mmm, seems like you didnt start with enough risk capital to give trading a viable try... I suggest you go get a job and put together $20k of capital you are willing to lose... in the meanwhile, study the markets every day and learn, learn, learn...
If you had a loss level, stick to it. It's part of trading discipline. Shut down til the next tax year and spend the time studying the markets. They'll still be here when you're ready to try to learn actual vs paper trading again.
Don't want to persist in being off topic too much here, but could be what a nervous guy at the pharmacy counter asks for when he wants to get a condom. BSAM
I am sure you are not the only one considering this right now. Today, no doubt, is a terrible day. Everything I followed today went the opposite way and I am down a chunk. But I think that it is important to keep some perspective. Everyone has draw downs in their accounts and you must be psychologically ready for that. What you have to ask yourself is; "How bad do I want this". If you really enjoy this and you see yourself doing this for the rest of your life, you must be willing to take some blows. If, on the other hand, this is just a hobby for you, find a cheaper hobby. The best way I can describe what I mean is that scene from that movie 'An Officer and a Gentleman'. When Richard Gere's drill sergeant is trying to break him and in the end he asks him; "why don't you just quit!". He replies "I have nowhere else to go". (or something like that) You must want it or need it that badly. Good luck
as far as whether you should study the winners or the losers, i guess that depends upon your personality. as far as trying to daytrade stocks with 5k, yeah, I don't think you are sufficiently capitalized to daytrade. It is strange but true that the shorter term you try to be, the more capital you need to stay in the game. If you could do a couple of nice position trades and keep saving you could have $10,000 in a year and be one year smarter and go at it again. By the way, check out those small gold stocks ( the legit ones ). You might be able to ride those for a year and get your money back.
Mike, As was mentioned in an earlier post, 5k really isn't that much. If I were you, I would concentrate on getting some risk capital together...might take you a while...and while you're doing that, paper trade as often as you can. Paper trading isn't a substitute for trading using $$ but it really isn't that far away from it either. Keep your trading office up and running as much as possible and keep your data services if you can afford them. The idea isn't that you're getting out of trading but just making a few changes and adjustments to the way you operate in order to stop the flow of red ink. Paper trade and see what works...keep a journal too. You'll want to refer to those notes more than you probably thought. Good luck! Jim (aka airspeed)
Sorry guys I should clarify, 5k was the amount I set to lose out of a capital base of 20k (actually I am back above that now!). All of the advice is really good and thanks for the encouragment, it is obvious to me that I'm setting a too unrealistic loss amount for daytrading. I gather from all of the posts that most of you do not have a break point, but rather will keep at it regardless. Not saying that is a bad thing just and observation. Cheers Mike
actually I too set a $5 loss limit when I first started and yes, I hit it . I didn't trade at all for a month. Basically, I put myself in time out like a little kid. When a person is learning to trade in a major firm like Goldman that is exactly what they do. When they lose down to a certain point, whammo, they become the water boy for the other traders for the rest of the month.