i fail to see the utility of this "burning money" exercise. better to take that two week paycheck and add a couple of 19" monitors to your setup to better see the action. burning money seems to me to make as much sense as walking on hot coals in your barefeet. proves nothing IMO. accomplishing the hot coal walk or the burning money exercise would mean nothing to me. i would have no sense of accomplishment at all, in fact i would feel a little foolish to have done it.
Day trading Starting Steps???
- Thread starter Kastro_316
- Start date
Great post man.
Thank you very much
Thank you very much
Here is a great first step you can take that will cost you less then $200 and will help you to begin to build some experience.
Step 1
Sign up for a charting service (qcharts is $80 a month)
Step 2
buy "Technical Analysis of Stock Trends"
http://www.amazon.com/exec/obidos/A...3334829/sr=8-1/ref=sr_8_1/103-3108654-9736666
Step 3
Pick 2 patterns (I suggest double bottoms and tops)
Step 4
Pick a stock, and a timeframe. (if you want to be a daytrader try 5 or 15 min bars) Now, scroll back as far as you can and go through that stocks history BAR BY BAR. Write down on a piece of paper (very important) your entry, stop level, and profit objective every time you identify a pattern. Now, decide if you would like to take this trade. Scroll forward bar by bar until the stop or the profit objective is hit.
This is so simple to do, and you will begin to build some market sense. Be aware as you do this, notice false setups, easy runs to the target, and the price action that preceded it.
Step 5
After you are comfortable with the classic t/a patterns, buy Alan's book..
http://www.amazon.com/exec/obidos/A...3335579/sr=2-1/ref=sr_2_1/103-3108654-9736666
Read and re-read the parts on pattern failure, this is a key concept, and he covers it well. After you know what "should happen" You will be able to sense when it's about to go horribly wrong! (which is a hell of a lot of fun, short GM at 64, cover 59 and change
(most ignore this bit, but I promise it's good advice)
Do this for at least two weeks before you make your first trade, and then never trade more then 50 shares for your first 2 months.
You need to get a clue first, then worry about money management, position sizing, and all the tools needed to turn your good stock picks into money.
Best of luck, this will be hard work but believe me, it is very much worth it!
Good Luck and Good Trading,
-Bo Yoder
Step 1
Sign up for a charting service (qcharts is $80 a month)
Step 2
buy "Technical Analysis of Stock Trends"
http://www.amazon.com/exec/obidos/A...3334829/sr=8-1/ref=sr_8_1/103-3108654-9736666
Step 3
Pick 2 patterns (I suggest double bottoms and tops)
Step 4
Pick a stock, and a timeframe. (if you want to be a daytrader try 5 or 15 min bars) Now, scroll back as far as you can and go through that stocks history BAR BY BAR. Write down on a piece of paper (very important) your entry, stop level, and profit objective every time you identify a pattern. Now, decide if you would like to take this trade. Scroll forward bar by bar until the stop or the profit objective is hit.
This is so simple to do, and you will begin to build some market sense. Be aware as you do this, notice false setups, easy runs to the target, and the price action that preceded it.
Step 5
After you are comfortable with the classic t/a patterns, buy Alan's book..
http://www.amazon.com/exec/obidos/A...3335579/sr=2-1/ref=sr_2_1/103-3108654-9736666
Read and re-read the parts on pattern failure, this is a key concept, and he covers it well. After you know what "should happen" You will be able to sense when it's about to go horribly wrong! (which is a hell of a lot of fun, short GM at 64, cover 59 and change
(most ignore this bit, but I promise it's good advice)
Do this for at least two weeks before you make your first trade, and then never trade more then 50 shares for your first 2 months.
You need to get a clue first, then worry about money management, position sizing, and all the tools needed to turn your good stock picks into money.
Best of luck, this will be hard work but believe me, it is very much worth it!
Good Luck and Good Trading,
-Bo Yoder
Great post Momo!
I wrote this a long time ago... same concept
THE $100 BILL
Soldiers wishing to join the Special Forces go through unbelievable physical and mental hardships as they try to prove they have what it takes to be one of the worldâs elite warriors. Those who succeed are true warriors, fighting in small task forces, and conducting their campaigns/waging their wars on a very personal level. Trading is economic warfare on a very personal level, and traders go through a lot of similer experiences as they fight their way through the learning curve hoping to count themselves among the few consistently profitable traders. Soldiers go through exercises designed to break down certain mental responses and thought processes detrimental to performance. Traders need to also break down and change certain mental processes.
Try this exercise. Take a $100 bill and throw it out a convenient window. Sit down in a quiet place by yourself and wait 15 minutes. After this time has elapsed, you may go outside and retrieve the bill. What thoughts are running through your mind as you sit? You are probably feeling foolish for doing this in the first place, and are trying to remember if there was any wind outside. Thoughts flit through your mind.
I could just run out and get itâ¦
But Iâm supposed to sit here for 15 minutesâ¦
I donât know this author from Adamâ¦What does HE know? I just read about this stupid exercise, the author canât make me do anything!
It IS windy out there, I knew itâ¦
Iâm not going to be able to find that billâ¦
What was I thinking?
Iâm going to lose $100â¦
I make $X an hour, it is going to take me how many %#$& hours to make that $100 back?
Iâm going to lose $100â¦
Iâm going to lose $100â¦
Iâm going to lose $100â¦
I AM GOING TO LOSE ONE HUNDRED DOLLARS!!!
These are some of the same destructive thoughts that go through your mind as you initiate, and manage your trades. They are counter productive and must be controlled and eliminated. Instead, what if the following were your reaction to the $100 exercise.
It is mid day, the area outside my window is quiet, no one is about. There is a bit of wind, so I may have to hunt a little. I routinely risk $500 or more as I trade, so if this exercise improves my trading substantially, it will be a 5 to 1 or richer risk reward endeavor. Nobody forced me to take this action, I am in total control at all times. But, bottom line⦠If for any reason I was unwilling to risk my C note, I would not have thrown it out the window! A controlled, emotionless, style is one that every trader must cultivate.
-Bo
I wrote this a long time ago... same concept
THE $100 BILL
Soldiers wishing to join the Special Forces go through unbelievable physical and mental hardships as they try to prove they have what it takes to be one of the worldâs elite warriors. Those who succeed are true warriors, fighting in small task forces, and conducting their campaigns/waging their wars on a very personal level. Trading is economic warfare on a very personal level, and traders go through a lot of similer experiences as they fight their way through the learning curve hoping to count themselves among the few consistently profitable traders. Soldiers go through exercises designed to break down certain mental responses and thought processes detrimental to performance. Traders need to also break down and change certain mental processes.
Try this exercise. Take a $100 bill and throw it out a convenient window. Sit down in a quiet place by yourself and wait 15 minutes. After this time has elapsed, you may go outside and retrieve the bill. What thoughts are running through your mind as you sit? You are probably feeling foolish for doing this in the first place, and are trying to remember if there was any wind outside. Thoughts flit through your mind.
I could just run out and get itâ¦
But Iâm supposed to sit here for 15 minutesâ¦
I donât know this author from Adamâ¦What does HE know? I just read about this stupid exercise, the author canât make me do anything!
It IS windy out there, I knew itâ¦
Iâm not going to be able to find that billâ¦
What was I thinking?
Iâm going to lose $100â¦
I make $X an hour, it is going to take me how many %#$& hours to make that $100 back?
Iâm going to lose $100â¦
Iâm going to lose $100â¦
Iâm going to lose $100â¦
I AM GOING TO LOSE ONE HUNDRED DOLLARS!!!
These are some of the same destructive thoughts that go through your mind as you initiate, and manage your trades. They are counter productive and must be controlled and eliminated. Instead, what if the following were your reaction to the $100 exercise.
It is mid day, the area outside my window is quiet, no one is about. There is a bit of wind, so I may have to hunt a little. I routinely risk $500 or more as I trade, so if this exercise improves my trading substantially, it will be a 5 to 1 or richer risk reward endeavor. Nobody forced me to take this action, I am in total control at all times. But, bottom line⦠If for any reason I was unwilling to risk my C note, I would not have thrown it out the window! A controlled, emotionless, style is one that every trader must cultivate.
-Bo
first, read hitman daytrader journal, the beginning, top to bottom http://hitmantb.tripod.com/index.htm
second, follow his adventure day by day in http://communities.msn.com/EliteTraderUncensored/daytrading.msnw these threat will tell you all you want to know about day trading biz, good luck
Here my advice:
I really don't think you shoud trade live until you REALLY understand how the market move.
I suggest that you shoud read a lot of books about trading. Any book even it's very old book. Try to touch every aspect of trading. The most important part is psychology. The psychology behind the market move. And how the money act on you mind where you in the market.
The best way to learn is to look chart in REEL TIME. You shoud look a really fast market closely like 1 min chart. Just to get a feel how it move. Watch it for a few months and during that time you have time to read some books. I don't think you shoud invest until you really know what's going on.
When you feel ready. Start invest SMALL. You will notice that with reel money you behavior will change. That's the hardest part of learning. You have to learn how to manage you emotion when you in the market. Take it easy that's not easy. After awhile you will propably control that too. And ONLY after that you will be ready to trade bigger size.
Good luck.......
I really don't think you shoud trade live until you REALLY understand how the market move.
I suggest that you shoud read a lot of books about trading. Any book even it's very old book. Try to touch every aspect of trading. The most important part is psychology. The psychology behind the market move. And how the money act on you mind where you in the market.
The best way to learn is to look chart in REEL TIME. You shoud look a really fast market closely like 1 min chart. Just to get a feel how it move. Watch it for a few months and during that time you have time to read some books. I don't think you shoud invest until you really know what's going on.
When you feel ready. Start invest SMALL. You will notice that with reel money you behavior will change. That's the hardest part of learning. You have to learn how to manage you emotion when you in the market. Take it easy that's not easy. After awhile you will propably control that too. And ONLY after that you will be ready to trade bigger size.
Good luck.......
all i can say is WOW! your commentary is some of the BEST i have EVER read here! GREAT STUFF THERE MAN!
i agree painstaking bar by bar analysis is absolutely necessary imo. and that $100 dollar bill analogy is very very good at depicting much of the pertinent psychology of trading. much better than burning the $100.
i agree painstaking bar by bar analysis is absolutely necessary imo. and that $100 dollar bill analogy is very very good at depicting much of the pertinent psychology of trading. much better than burning the $100.
I never expected this much help guys, Thank you very much.
Im going to get some charting software, and just look at it for a couple months, (advice from someone in here).
Does anyone know a good one to buy, what site adress????
Thank you again
Im going to get some charting software, and just look at it for a couple months, (advice from someone in here).
Does anyone know a good one to buy, what site adress????
Thank you again