Hey group, Would like to get a comment on what styles of equity trading you all would recommend for a newbie like myself to start on. I have been looking at various prop firms and seem to see some trading styles according to different groups. So what would you suggest all things being equal in terms of a deal and the amount of training received (if any- hee hee). I have seen or heard of the following, but feel free to comment on your own approachs please: 1. Scalping (NYSE only) 2. Scalping (NASDAQ only) 3. Scalping (Both) 4. Multiple Time Frame Trend Trading with TA (5,15,30,60 min and MAs) 5. Rebates 6. Pairs Trading (seems advanced and not done by prop) 7. Counter Trend (Tops and Bottoms) Also please feel free to comment on overnight positions (good or bad). Most props don't allow this anyway from what I can tell. And on any other trading strategies that may be better to learn on or to use or just because you want to discuss its merits. Thanks in Advance to all those that reply. It is appreciated. Oh and feel free to flame away! -peerless P.S. Hopefully I'll find a prop shop that fits!
Hi, peerless First of all: do not trade using real money: paper trade first. Think about trading Futures-E-minies. A lot of advantages: big volume (easy to go in and out), better leverage, high liquidity, direct access( almost no slippage), less taxes, easy reporting and much more...NO INSIDE TRADING. The market is huge. Study CBOT-Mini Dow Futures ( symbol YM ). Go to www.cbot.com, click EDUCATION, click WEBINARS( a lot of free online seminars ), select a seminar, click VIEW RECORDING. You can see a seminar as many times you want. All the best.
The bottom line is you have to find something that meshes with your personality. There are an unlimited number of ways to take money out of the financial markets, but only certain types of traders will be successful with certain strategies. I would suggest you get exposure and some training on several different styles and you'll eventually settle on something that suits you. For example, I'm a really risk averse guy who likes numbers and problem solving and has a lot of patience. I've traded dozens of different strategies but have settled into a long term, low risk arbitrage strategy as my bread and butter. Yeah, I can scalp for pennies, trade news and bang away on a merger arb spread, but what I really love is mulling over a huge spreadsheet of data, trying to make that lightbulb in my head go off. You see what I'm saying? BTW, most prop shops won't have an issue with you holding overnight positions. The size of the trades you can carry will usually be in relation to how much capital you have.
I suggest, at least in the current market, the easiest and most profitable would be number 7. And finding a shop is very easy now.
If you want to work for a prop shop....don't you already have a track record? Haven't you already found your style? I am assuming you want to be a prop trader....you want rebates and training, is usually what attracts new traders in...... But, I thought that one had to wait to hone his/her skills before being trusted to trade a prop shops money.... Apparantly, there are prop shop firms out there that take anybody with the 5k and an elementary school education... There is a whole new sub-culture.......and now I see the regulators point.....Prop shops are dead. Michael B.
One of the most fundamental and necessary skills for a trader, regardless of what style he trades, is the ability to identify strong trends. So answer your question quickly i'd say a good starting style is find strong trends and take a bite. Some more explanation: if you are going to trade reversals, hunting tops and bottoms, you've first got to learn to recognize when a trend is dying out, making that last gasp for air. And you can't do that until you learn to recognize a strong trend in the first place. Additionally, no matter what style you end up trading, you don't want to jump in front of a speeding train. If you've spent some time looking for speeding trains and hopping on for a short ride, you're at the same time learning not to get run over.
Geez, that was harsh. How did you get started and/or get your training? I am looking at either going the prop shop route or going remote retail and (while I apparently have an elementary school education and 5k) I would like to try not to be a total retard/sucker with regards to my trading. I like the idea of being able to learn (at least a little) from some profitable traders and I figure a prop shop is my best bet at this point. I could be wrong and I do appreciate your flame nonetheless. Unfortunately, i haven't had the opportunity to trade full time until this point and I feel anything I learned while it was a "hobby" is totally useless at the next level and the equivalent of playing golf without taking any lessons first- you can do it but it aint going to look pretty and you are probably going to keep on making the same mistakes over and over until someone teaches you the right way. If you have better strategy for newbies please feel free to articulate it. -peerless