Quote from F-Trader:
Only 1 in 500, LOL
More like, 1 in 50,000 :eek:
Amen.
F-Trader, you summed up everything I said in your first post on this thread - that's a much quicker way of saying the same thing.
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$2000 - what to look for?
- Thread starter ChildsPlay
- Start date
Amen.
F-Trader, you summed up everything I said in your first post on this thread - that's a much quicker way of saying the same thing.
Quote from profitseer:
yeah you're ok. www.interactivebrokers.com is a good broker with a 2k min initial investment.
you can trade 100 shares for around $1.00 on commissions
don't ever let one trade get out of hand and wipe you out, cut your losses short and save back enough for another trade
you'll do just fine
profitseer
Ummmm, ok... now you probably have way more trading experience than I.
So if 19 out of 20 who take the suggested approach fail, then how can we tell the person they will do fine when it's almost a given that they will not do fine? Or are you saying that xx% of beginners are going to fail and capitalization doesn't have anything to do with it?
If a risk management plan allows for a loss of 2% of equity per trade max, you must be suggesting that the trader scalp the markets with very tight stops, because that requirement couldn't be met doing swing trading, unless you trade only stocks at i.e. $5 and under.
Quote from ChildsPlay:
So just because I dont have like $50k to get started means I cant do it? Im not going to be trading to pay bills - but with the banks offering crap for returns I figure I gotta be able to make more then the 2% the bank will give me if I leave the money in the bank.
Your time frame to become profitable is absolutely unreasonable for the current market. The best trainees will take about six months to start making money, otherwise your potentially looking at a year. On top of that, your throwing to much pressure about your 2K. Believe me when I tell you, when your desperate to succeed and worry about your capital, it'll never happen. Prop firms will take you with 2K, but chances are you'll be disappointed in a month when you're out the 2K, and have to look for another job cause you need to pay the bills. Most prop firms even let you go into their capital, but if you don't have the time frame to make it past the learning curve, you won't succeed. Save up enough to live on for one year at a minimum, then try your hand at training. Trust me on this.
Quote from ChildsPlay:
So just because I don't have like $50k to get started means I cant do it? Im not going to be trading to pay bills - but with the banks offering crap for returns I figure I gotta be able to make more then the 2% the bank will give me if I leave the money in the bank.
You don't need 50K to start. I think you've got enough to start learning right now. My suggestion is for you to open an account with IB (2K will get you a margin account). Go to scottrade and sign up for their free service; then, go over and open a free account with Quote Tracker and feed it with your scottrade registration. Don't start trading immediately; paper trade for at least 3 months or until you get something going that works for your style of trading. By then, you should be able to start taking 100 to 200 sh. positions (absolutely no more). Trade stocks greater than $10 that trade at least 1M per day and stay away from penny stocks. Finally, make sure you have a stop in place on every trade at around .25 and sell or cover once it's hit, no questions asked.
Once you are profitable at least 75% of the time, opt to get a better feed. By that time you should be making money, and you can afford the extra expense. I realize the stop is tight, but you can not afford to lose much at one time while learning (or any time for that matter). Also, If you could scrape together an additional $500 it would be better; that way you've got a little cushion and you wan't slip below the 2K requirement for the IB account.
Losing is a part of trading, so learn to deal with it; but to increase the odds in your favor, remember to always, always CHOOSE YOUR TRADES WISELY (make sure you have at least three reasons why you're entering the trade);you will only get 3 trades in any 5-day period (PDT rule). I would also suggest daytrading at this point-- that is, buy in the morning and close out by the end of the day-- you can not afford to hold over night. Also, take small profits-- a $100 profit would be considered a homerun.
Keep in mind that you can't expect to make alot of money this way; right now, you're just trying to perfect your trading strategy. Once you're able to increase your account to $25K, (PDT rule will no longer apply) your ability to be profitable will also increase. By that time, hopefully, you should be making less mistakes with the experience you get now.
Hope this helps.
Good trading.
Quote from ChildsPlay:
So just because I dont have like $50k to get started means I cant do it? Im not going to be trading to pay bills - but with the banks offering crap for returns I figure I gotta be able to make more then the 2% the bank will give me if I leave the money in the bank.
They say that if you make one dollar in trading by the end of the year, you will be in the top 10%, as 90% of people who try it fail. Kinda puts the 2% bank return in a new perspective. Also you didn't specify wether the 2k is your whole capital or just the amount you are willing to loose or risk capital. if it is all your capital, then forget trading and try investing, as commissions will eat the majority of your dough.
Good luck
Don't let the naysayers take you down. Yes, it's very difficult, but $2000 is not undercapitalized if you trade appropriate share size. Find a broker that lets you trade odd lots or specialized tracking funds that are designed for the small trader who wants to be active.
As long as your expectations are in line with your risk profile, you can play it safe. You may win or lose $500 after 12 months, but that's probably what you are looking for. If all goes well, then you can consider adding more money to your trading account.
Also, since your account size is very small, you will have to keep your trading costs at zero. Fortunately with the internet this is feasible. Just take a conservative swing trading approach and get your feet wet.
As long as your expectations are in line with your risk profile, you can play it safe. You may win or lose $500 after 12 months, but that's probably what you are looking for. If all goes well, then you can consider adding more money to your trading account.
Also, since your account size is very small, you will have to keep your trading costs at zero. Fortunately with the internet this is feasible. Just take a conservative swing trading approach and get your feet wet.
$2000 is enough. Even if you happen to lose it you will have gained a lot of experience. Many of those who made it big started as big failures. Read 'Market Wizards' to learn more about it. Don't let others discourage you. It's what you think that matters and not what they think. Everyone is different. Do your research. A lot of reserach. And then still a lot. Only then play it. Safely at first, then more agressively. There are ways to beat the market. It only takes time to learn them.
well nik, it's almost a given that anyone with any amount of money will fail as a trader. But they don't fail because of the amount of money they start with. They fail no matter how much or how little they start with.Quote from traderNik:
profitseer
Ummmm, ok... now you probably have way more trading experience than I.
So if 19 out of 20 who take the suggested approach fail, then how can we tell the person they will do fine when it's almost a given that they will not do fine? Or are you saying that xx% of beginners are going to fail and capitalization doesn't have anything to do with it?
If a risk management plan allows for a loss of 2% of equity per trade max, you must be suggesting that the trader scalp the markets with very tight stops, because that requirement couldn't be met doing swing trading, unless you trade only stocks at i.e. $5 and under.
Capitalization only comes into play when you are talking about making a living.
The question wasn't, "Will I make money?" the question was "How do I try with 2k?"
All the ways you suggest are possibilities, and there are many more. I once told a guy he didn't have enough to make money on a $40 stock. He bought 33 shares and it moved up 70 points. Made me look like a real fool.
His max loss is 2k, and he will have more to add later. What's needed now is experience, not trading capital. The experience can only come by trading, the trading capital will come later or maybe not. Some people lose 2k and it cures them for life.