable with a minimum bet size, you can start to increase size slowly. If this sounds like an incredible amount of work, it is because it is My advice would be that you allow the process to take as much time as it takes. The sky is the limit, but it`s only the few that make it through the process. Anyways, this is what I would have done if I were to start over again. What I done was largely similar to this, but I spent a lot of time walking in circles and reading useless books. And for what it`s worth, I`m still not trading for a living, but still in the process of getting there. Good luck!
Thank you all for your input. I appreciate all of your thoughts and ideas! I have to say that reading some other posts on this board can be very discouraging. Not everyone that trades is doomed to fail. If I follow what most people on this board say, I can expect to lose all of my money within a year or so? If everyone has had such bad experiences, why are you still on here? Why even bother trading? I am a bit confused.
The downside of trading is that the failure rate is very high. There is no certain path to success such there is for most occupations. There's no standard course of study. Some people will never make it regardless of how long they try. The upside of trading is pretty obvious. It's the greatest lifestyle you can have. Being a trader is not something one chooses. Either you are one or you're not.
60K or 600K....loosing can be made as easy and fast as YOU want to make it. for some it wont take a year. you have already recieved good advice - join a prop firm. Always remember that the market is Independent of your or anyone else's actions or thoughts. Its your own psychology that needs to be prep'd for this Career. Markets ususally go in one direction for extended periods of time. You must ask your self - then why do most people loose money ? Its not that hard to SEE the trend. (the current bull run has lasted over two years - if you entered long at ANY point during this time - you would have been profitable - ON PAPER). Daytrading is the toughest form of trading. Sole reason for this is that it requires faster decisions (Entry, size and exits). Also, your mind will go through alot of emotions in a short period of time. I personally have believed that there is no difference in Day/swing or position trading. All require the same methedology. they just vary in the amount of experience required to scuceed. SHorter the time frame more experience is required. I won't go into the details but here is the thread you can read later http://www.elitetrader.com/vb/showthread.php?s=&threadid=213954 Read about Price Action, Market composition, Micro and Macro economics. Read "reminiscence of a stock operator" a book thats a must read. You will keep asking yourself "have I made it" for a while. Its when this question will stop popping in your mind - you will have made it. My advice is 1. Do not trade SIM for too long. 2. Start with Position trading and gradually make your way to Swing and Day. 3. Start trading real money as soon as you know the basics. Get an a/c with IB. (I know it requires 10K to open the a/c but you can take out the amount you do not want to loose after the a/c is live.) 4.Day trading (or which time frame ?) should be last of your wories, do not attemp it until you are good at swing trading. 5. Sizing in and out is a key factor to success which most cannot understand. It has to do with simple maths. 6. Trend is your friend. 7. Pick your nose but not TOPS or BOTTOMS. Most money and the easiest money is made in the middle after the trend is set. Gud Luck