great advice. also, if you are trading gaps at the open, you can be outta many trades pretty early or trail a stop at say .20 or so. its not perfect, but you can make the $50k/year job. whatever you do, i'd get a marketable skill to fall back on. probabilities favor failure as a trader.
Man you don't trade more than 100 shares until you're profitable, and you're assuming you'll be profitable from the get go.... "fading gaps" as a primary strategy will fail. I'm not saying this to be a dick or discourage you, but to save you money. In certain situations when a stock gaps up or down it can be good to fade, for me I find that from tape-reading, but... If you take your 50k, start fading gaps with 1000 shares, you'll be crying with an account balance of 17000 going "ahh where's my $33,000!" I'm not in the slightest bit trying to discourage you from pursuing trading as a profession; however, what you are doing is saying you're going to fly a 747 and press the auto-pilot button and you'll be okay... after playing MS flight simulator for a short period of time.
I never once said I would be fading gap ups or buying gap downs at the open. I'd blow that account out in no time. i said I would be trading them (as well as trading large price % movers with a 10:00am est scan)........ie, waiting for the right entry point. I highly doubt I'd ever buy or sell before 10:00 through a gapper. As a matter of fact, with the strategy Im developing, I highly doubt I'll ever trade before 10:00, as I need that 30 mins of time for my entries to develop.
"fading gaps" as a primary strategy will fail. I'm curious why you think this is true since it is one of the few trading strategies with a proven track record.
On behalf of the profitable traders Worldwide, I want to thank you in advance for your capital infusion. Your hard earned money will provide much profit opportunities for all concerned. Best Regards and Sincerest thanks with deep gratitude from the bottom of our hearts. (p.s. our wives, girl friends, and children want to express their appreciation as well.)
Hi. If I could just add my thoughts here. I'm in a similar position, I'm 23 years old, live at home, still at uni, and have just started with $46k trading equities using a mechanical system on the ASX. (I actually have traded in a discretionary manner for about 2 years with mixed success, hey, its a bullmarket). I will start full time work soon, so my system is a weekly system which is trend following in its nature. The difference is between my approach and yours I suspect is that my system has been backtested over different market conditions and has been proven to have a positive expectancy. Backtesting will provide you with a blueprint of what to expect during live trading: *What is maximum DD? *How is my system likely to perform in a bear or sideways market? *Position sizing strategies can be easily evaluated? *Largest string of losses. *Etc, etc With no blueprint obtained from backtesting, you have no idea how your system will perform in realtime and if it will even be profitable. The problem IMO with discretionary trading, unless you are very systematic and disciplined with your approach, is that your trades are controlled by fear and emotion, which are often irrational. Im too scared to deviate from the plan that was backtested because then im pretty much trading blind! At the same time no point to stick to a plan if you dont know if it is even profitable. Is backtesting perfect? No. Is the future the same as the past? No. But for young people like us with a limited track record and no idea if our system is likely to be profitable, its the best tool we have. I have maintained a blog regarding my systems development and my live trading and it may be of interest to you. http://thetrendfollower.blogspot.com/ Any comments or questions feel free to fire away. PS. Good to see your ambitious and want to make it for the bigtime. All the best in your journey. And DONT GIVE UP. Nizar.
I am in no way advocating that someone should quit their salaried job to try and make it as a day trader, since 90 to 95% of day traders fail. When I first read the thread it seemed that wiesman02 had made up his mind and was determined to follow his dream to try and become a trader. My suggestion was that instead of risking his entire $50k, that he could put up $10k at a prop firm and if things did not work out he would still have most of his cash. It sounds like he is working a "personal banker" type sales job, and those are a dime a dozen, so he could get another in a year or so if things did not workout with prop trading. He seems to have backed away from that and decided to take a more cautious approach, which is probably the best idea. To answer your questions teck... I have traded thru two prop firms, in an office at Worldco and remotely thru Assent. Worldco is long gone and Assent is still alive and well. I have friends trading thru Generic (owned by RBC) and Echo. As of now I am not trading at any prop firms and work a salaried job at an online brokerage firm, which allows me to watch the market all day and do some trading. I personally like Assent, especially since they and Hold Brothers are registered with the FINRA and require series 7 and 55 licenses. Assent will "tie up" your initial deposit for a year, which angers a lot of people, but for someone like wiesman02, if things did not workout he would emerge from the experience with his series 6 license status "improved" to series 7 and 55 and have more opportunities opened to him within the securities industry. In regards to the PHLX licensed firms, and the firms that require no license... from what I hear they are reliable and you should be able to negotiate a good deal. I do not have any personal experience with those firms, so I cannot make any recommendations. A lot of them have been reviewed on Elite trader previously. Call them and see if you can sample their software and be sure and get everything they promise in writing. Just remember that the toughest part of prop trading is developing a good profitable strategy and not finding a reliable firm. You have to be net positive before you can even worry about rather they pay monthly or bi-weekly. And its safe to assume that none of them have software so good that it alone can transform a trader who loses money into one who makes money.
it's really not the software that makes you a winner. it's the software that makes you confident in what your doing along with ton's of hard work for years, getting "grounded"! there is no substitute for experience and even then if you only learn one way that may not be the best way. everyone wants security yet in trading you have to embrace the insecurity and become comfortable with it. basically i am saying the longer you can hold out and stall risking your wad and the smaller more conservatively you can trade the better off you are as long as you are diligently still searching for "the method". if you ain't looking "always" your doomed a looser, even if you seem to currently be a winner.
Just finished Millionaire Traders- i bought it basically just for the interview with Steven Ickow and the point came up that ultimately every methodology fails.....its the traders who constantly adapt that can make it .Not easily done .
Is moving out west an option? If you live in the Pacific time zone you have 2 hrs to trade before work which should work well if you are trading gaps.