beginner prop strategies

Choose a stock that does not have too many people in it. Something within 300k - 600k daily volume. Make sure the stock chart makes nice clean movements during the day. Watch how price reacts when a bunch of bids/offers show up on l2 or when a bigger than average size shows up on l2.

Tips...

Choose tight spreads for now (max 3 cents)

Choose stocks under 50 for now...

Choose stocks that have a nice range of at least 75c during the day between hi and lo points.

Do research daily to find new stocks.
 
Don't do this -

Spend as much time as possible on ET and soak up the wealth of knowledge here

That would death to your trading. Get some excellent training, make a solid plan based on patterns and strategies that repeat 50% of the time, trade light, and no emotions.
 
gptrader --

Sounds like you think most of the information on ET is not valuable.

Other than studying the available texts (Edwards and Magee, etc.) and taking classes and seminars, what do you specifically recommend in terms of a getting excellent training? Can you recommend a mentor and other ways to train properly?
 
Man, you are just asking for trouble with these types of questions around here. Good luck.

Quote from Kris:

Today was my first day of live trading at the prop firm. Didn't do particularly well lol

I'm wondering if you guys could give me some basic strategy ideas to get going. At one point today I saw a flurry of activity on the stock I was trading, and had I been quicker could of jumped on the bandwagon and made some money. Is this the essence of it? Should I wait for activity and then enter aggressively (market buys)?

Thanks for the help
More...
 
yes Vingbel, I have seen too many threads from those wanting to do good get trashed by negativity that inevitably enters these. My warning to him is this site is of limited value,
 
Quote from Kris:

Today was my first day of live trading at the prop firm. Didn't do particularly well lol

I'm wondering if you guys could give me some basic strategy ideas to get going. At one point today I saw a flurry of activity on the stock I was trading, and had I been quicker could of jumped on the bandwagon and made some money. Is this the essence of it? Should I wait for activity and then enter aggressively (market buys)?

Thanks for the help
More...

Stick to stocks in play, the lower volume range bound stocks will just chop you up.. oh and trend is your friend, fight the compulsion to want to pick tops and bottoms
 
Quote from Kris:


The prop firm has some methods that are working for a number of traders, but it'll take some time before we get into those. One thing they did make clear is that they did not want us using charts and TA while learning Level 2.
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That's a losing churn & burn strategy. Level 2 trading is played out big time.

The fact is that the prop firm wants you to generate commissions, hence having you scalp Level 2 is beneficial to them. It's very unlikely you will ever start making true profits, hence why not make the most out of it for them.

If the firm actually wanted to create profitable traders, they would dump all the micro scalping strategies and have you play with 100 shares to catch longer term moves based on something more than a big size showing up in Level 2. Sector trading, mean reversion, daily chart break outs, news & earnings, etc.
 
Quote from gptrader:

Don't do this -

Spend as much time as possible on ET and soak up the wealth of knowledge here

That would death to your trading. Get some excellent training, make a solid plan based on patterns and strategies that repeat 50% of the time, trade light, and no emotions.
More...

Actually, there are many nuggets here. Back when tapereading NYSE actually worked very well, there was an amazing post made by a member which contained 10x more knowledge than all of the "training" programs by the prop firms.

All his prop firm will teach him to do is generate commissions and lose money slowly.
 
Hydro,

Could you elaborated when you say that you no longer believe tape reading works? Are you including PA? If so, why don't you think PA works in todays's market?

gptrader and clark,

Agreed. But it's hard to find other traders to interact with. Any suggestions would be welcome. Thanks.
 
Quote from vingbel:

Hydro,

Could you elaborated when you say that you no longer believe tape reading works? Are you including PA? If so, why don't you think PA works in todays's market?
More...

PA? Do you mean TA?

Tapereading, as in tapereading the specialist, is no longer viable. Maybe on some thin stocks where order flow still sits mostly with the specialist.

You can kinda taperead electronic markets but it's just a tool, not a full strategy. Before NYSE going Hybrid (really a year before that event) you could make money solely based on Time & Sales in most stocks. You did not even need charts or OpenBook. The controlling order flow went through the specialist, so you just needed to learn him.
 
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