My account has consisted of some cash (had over 40K in cash last week, but now it's down to around 13K), plus a significant amount tied up in stocks. I've been daytrading, and shorting stocks for the most part. I prefer to go short instead of long, because if I have 13K of cash in my account, then I can only buy 13K worth of stock (or maybe a little more if I wanted to use margin). But since I have a large amount of money tied up in those stocks, then I can easily short 100K worth of stock per trade. I look to gain around 1% per trade, so if I short 10000 shares of a stock at 10, then I'm happy if I can cover it at 9.90 for a 1K profit.
That was an example of my lack of discipline. Around 10:15 I saw WM plunging nonstop, and so I shorted it around 16.40 thinking it would keep dropping. Sure enough, I was within a few cents of the bottom, and it reversed hard. I would have liked to have covered around 16.50, but it was so fast that I ended up covering around 16.70. I don't know. I've seen posts from people who have said that it takes over a year before you can become successful at intraday trading. I've only been at this for about 10 weeks. Since most of my trades are shorts, I wonder if I was just helped by the downward trend of the market the first 3 weeks of the year. Then when the market turned around last week, I lost big time. Hmm, I think when I made the 8 out of 9 winners, I was willing to take a tiny profit instead of trying to hold out for a larger gain. This past week I can remember a few times when I could have taken small profits but instead waited for larger gains (which never came) because I was trying to make up for previous losses. Yeah, I broke all the rules. But even if I can maintain my discipline (which I find to be difficult at times) and follow all my rules, I'm still not sure if I can be a successful daytrader. Right now I'm just trying to short when stocks hit resistance levels and start to drop off. Some people here make it sound like you need a complicated system, and there are a lot of things that I am unfamiliar with (like the various chart reading techniques, for example). What kinds of things do you look at before placing a trade? Thanks. And I don't take your post as flaming, I'm a novice trader and welcome any tips anyone can give me. I thought that I would need to withdraw some or all of the cash in my account to pay my taxes, but I just did my taxes this weekend and I'll be paying less than I expected, so I can place a few more trades next week. Just in time for the Fed. :eek:
I give you a serious advice now. Take out 3k from the 13 left in your account, change it to cash and put it on the desk beside your keyboard when you trade just to feel a bit real what you are doing there. I am sure that you dont know how likely you will blow out everything within a very short time when you continue playing such a leverage without any plan (target,stop and size). Your 8 winners out of 9 dont say anything, not to you and not to anyone else since you didnt say how it was before and as you are new to trading you are acting on pure emmotion. The money is gone thats what you have to accept and then forget quickly in order to set up a suitable approach how to trade YOUR MONEY.
I hear you, the only way to find out is by putting your money on the line. I will say this, however. If you are taking a 2.5 K loss on a position that goes from 16.40 to 16.70, it means that you are trading way way too big for a beginning trader. I mean way too big. What would that be, 8000+ shares? You need to seriously consider cutting back to very small positions and proving that you can be profitable over xx months before ramping up. In my opinion, this is the #1 problem that a lot of people here have. They can't trade without the rush of the large position, and this means that they're feeding a gambler/compulsive side of their personality. Not saying I'm sure that this is what's happening with you, but if you continue to trade such huge positions without establishing yourself and your technique, they are going to carry you out and it will probably happen sooner rather than later. Please consider cutting back and trading small for xx months and showing consistent profits with smaller drawdowns before increasing your size. Re: guys around here talking about complicated systems, it seems to me that a lot of other guys talk about how complicating things by i.e. using indicators is the refuge of the confused or the unskilled. A lot of the successful guys I've seen on here are trading price only, and characterize their techniques as fairly simple. Having watched the markets intraday every tick for only the past 3 months, I am as sure as I have been of anything in my life that success in trading is all about what's between your ears. Sure, there are some people who will get involved with no clue about how to identify a decent entry, and they'll blow out soon. But there will be many more, IMO, who will blow out for strictly psychological reasons. Don't be one of them. If you don't radically cut back on your position size until you've shown xx months of consistent low drawdown profitability with few massive swings (which will show that your system is sound) then you're just like every other newb who comes, pays, gets his ass kicked and limps home. I'm sure as hell not going to be one of those guys. I'm down about $1K, (max drawdown about $2K) after 700 trades and I feel like I'm doing really really well. There will be some guys who will flame me for that but I couldn't give a shit. I am trading very very small. Thank God for AAPL.
I just saw this. I'm sorry to tell you this, but this is insane if you're a beginner. You should be trading 100 shares of high volume stocks. There are literally hundreds of posts by experienced traders here which will tell you exactly the same thing. Please don't take my word for it, search them out. You can't put your all your equity at risk on every trade. It will be likely be toughest (non-personal) test you have ever faced in your life to cut back to 100 share lots now that you have tasted 25K of wins in one week. You must do it, however, or you're almost certainly going to blow out the entire amount.
Ive been trading intraday for abou 6 weeks - so you and I are in the same boat as far as the time spent. Out of curiosity -did you have a particular setup on the WM trade? Or did you short it simply because it was in a downdraft?
mgabriel01: Or did you short it simply because it was in a downdraft? Yeah. This thread should be retitled "Journal of everything you should NOT do." Account went to -7K today (yeah, 7K in debt). But I shorted AMZN before the close and should be around +3K tomorrow if AH price holds. I might not cover immediately though.