Okay, another question. I always assumed that I would trade stocks, mainly because that would allow me to trade something that I understood (i.e. I could choose a company that I had actually heard of or dealt with). Should I expand my options? I've heard a lot about Forax but I'll be honest with you - I know absolutely nothing about currencies. It would seem silly for me to jump into trading something I know nothing about. But you tell me. Am I looking at it the wrong way?
You dont have to know how an engine works to drive a car. Most people know to change their oil and rotate the tires every x miles and thats about it. SO..no. Once you get started, and learn some basics you can leap from one market to the next. Will you make money, is the question. cm
Knowing a stock of a company will have zero bearing on whether or not you can trade it well. The fact that you think that having heard of a company will be of any help shows that you have yet to even watch stocks trade intraday. Its perfectly ok to be a rook, we all were at one point. But listen to some of the guys here, you have a long road ahead and only those who want it worse than anything else will have a chance to make it.
Hey what's going on man? I'm doing great, but keep gravitating to net zero for the month so far. LOL I go up, I go down....rinse, repeat...but hey I am trading very small right now on purpose, so it's all academic really. Good to hear from you bud.
Since you have two 2's and no 4, I took the trouble to reorder your post to get a set of answers to you at my convenience. 1) I expect to get a lot of varied responses on this one but which strategy is proven to work better? Fundamental or Technical. To be honest, I'm not entirely sure what either of these mean. But I believe fundamental is more Cramer-like (do a lot of research on the company, stock, etc.) and technical is more graph-based (study the graph and try to find trends). You know enough to not go into any more background detail at this point. This will prevent you from drawing conclusions from what you just come in to contact with. To make this point another way read Catherine Burton's comments on Craig Effron. You will find that both are required. Fundamentals are used to focus on where to make money in the markets and tachnicals are used to focus on how to make money in the markets. In other words part of the markets have high Beta stocks which offer you the opportunity to make money. Go to wiki and read about how beta's work (Dummies omitted this stuff). You sort to have a high Beta universe of quality stocks. The software is all done for this so do not use your talents in programming to make mistakes it this matter. Check Fidelities wealthlab scripts. You may not find anything since, from your Q's you do not have "search" understood as yet. Technicals make it possible to make money rather quickly. You have grossly undershot the amount of money that can be made over time in the markets. Look up the compound interest formula and put into it the range of stock trading possibilities: The exponent varies from 40 to 100 and the profit varies from 3 to 15 per turn. By making this family of curves you can see what your performance target is. Picking a pair like 80 and 10 is common for traders who have the attitude you do about acquiring wealth. 2) How helpful is software in this job? I'm a computer freak so I'm leaning towards anything that involves software helping me out. Is there software out there that traders just can't live without? The software that recognizes trends and, I assume, gives you probabilities on when to buy a stock is something I'm intrigued by. But I don't know if it works. Does it? For you fof what you want exerything has been done for you. The universe is sortable daily and you just do the addand delete thing. Use quality to adjust the size of your universe to about 100 stocks. for trading you use a platform where you make a list of your universe and a list of stocks to trade for any given day. 80 means you hold for three days and 10 means each turn makes 10 percent. You need to pick the list you will be trading from the universe. doing it by hand makes you riher faster but each morning your computer will do it for you automatically. Sort your list by a column that measures daily cummulative volume divided by the 65 day average. The stocks you want to trade and hold will come to the top of the list every morning. Look at them and use the trading channel they are in to pick the ones beginning to move. Hold the noe making progress and sell the ones that have completed their moves. an example of a column that does what I described is "unusual volume" in Qcharts. 3) How long should I practice before I start trading for real? It will take you a week to get set up and operational. during this time you are practising hardest. So far getting set up did not occur to you. This is a poor omen. You, like it or not, are always doing things for real. If you do what is suggested to you here you will be a multimillionaire. Everything you decide to not do will be a detraction from being a rich guy. 4) What is the practice-trading software preferred by people on this board? I am unfamiliar with practice trading software. On the other hand you can just use a combination of platforms, a written trading log, a journal to debrief and a mentor(s). You just do it day by day after you get set up. Integrity will come up for you very soon. To the extent that you log the facts and keep a debriefing journal where you can always trust yourself to be real, then you progress. Now you have no knowledge, no skills and no experience. Experience with a good and complete display with a quality feed of data allows you to have all you need to use experience to acquire knowledge and skills. Making a sort list of stocks and viewing their charts (use 15 min or 30 minute price volume chart) allows you to fully annotate charts and complete a log. Daily you debrief in your journal. You write down the knowledge you are learning and the skills you are acquiring. It is the opposite of digging a hole and having a record of repeated failure (See kidpwrtrader, et al.) 5) How much should I realistically expect to make? I know this is a vague question requiring more information (how much are you going to risk? are you going for big gains or small gains? etc.) but from a brief glance at the threads in this forum, it's hard to figure out who, if anyone is actually making any money. Are there people on this board who make a comfortable (>100k) living just by trading? Or is that a pipe dream? If you are one of those people, how long did you work at trading before you became successful? What system do you use? Any advice? Roughly speaking nothing changes (based on 50 years). There is always a universe. There is always the cyclic pattern of price movement over the same period; the percentages haven't changed. you will be repating, perhaps, the experience of many people who sat down and got set up and made money from day ONE. You can choose to do otherwise. there is almost no learning curve since all high beta stocks of quality all look alike. There is nothing wrong with being ignorant at the beginning. Today everything is all tooled up for a person. There is the choice to invent stuff or to just sit and be given trades to do or to just set up your computer to be able to follow a simple routine that makes a lot of money. Try to consider the thrird mentioned choice. You have a brain and you can build it quite quickly to work for you to make money. If you choose to clutter it up by learning repeated failure, gradually the Lizard Syndrome will kick in and throw you out of the game forever (your life time). 6) Finally, any general advice? Maybe you can recount your earliest mistakes so I don't make them. Making mistakes, up to a certain point, is an accelerant. You will be making mistakes here and there. You put them in your journal and you debrief from them in comparison of doing what was actually told you by the market. You are allowed to put anything in your journal you wish. Use a glue stick and scissors. Let me give you an example. you left out 4 and you put in two 2's. try rewriting you itemized list so that there is only one Q in each item. then do searches on each item noting the search sequence and print and cut and paste the results in the journal you are going to by. Purchase at least six of the bound journals so they will line up nicely on your library book selving. I use five screens; do you need to picl up a few more?
Speaking as a rookie myself ---- what I have discovered trading 1 YM contract on a 10k account ----- its easy to lose 500-600 bucks in a day --- and on a 10K account you can't have too many of those days I started thinking I could do 3 trades a day and clear 5-600 bucks a day the market agreed with me in January - and then disagreed violently in February -- I have learned that this is typical market behvior (cost me 1600 bucks to learn that last week and this week) So my next step - currently underway is to learn to hit singles (ie 50 bucks positive on a trade is fine) and do it consistently enough that after 3 trades in a day --- I have a positive P&L -- no matter how small once I have a batting average on a daily basis that yields me net positive P&L - no matter how small --- I think I can increase the # of contracts --- say to 2 per trade --- and try to grow my account so my observation trading new on a 10k account preservation of capital is the firstest bestest rule hope this helps good luck
The only real way to learn how to trade is to blow out a few accounts. I blew up more accounts than I can remember. All I did was lose for the first 3 or 4 years. For me, trading was much more than making money, it was a passion or a way of life. I was willing sacrifice everything to achieve success in this business. I worked 3rd shift, took menial jobs, and studied the market until my eyes were blood red. There wasn't a time during the day that I wasn't thinking about the markets. When I lay down at night and closed my eyes I saw candlesticks. I'd dream about trading. I plowed on year after year and all of a sudden I woke up one day and I was a winning trader. It was as if someone flipped a switch and turned me into a trader. I just couldn't stop winning. The blood, sweat, and tears I put into learning this business finally began paying off. I made a lot of money fast then lost a lot of money fast but the losses didn't really bother me because I knew I had turned the corner but I was making some stupid mistakes. Those mistakes were easy to fix so I just fixed them with a little patience and discipline. I would suggest you sim trade for as long as you possibly can. Keep very detailed records of your trades. Run this experiment.....wait until the market starts falling and just buy (in sim mode). When the trade goes bad buy again (this is all sim mode). When that goes bad buy again, and again, and again, and don't stop buying until one of those trades finally works. Pay CLOSE attention to the difference between what worked and what didn't. I can tell you this.....the difference between losing trading and winning trades can be summed up in one word ----->>>> Patience. None of us are born with it but all of us can learn it. Patience, focus, discipline. That's the holy grail!!
is this a joke ?? If not, focus on POINTS, not on money. It means, you are indifferent to losing money, and your mind is aligned to just making good trades and following your trading rules.
I'm also a relative newbie who has yet to be consistently profitable, so I might have some recent perspective on these issues... 1) It's common advice here to paper trade before doing it for real, but to me that's like learning to drive by backing in and out of your driveway. I feel like the only way to build confidence and get used to the 'emotional' side of things is to put actual cash on the line. There are also practical problems with using "sim" accounts or whatnot (like differences in fills and slippage). I find that trading very small lots (like 1 futures contract at a time with tight stops) works to hold down my risk. However, if you have a relatively small amount of capital and you still need to learn very basic things, e.g. how stop and limit orders work, paper trading might be a good idea. 2) I don't know that very many people here are able to invest on fundamentals only. Fundamental analysis is for mutual funds and the like, i.e. those looking for relatively low returns over a long period, and even the pros have trouble beating the market that way. I previously traded index ETFs and now trade futures because I found that picking stocks based on business prospects, earnings, clinical-trial results etc. and holding overnight just did not work for me; I lost about $13k learning that lesson. I've been studying the charts since I first started out. Now I'm using intraday charts in combination with basic general knowledge about market conditions. 3) I'm not one of those people, but if you have a consistently profitable system, your returns are limited only by the position size and leverage you're willing to take on. My long term goal is in the $100k/year range. 4/5) Not quite sure about this one. I spent a few months trying to come up with a profitable autotrading system, but I think I could have spent years on it without succeeding, especially as I wasn't a profitable "manual" trader. Personally, I find that learning the chart patterns, etc. is hard and time-consuming enough without also fiddling around with software that claims to print money for you. I know that some people do use market-scanning software to look for rare, but consistently profitable setups in a wide variety of stocks. The hard part is identifying a setup like that. 6) My best advice is to read all the threads on ET, especially the "day trading 2.0" thread, watch all the tutorial videos you can find (there's a thread with a number of PureTick videos), read all you can about chart patterns, indicators and so on. There are so many different strategies out there, the difficult part is finding the one that works for you. Also, be aware that it's much harder to pick up than you might think, I've had several stretches where I thought I might have broken out of the learning curve, only to get slapped with a big drawdown the next day. Still working at it though... Good luck!
If you have nothing to add....then don't. How bout you go back kissing Timmay's ass and leave us alone?