I've seen it posted all over- but i must be redundant. I am a begining trader, plan to put $30k to start in a tradestation account. I have a series 63, 7, soon to be 65 license so im not that new. Ive read most of the important books and totally feel good enough to not lose a ton of money. I have a good conservative strategy, mostly aimed at preservation. My question is: is it realistic for someone starting off to see about a $200 a day avg profit on $30k? I plan to trade approx 3 stocks a day at the same time to avg p/l. Must every beginer strike out? TIA!
$200 * 20 = $4000 per month 4000 / 30000 = .1333 = 13% per month I do not believe that goal is possible for a new trader with 30k.
I don't want to sound negative but if you are just starting out, reglardless of what license you have, it should take atleast 2 yrs. to be consistently profitable. It's the type of business where I honestly don't think you can be a great trader without being a horrendus trader at the beginning. I had a terrible start but stuck with it and am now doing very well, on the other hand I have friends who started in '98 and made huge and I mean huge amounts of money, and then the markets changed and weren't so generous, yet the traders refused to admit anything had changed and all the money they made, plus some, no longer belongs to them. Just my experience
It's certainly realistic from your capital's point of view, you have 30K account - that's 120K buying power - 2000 shares of $60 stock. If it moves 10 cents in your favor - you made your daily numbers. But unfortunately it's very unrealistic for a new trader with no trading experience. Even if you had a million you're likely going to be losing money for quite some time before you start making money.
any tips on shortening the learning curve? im trying to learn from others mistakes before making my own
Remember when Yoda was sending Luke into that cave to confront his fears? Luke said "I'm not afraid." And Yoda said "You will be. You WILL be!" Same deal here. You will lose your money until you realize the stuff in books is BS. Then you have to start all over and find your own edge. By the time that process is over, you may have gone through that $30K once or twice.
You say "$200 a day avg". This will take some time. It will most likely cost you around $10k to get there depending on your style, discipline, risk management plan, psychology and the markets. $200 average means you will have a quite a few $500+ days which are offset by the inevitable -$200 or -$300 days. Just imagine what would happen if you made $500 on a good day and then came in and lost $300 the next day. Your average would be $100 for both days. A negative day has a very strong downwards effect on the average of a few good up days. A closely mentored trader scalping futures (I can only speak from this perspective right now) will require at least 4-5 months of intense attention and excellent risk management to hit this goal. With all of that and everyone else's opinion being said, you should just focus on being positive and be brutal about guarding your risk. Your ability to manage risk will determine your success, because it will help you stick around long enough to get over your hang-ups. Good luck and best wishes for complete fulfillment of your desires.
I dont plan on trading every day, ive paper traded just trying to get a feel for trends and have a good edge imho. i plan to test the waters for a few weeks with 100-500 share trades at a time. My goal is to not lose money :/
You can't really take any shortcuts towards learning how to trade. The only thing you can do is manage your risk well enough to be around when you figure it out (as I stated in my previous message). Everyone's journey into trading is unique. Trading involves infinite paths to failure as well as success. This is a lot like asking someone how best to eat a Reese's peanut butter cup (remember the commercials?) or asking a group of wealthy men how best to become wealthy. You will get 15 answers for every 5 people you ask and none of them might fit your style, tolerance, knowledge, skill-set and psychological makeup. The best thing you can do is be really sharp about preventing professionals in your market from taking your money. It will cost you money to figure out how you react to losses, how you will stop yourself from trying to fight back (a bad idea... you are only fighting yourself) and when to close up shop if things don't go well. Word to the wise: Don't trade for the money; rather trade to execute well and be in control. If your focus shifts to the monetary value of the trade, you will be lost. It is a lot like showing up at Patpong in Bangkok with a bag full of $30k in singles. You will have to focus on the pick-pockets and adult show managers from reaching in there: http://www.hotelthailand.com/ezine/2004/issue6/zine1.html I thought I would throw that in.
Unless you have actually put your real money on the line, its impossible to know if your edge(s) will actually be profitable. Its just the nature of the beast. Strange things happen when you step out of paper trading and into real trading. Not only will your emotions come in to play but your execution, the getting in and out of trades at your desired prices, becomes much more complicated. With 100 shares, its really no big deal but once you start stepping up some size, even 500 shares, liquidity can become an issue depending on what you trade. Plus, if the trades starts going against you, its much easier to get out on paper because you wont realize a loss, but when you are already down $300 on a trade, it may be hard for you to accept that loss. Things like that will become more real. As far as quickening the learning curve, that too, is impossible. You and only you can make mistakes and learn from your mistakes. Experienced traders can give you advice and help you along the way, but really it comes down to you experiencing the market day in and day out for quite some time before you can figure out how to play along with the pros. Every single second in the market is unique and anything can happen at any given moment and it takes your brain seeing these moments time after time after time before it will know how to react. This may sound like blah blah blah to you right now, as I know many others traders that I have tried to teach in my office have seemed to brush off words of advice, but I am just giving you info that I believe can give you a more realistic view of what you should expect in the next year or so. Anyways, good luck to you and hopefully things will work out.