A Daytraders Fate

Quote from EdgeHunter:

If you can put in 26K or 27K in your IB account you can daytrade the ETF's - SPY, QQQQ... without running into the PDT...

The <b>Spy shares track the ES futures at 98.7% correlation since they are arbed to it too... </b> so anyting that happens in the futures happens in the SPY

This way <b>You can prove you have an edge for only pennies on the dollar</b> by starting with this progression and moving forward when you have a successful week... and moving backward on unsuccessful weeks...

Start with...
Week One: 50 spy...
Week Two: 100 spy
Week Three: 150 spy
Week Four: 200 spy
Week Five: 300 spy
Week Six: 500 spy (500 Spy = about 1 ES futures contract)
Week Seven: 750 spy
Week Eight: 2 ES =1000 SPY's
Week Nine: 3 ES
Week Ten: 4 ES
Week Eleven: 5 ES
Week Twelve: 7 ES
Week Thirteen: 10 ES
Week Fourteen: 12 ES
Week 15: 15 ES
Week 16 (Only 4 Months) 20 ES...

So this is how you can prove an edge in the futures and with risking only pennies...

Chart the SPY against the ES you will see its correllated...

4 months... a drop in the bucket...

if you have a losing week move backwards a step until a winning week and then move forwards...

cj...
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That's excellent advice! Actually I would start from 10 spy !:cool:
 
Quote from Bearbelly:

Lots of charting software works off IB data. Quotetracker, Sierra Charts and Ensign to name three. They are very inexpensive and work pretty good. You will get lots of different advice here but if I were you I would look around the net and find a simple strategy and trade it with 1 YM contract for a few weeks. I think this will give you a good idea of what you are getting into without costing you too much money.
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Is there any real advantage to these charting packages over the boxed IB charts? I used to have esignal and Cybertrader as a broker (when I didn't care about costs) and didn't see too much value in charting software. It ended up being more of a handicap since I would try to use all the "advanced charting features" and trade off of patterns that I only I (and a select few) knew of!! Not a good policy.
 
Quote from flipflopper:

Is there any real advantage to these charting packages over the boxed IB charts? I used to have esignal and Cybertrader as a broker (when I didn't care about costs) and didn't see too much value in charting software. It ended up being more of a handicap since I would try to use all the "advanced charting features" and trade off of patterns that I only I (and a select few) knew of!! Not a good policy.
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IB chart is way too ugly and offers little way to adjust. Also, you can use Ensign or other software to practice playback, which I find very useful.
 
Quote from poohbear:

That's excellent advice! Actually I would start from 10 spy !:cool:
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Yes, i wish someone had mentioned this to me when i had started...

cj..
 
Quote from john99:

I'm not critisizing, but is that how you started?
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No, its funny, that is how i learned to play BlackJack profressionaly and it worked from day one... but in futures... like most... i just jumped in and got whacked from Day One...

no one ever explained i could start this small (spy versus es) so i did not know i had a choice... so now i just share the idea here and there...

Acutally, if the SPY had same taxes rates and same margin costs / leverage as ES i would <b>only</b> trade the SPY... it has a better spread and smoother entry and exit...

i have helped friends of mine start this way and they don't come in so scarred as in the full jump way...

cj...
 
Quote from Mvic:

If you have swing trading skills then why not get a decent job and swing trade EOD until you have enough capital to trade and live off of. You are giving yourself about 0 room for error the way you plan to proceed. You will be scared money and that is fatal. Realistically the chances of you making enough to live on the next two years on the small stake you have to start with are slim to none especially as you haven't even ever day traded and have no edge. If you are serious about trading and really love it then get a job, raise your stake to at least $50-100K, put enough on top of that aside to pay for living expenses for 1 year, and in the mean time spend you free time working on your swing trading and paper day tarding afterhours with a replay software like esignal and when you have your edge down such that you are making money consistently each week and you have all your financial ducks in a row then take the plunge IF you really love the idea of day trading.

Trading is no different than any other business and if you don't do the above you will be giving yourself even less of a chance to succeed than the still SMALL chance you would have if you followed my advice.

FWIW I have been trading for 20+ years and have made a good deal of money from the markets but I have never been scared money and I have NEVER seen scared money succeed.
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I don't think I've ever been accused of being scared money!! If anything I am quite aggressive and have adapted a risk averse dimension to my trading. I have enough to be live comfortably for at least a year. But I also have to look at my opportunity costs. I would need to make over 6 figures to live how I'm living now. My total compensation package was about 125K including benefits. I ideally I'd like to make well over 200 if I was to take on this challenging time intensive career otherwise it may not be worth it. Right now I'm on free roll to take my chance and see how it goes.
 
Quote from EdgeHunter:

No, its funny, that is how i learned to play BlackJack profressionaly and it worked from day one... but in futures... like most... i just jumped in and got whacked from Day One...

no one ever explained i could start this small (spy versus es) so i did not know i had a choice... so now i just share the idea here and there...

Acutally, if the SPY had same taxes rates and same margin costs / leverage as ES i would <b>only</b> trade the SPY... it has a better spread and smoother entry and exit...

i have helped friends of mine start this way and they don't come in so scarred as in the full jump way...

cj...
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Isn't it true if you classify yourself as a 'trader' you only need to pay capital gain tax on your day trading income even if you are trading stocks?
 
Quote from flipflopper:

I don't think I've ever been accused of being scared money!! If anything I am quite aggressive and have adapted a risk averse dimension to my trading. I have enough to be live comfortably for at least a year. But I also have to look at my opportunity costs. I would need to make over 6 figures to live how I'm living now. My total compensation package was about 125K including benefits. I ideally I'd like to make well over 200 if I was to take on this challenging time intensive career otherwise it may not be worth it. Right now I'm on free roll to take my chance and see how it goes.
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If you want to continue having your lifestyle now you would be better off getting another job. If I were you and want to do full-time trading I will rent a cheap studio and plan to live on no more than 2K per month. You should never count on trading profits to pay your living expenses. That destroys your psychology!
 
Quote from flipflopper:

ok... I know that asking for advice on message board is not the smartest thing in the world but here's my story.

Yesterday I got laid off with a good severance package. I'm 28 years old and I have been trading stocks on and off for about 4 years. I took a long break and invested most of my money for the long term (in SONS which is finally paying off). In August I started trading again. I took some money that I had saved up apart from my investments and 401K (12 Grand) and turned it to 25 by February by swing trading stocks. I then got my day trading power and two weeks ago hit 37. I am back down to 31 but I feel like I am losing my touch since at one point I couldn't lose.

I have been interested in trading futures but was unable to since my companies firewall blocked most brokerage software and I was using Fidelities ATP to trade. I have opened up an Interactive Brokers account and am funding it tomorrow with an initial 20K.

It looks like IB is a good broker but does anyone recommend a separate charting software. What else do I need to get started? I already have two 24inch screens. I always try to keep costs low but not if the price is too high price!! Right now I'm getting paid and full benefits till August so this is a good time to try my hand at full time trading. Would anyone recommend day trading as a long term career? I have biz-econ degree from UCLA and feel like I would be putting it to waste if I started trading.

Any thoughts/pointers/suggestions/recommendations are appreciated.
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since you went from 12K to 36k with swing trading and daytrading why not just repeat what you've done before? 200% returns and you got all the major funds beat. I don't see why you need help.
 
Quote from stock_trad3r:

since you went from 12K to 36k with swing trading and daytrading why not just repeat what you've done before? 200% returns and you got all the major funds beat. I don't see why you need help.
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I am not ignorant. I know that a lot of that run must have been luck. I'm looking for long term consistency and improving my strategy. I am now able to dedicate all of my time to trading and don't want to burn a lot of capital through the learning curve.

I'm not trying to reinvent the wheel I want to learn from others on what tools are out there. Futures are new to me and from what I've read a better instrument to trade.

Complacency has never been my strong suit.
 
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