If you actually think you're ready to try your hand at (retail) daytrading... Open a futures account and take on the e-minis, be they the Dow e-mini or the S&P500 e-mini. There have been numerous threads on the various advantages/disadvantages of futures vs equities. In my opinion, it doesn't make a difference whether you call them futures or stocks, so long as you can make money on it (and the tax advantage of the e-mini over stocks helps). Nowadays, I trade almost exclusively the S&P e-mini and stalk a few stocks that I've come to know quite well. Anyways, with $5000 you could give it a leveraged go. I would say that there are three stages to a daytrader. The Threshhold of Surviveability, most traders fail at this point. And statistically speaking, so will you. Be forewarned, 95% of traders flunk out. So your NUMBER ONE GOAL is to be that other 5%. In other words, at the end of the day, DON'T LOSE MONEY. That's right, your goal isn't to MAKE MONEY. It's to SURVIVE. It's a zero-sum game, every point you pull out of the market, you took out of some poor chap's hide. Simply NOT LOSING MONEY puts you at the head of class. Then there's the Threshhold of Consistency, developing a workable system where you can go into the market and pull out a point. That's right, not 10 or 20 points, but one point. Plan the Trade, Trade the Plan. And CONSISTENTLY do this for days on end without any significant drawdown. THEN comes the Threshhold of Profitability. Odds are, you will not get there.
Nelson, What JT 47319 is saying is true. Perhaps the 5% number is generous nowadays. Now, don't take this as being negative.......deal with it........digest it....... There are many new traders entering the market it seems. Many are optomistic about the "future of the market" and do not want to miss making money. This is not a published fact...... merely a personal observation. I do not know if other traders have noticed this? Anyway's, I know traders that even lost money during this exodus in and out of the markets in the past. Even though "Pigs could Fly" a few years ago during the "bubble days", for every winner was a loser in the futures market. Now the stock market is not a zero sum game like the futures market. There a MM's and specialists in the middle taking their cut with stocks. I have been reading some crazy things these "middle men" are doing on these boards and am glad I trade futures. Michael B.
Nelson, Just my .02, you should avoid feelings of "missing the boat" both in a macro and a micro sense. The market will always be there, and if you have the goods, it won't matter what the market is doing. Rushing the process is more likely to result in lost capital than hitting the ground running. Good luck Sean
I'd rethink the above statement. What about a pro athlete who trashes his knee and the pro career is over. Lots of those guys don't have much to fall back on. And as prepared and confident as you might be you should know that the majority who pursue trading as their livelihood do fail.
The above implies you want to focus on trading long if I understand you correctly. Waiting for a bear market to get in on the bounce or riding the current bull market (which I actually don't see as a bull market). If you're going to trade for a living I think you have to be able to trade short also. To restrict yourself to only trading one way would be a handicap in my opinion.
Guys thank you all so much... I have gained a lot of ideas/thoughts/wisdom from this thread alone, and I really need time to think about it all to see where I will be heading. I was thinking about finishing my Economics degree in just one more semester, but I decided to spread it over 3 more semesters. I am just going to take 2 classes each semester and work. I should really take advantage of free apt./food/gas etc that my parents provide for me. I am going to work for UPS at night (I saw an opening, and hopefully I will get it), and also work at our computer lab (if I do get the job as I hope) and I am going pour them all into stocks and hopefully in two or three years I am going to have around 100K if the bull market really sticks as I think it is going to be. All the while, I will have enough time to read and understand all the Day Trading books etc and I will be studying the data feed and charts etc. Anyways.. there it is... Nelson
start slow so you won't end up like this http://www.elitetrader.com/vb/showthread.php?s=&threadid=9682&perpage=6&pagenumber=1 edit: you could turn into a fruited loop or so I heard
What TA suggests that this is a bull market? Not necessarily saying it is or it isn't. Think of this is an introductory homework assignment: what chart patterns, price action, volume, economic indicators, confirmations, sentiment, candlesticks, ratios, insider selling/buying, etc. suggests that this is a cyclical/secular bull market rather than simply an extended form of seasonality?