Starting to trade

Discussion in 'Professional Trading' started by Mdockham, Apr 8, 2009.

  1. Mdockham


    So i have been following the market for about five months and I have come to the idea that I want to start trading a bit. Not a lot, just to maybe help pay my way through community college or something. For these past five months I have been using "WallStreet Survivor" to play the market, and I have done pretty well, made about 10k last month. So my question is, what do I need to trade? I know that Scottrade and other site charge $7 a trade, so is there some way I can cut that cost? What programs would I need? I'm just looking to fly from the nest but I cant seem to find my wings. Any ideas?
  2. A couple of things to keep in mind.

    1) The market has been on a tear lately which may have helped you turn a paper profit. You really should back test your approach over a sustained period including periods when the market declined. Are you still in the black?

    2) Don't underestimate the impact on your trading when you're using real money. Fear and greed make it hard to follow your trading rules.

    3) If you're swing trading (i.e. holding for several days), commissions aren't going to be significant for you. Many people on ET use Interactive Brokers (commissions as low as $1 on stock trades) but it's no place for a novice.
  3. Understand the big picture.

    The worst thing you can do is to jump right into the market thinking that you can bank off of every 1 minute spike.

    Ideally I would throw you on an island with zero money and an internet connection that only lets you see daily 9 month charts for at least 6 months.

    I would then tell you that the only way you get food is if you look at at least 500-1,000 charts a day.

    I would then tell you that the only way you get food is if you correctly categorize the entire S&P 500 based on chart characteristics.

    After about 9 months you would have a fair amount of knowledge when it comes to swing trading but you still wouldn't know how to make money intra-day.

    Intraday would most likely take another 3-6 months of experimentation among intraday charts and that would only prove successful if you are instinctively cautious which is of course very unlikely for any aspiring day trader.
  4. Mdockham


    How about this, ill start with technical analysis from a to z. Investing for dummies. Lessons from the legends of wall street. The first time investor. And the random walk guide to investing.
  5. Highly recommend that you DO NOT start with the technicals. You must first realize the factors that are really moving the market, which are generally fundamentals.

    That being said the mkt frequently doesn't follow actual "fundamentals" and defies logic. As of late the mkt is starved of any good news, rumors, etc. to push the mkt up. So you need to find whatever is moving the mkt and not just look for chart pattern set-ups. IMO, those are more important for actual execution of a trade.

    If I were you I would make a calender of important economic events. Here is a good link.

    A lot of the releases don't have much impact, but others related to GDP, Crude Inventories, Consumer Confidence, Interest Rates are very significant. Do your own search to find the relevant stuff. Also explore the WSJ site..Market Data section and look over the cashflow, strong sectors, etc.

    Secondly, I recommend you make a list of notable earnings of companies such as GS, XOM, MSFT... They will open up or down signficantly but the mkt will generally follow their lead throughout the day.

    Some other things I would follow is the price of oil (been correlated to the mkt since end of 2008). Learn about VIX, volatility.

    Knowing all this stuff won't necessarily make you profitable, but at least you will be more than a gambler. I'm not hating on the technical analysis chartists, but I've never met anyway that has been consistently profitable using the charts alone. In their defense, charts frequently show the picture of the fundamentals or whatnot, but for the beginner you need to primarily understand those fundamentals.

    Also, I wouldn't read a whole book on the random walk concept, but just Wikipedia it instead. You're not a economist and you should prioritize learning about actual trading than studying mkt efficiencies and whether ppl can exploit inefficiencies or whatever.

    PM me if you want me to recommend some books. I have many in .PDF files so I can e-mail them too.
  6. That is probably the worst thing you can do seeing that most of those books will focus only on intraday charts or only on fundamental news trading. Also they will focus on 574 different methods which will confuse you and leave you with no insight of your own.

    Do this and I recommend don't do anything else. Search online for the term swing trading. Spend about an hour or two reading basic explanations of it for one day. Try and forget the specific methods of it and instead understand the basic simple premise of it.

    After that never (NEVER!) depend on anything or anyone else. Only depend on yourself because that is the only way you gain an insight.

    Start scanning and studying literally hundreds of charts each day. Only study daily charts with a history of 9 months. Don't do anything but that and sooner or later you will gain an insight of your own.
  7. If your strategy is day trading, I have a post about day trading rules you might want to take a look at.

    Day Trading - The Art of Speculation
  8. lpchad


    Not bad, but let's take this for what it is, SPAM. Blog has a bunch of posts (some with useful info) with links for PPC advertising.
  9. Wow this faggot is trying to sell 20 minutes worth of "voice" advice for $100!

    Apparently he once manged $150,000,000 in assets and also ran a hedge fund. I bet if he was anything remotely successful, this scum would've had enough money that he wouldn't have to waste his time on some shitty website marketing his "expertise". .
  10. Mdockham


    where is a good place to find daily 9 month charts?
    #10     Apr 13, 2009