I am an equities prop trader, I work in an office. So you just started. Here is what you need to know. 1. Lose your ego. You are a noob. You have NO idea what you are doing yet. Accept this fact, save yourself the time. You are not a prodigy, you are not going to make a tankload of money your first month (unless you get lucky and they halt your stock due to a buyout. if it was not halted you would probably get out too early) 2. Understand that you WILL make mistakes. It is important you learn from these mistakes. When the market is closed, you should be reviewing your trades, understanding what you did wrong, and what you did well. Again, you are a scrub, it is not YOUR fault. Mistakes will come, and you can't be too hard on yourself. Tomorrow is another day, and tomorrow you will have the lessons you learned from today. 3. Find edge. Every trade you take needs to have a high probability reason for working. You need to understand why it should work, you need to understand what factors impact the trade's success. Before you enter, you must already have an idea of how you will react if these factors change. Listen to me, you do not take trades just because of a setup or some stupid indicator. You need multiple reasons. Charts, level 2, money flow, correlations, etc etc etc etc. If a stock is not in play, odds are your juicy setup is just a bunch of program noise. Your stock NEEDS to have volume, it needs to have REAL buying and selling, not random market drift. 4. Your reward target MUST be realistic. Your hard max loss stop MUST be realistic. You need to try as hard as possible to reach your targets. You need to hold past that first wave in your favor, no matter how eager you are to take profits. You will not succeed scalping the first wave. Don't waste your first several months scalping the first wave, it is a bad habit. Trust me, I know how good it can feel to scalp a quick 30 cent move with 300 shares on your 2nd week. 90 dollars in 30 minutes!!! You will beat yourself up time and time again as that trade retraces 20 cents, and then goes a point. You need to get a proper reward out of your trades or commissions will eat you alive. You will have many small losers, many small winners, and then you'll have your big winners. Your big winners make you profitable. It takes time to learn what to expect from trades, you will mess up a lot. 5. Do not be lazy. Go out there and find the best opportunities. Have a plan before the bell rings. You need to find your own ideas, you NEED to understand why you are taking trades. If you are leeching off others, you are lazy and you will fail. This game is a meritocracy. If you are lazy you will lose. 6. NO BIG LOSSES. Honor your max loss hard stop. Your goal for your first 1-3 months is to STAY IN THE GAME. Get that screen time. If you are dead even after 3 months, good job, now you have screen time and you haven't damaged your account. Your cost of learning is small, that is a WIN. 7. Be confident in your ideas. You will learn very quickly if your ideas are garbage or legit. You need to trust yourself. If you lose a few trades in a row, your natural reaction is to get light on your next trade. "Oh god I'm down $120 today omg." So you get 100 shares. Your next trade goes a point, and you only get 20 cents out of it because of your piker 100 shares. If you believe in yourself, you can't lose that aggression. That one trade could have made your day. You had 3 losers today? Big deal, you might have 5 winners tomorrow. Take it trade by trade. Don't let your P&L effect your position sizing. Instead, let the market and tape decide your position sizing. 8. Position sizing. You NEED to get bigger on those trades that have you foaming at the mouth with excitement. These trades have a good chance at reaching a GREAT reward target. They have a high probability of working. They have TIME to work. Get less size for the mediocre crap. So for you, 500-700 shares of your A+ trades. 200-300 for everything else. If you are only confident getting 100 shares, don't even bother. You need AT LEAST 200 while starting out. Here's why: You need to train yourself to HOLD ON TO POSITIONS. Go ahead, scalp half when those noob emotions kick in, and let the rest run, and you will discover that letting trades run is GOOD thing. If you have only 100, you have absolutely no flexibility in trade management. Don't get in the habit. 9. Be selective! Don't get caught in the market's emotional swells. Take good trades, and don't worry about what you miss. 10. Don't chase! If you miss a move, don't worry. Wait for the pull-in. There is almost ALWAYS a pull-in. Often, it will pull right back to your entry. Sometimes, it is better to wait and let the trade pass. Often, it will present a more attractive entry setup. 11. Sometimes the best trade is to not trade. Again, don't get caught in the market's emotion. If the market just spiked up, remain calm, and find something that still can work, or wait for the pullback. Be patient! Good trades present themselves all day if you are patient and working to find them. The best part about trading equities is that there are SO MANY WAYS TO MAKE MONEY. There are tons of stocks in all sorts of industries at all sorts of price points. 12. Have Fun!
When I was sim trading as soon as the bid or offer ( whether buying or selling) was achieved, the order would complete. When trading live, there was often a delay because others were competing for the same price. As I understand it, the order completes according to first come first serve. In the meantime, the price can change. Therefore, the order may not complete if you are trading live.
ksmetana: Good advice. >Are you or are you not trading real money? >If you are not trading real money, than you are not the expert you >think you are. What type of expert did I claim to be? You need to start to learn to pay attention to the details. Did I claim to to be the best trader in the world? Yes I am trading and am not trading with real money. What seems nonsensical to some is rational, clear, and self-evident to others. To stop the guessing, yes almost my entire record is hypothetical. However, I have recently started trading a very tiny account. I Just hit the trades in my real account that I place in my sim account -- whenever possible. I do not trade the same instruments though and can't always keep my accounts matched up. Really simple. Yes, I started a thread in P&L where I was going to record all my real money wins/losses but it was removed by a moderate. I don't need that and will not be bothering with reposting it here. Also, as already stated your sim is no good. Sim is never 100% but there are many solutions to the problem you experience, the easiest is to program the limit order to only fill when a given amount of volume is traded at a level or when price trades through a level. >The main difference between sim and live trading, is the psychology. >You react differently when real money is on the line. Roark, good observation. However, it would be more instrumental to take this beyond the observational stage to determine what those differences may be and how one can reduce or even eliminate them. I have did this to a large degree. The main difference between when I have real money versus hypothetical is that I see a lot more detail. I'm much more attuned. This can be a benefit or a hazard. I would describe it just as more intense. Even so, with strong training and a strong knowledge of one's methods and edge there is no reason to believe that one will react differently. Yes, they may feel differently but reaction can be trained -- which I have did myself.
Thanks ksmetena. How do you guys plan on trading this Middle East situation tomorrow? Gold and Oil are way up. Today is a holiday in Canada and the USA. I anticipate a start of the trading day jump in the TSX followed by it falling, perhaps below 'zero', towards the end of the trading day. My colleagues like to play the opening of the markets/closing of the markets strategy. I was wondering if the oil/gold situation might be something I can capitalize on.
I'm familiar with the market opening strategy of closing the gap if there is a gap at market open. What is the closing markets strategy?
On closing, stocks that have had a nice run up or down during the day, will often settle down/up a little at the end of the day. You can profit if you short/long 15 or 20 minutes before close.
Sounds logical. I suppose traders that were riding those stocks want to flatten out towards the end of the day and so counter trends tend to develop near the close.
Jeepers, Now I am being attacked in another thread. Am I wrong to believe that I might know a little something about the world economy at the macro level, while being a complete 'noob' in trading?
Roark, this wasn't a money making issue. I was just trying to explain how panic can cause a rush back to the US dollar. The current panic in the ME isn't big enough. It is only large enough to prop up the price of oil and gold which is CAD bullish. However, if real hell breaks lose in the ME, there will be a major rush back to the US dollar and CAD will collapse much as it did during the banking crisis.