Help for yet another newbie

S

stockjedi

Hi all,

Brand new to the board here, just joined today and started reading. I think I need a couple months to read the wealth of information on this site, but I'll get there.

Until then let me cut to the chase:

Started trading stock in the late 90s just because I was so fascinated by Wall Street. Didn't know anything of course, but got pretty lucky. Been working in the IT field for 15 years so I always had a good flair for certain companies/products in my field and made some good calls (it was tough not to make money on the market for sure).
Started with a $1k E*Trade account in 98 and within 6 months was up to $200k and of course got greedy, didn't know the rules, didn't know I was supposed to take profit along the way etc etc..anyway lost most of it (about 80% loss). I was so frightened and pissed off at myself that I stayed away from 2001 until 2005. But I love trading so I was reading and watching on the sidelines and finally after reading books, articles, websites, forums etc I decided I would give it another try. After all people in the late 90's had called me "stockjedi" so I had to give it another try, right?? :D Basically told myself I would start with a limited amount of cash again ($1k) and trade slowly, carefully and stick with the trading rules. So I did start in 2006 and made very few trades but took out the profit every time! Now I'm on a roll again and have turned my little $2-3k from 2006 into $10k as of today.
I make a great living in IT (6 figures), but honestly I love trading, making my own money, not dealing with stupid company politics etc and the freedom that it brings me.

My goal is to take 2-3 years until I'm a full time trader. I know it can be done and I really believe I can do it. I have tested myself and am over the greed and emotions. I still have a million things to learn of course, I'm nowhere near some of you guys know about technical analysis, finance etc but I have a really good understanding of certain stocks in my industry and how they move. My first goal is to start making $200-300 a day on a steady basis until I can move up to $500-600 a day in a couple years. Do you guys think I'm crazy for dreaming of this? I'm willing to put in the effort, I'm beyond driven and am the kind of person who will work 120 hours a week and go home to study until 3am if needed so I'm not scared or lazy. And I'm not expecting to make millions of $$ overnight either.
I'm talking about averaging 2.5% a week after one or two years.
Do you have any advice for me on what to trade besides my current few stocks that I like? Should I stay with Nasdaq for day trading or move over to NYSE etc? What are some of the stocks professional day traders love to trade?
Any feedback, help, links, suggestions, etc would be more than greatly appreciated! Sorry about the novel and thanks for reading this.

Stockjedi
 
$200-300 a day is a great target to be shooting for. If you think about it, if you can maintain 200-300 a day then your yearly income is gonna be already pretty huge.


Best of luck.
 
Quote from TudorJones:

1) How did you lose 80% of
$200,000 ?
More...

Yes, please elaborate. No one's going to beat you up too bad, if at all.

Also, if you're making over 100M per year, as you are now, you are accustomed to that income. Therefore, I think you need a large account if you're going to trade. Have that accumulated before jumping out of the job. I'm a wealth manager, and urge you to find some on-line calculators that will point out how much $ you need to invest based on your risk profile to get you to an account size you'll need. My guess is you'll be a little shocked at how high the numbers will be if you want to maintain a 100M per year lifestyle. However, if you want to live on 50M/year, that's going to be easier to take those numbers. If you can get access, you may want to run monte carlo simulations. Straight line appreciation is is 70% accurate hitting a money goal. That's a big difference over the 95% probability of monte carlo simulation. Good luck!
 
Quote from showyouwang:

$200-300 a day is a great target to be shooting for. If you think about it, if you can maintain 200-300 a day then your yearly income is gonna be already pretty huge.


Best of luck.
More...

Thanks I'm shooting fairly low to start, again I don't want to be greedy. If I have a great day and make $500 that's fine, but my goal is the $200-300 per day.
I will not quit my day job until I can prove to myself that I can sustain $500-600 a day for 12 months straight.
 
Quote from TudorJones:

1) How did you lose 80% of $200,000 ?
More...

To make a long story short, bought some stock that turned my original $1k investment into $6k, then used the $6k to buy another stock which turned into $40k, then I took the whole $40k and put it into 2 different stocks which took me up to almost $200k. Since I was a stupid newbie I thought that's how the stock market works and just keeps going up forever. Never took any profit out and when the market crash happened it all went down overnight almost, I tried to sell whatever I could so I ended up taking $35-40k out at the end.
It was a tough lesson to learn but I guess it will only help me in the long run. As I said, I have already started rebuilding and doing pretty good so far. I read a lot of trading books and understand now that there is nothing wrong with taking profits off the table.
I just proved to myself I can do the past couple weeks by turning my little $3k play money into $7k+ as of yesterday. And yes I have sold and taken the profit! :)
 
Quote from dwitherell:

Yes, please elaborate. No one's going to beat you up too bad, if at all.

Also, if you're making over 100M per year, as you are now, you are accustomed to that income. Therefore, I think you need a large account if you're going to trade. Have that accumulated before jumping out of the job. I'm a wealth manager, and urge you to find some on-line calculators that will point out how much $ you need to invest based on your risk profile to get you to an account size you'll need. My guess is you'll be a little shocked at how high the numbers will be if you want to maintain a 100M per year lifestyle. However, if you want to live on 50M/year, that's going to be easier to take those numbers. If you can get access, you may want to run monte carlo simulations. Straight line appreciation is is 70% accurate hitting a money goal. That's a big difference over the 95% probability of monte carlo simulation. Good luck!
More...

dwitherell:

Please go ahead and beat me up, I need it badly! ;)
I understand your point about the 100M income lifestyle. I'm looking at investing $50-100k in the market either day trading or swing trading and making $3k per week in 2-3 years.
I'm just trying to figure out what would best fit my style, day trading or swing trading. As of right now I consider myself a swing trader as I usually hold a stock 2-3 days before I sell. But with everything I read about scalping, I think there's much more money to be made that way (one of my close friends does that), but I'm not sure if I can do it. Can you tell me more about the monte carlo simulation please?

Thanks again everyone.
 
There's no way you're going to pull $3,000 per week, each year in income with $100,000 in the markets. You are going go need a lot more for that kind of an income goal.
 
Quote from dwitherell:

There's no way you're going to pull $3,000 per week, each year in income with $100,000 in the markets. You are going go need a lot more for that kind of an income goal.
More...

Can you give me an idea of how much I would need?
 
I disagree, it depends on your strategy. I knew a woman who did about that much (3000+) a week, using swing trading techniques and holding each for 2-3 days on breakout plays.

She used a gray box though to find her trades based on her indicators, which cuts down a lot on research time.

You can squeeze some extra money out of every trade too if you use options along with just pure long-short.
 
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