How big account size should you start with and how to build it up?

[Louis Winthorpe]

With LS Trader, you can set stops with a dollar value not a percentage. With the newest version, we have added new reference points. We now offer to set the stops through the:

bid
ask
primary bid
primary ask
primary last
prev close
position price (Average for today)
position cost basis (Average since you started the position)

Bob

Thanks Bob. Stupid question but what is the difference between the bid & ask and the primary bid and primary ask?

 

[Robert Morse]

Not stupid. The bid ask looks at the best from all the exchanges and ecns in the data base. The primary is the exchange where they symbol is listed. Eg GE is NYSE and AAPL is NASDAQ.

 

[Louis Winthorpe]

Not stupid. The bid ask looks at the best from all the exchanges and ecns in the data base. The primary is the exchange where they symbol is listed. Eg GE is NYSE and AAPL is NASDAQ.

So this links into a hot key question in LS I have. I've noticed that a user can either select his/her preferred ECN (i.e. ARCA, EDGX etc.) or Primary Market. In an attempt to answer this question myself, would I be right in saying that if routing fees are the priority then nominate your preferred ECN. If speed of execution is a priority, select Primary Market. Right?

 

[Robert Morse]

For stop orders, I would use a custom order and ‘“STOP” in the routing choice. This will route your order to one of the EDGE markets where the order is held serverside vs on your PC. The choice of your trigger is a personal choice and does not effect speed. I would use Bid or ask. You should not make cost the main priority with a stop as a bad or no execution will have a higher cost.

With other order types, I suggest using LSPT during regular trading hours for taking liquidity and NASDAQ before and after for taking and anytime for adding. I like NASDAQ better than ARCA because they have no extra re-routing fee, if your order needs to be sent to another ECN to be filled.

If you have a sales person on your account with us, your should discuss this with them

 

[smallfil]

Smallfil, bit of a stupid newbie question but is there a shortcut way to calculating this on the fly without getting a calculator out (I actually have an Excel calculator which works fairly well).

Alternatively, it would great if there was a custom hot key I could set up in Lightspeed which could allow me to place trades and set a STOP based on a 2% risk profile. Calling @Robert Morse from Lightspeed . I guess the closest one can get to this is setting a 10c or 20c STOP, right?

You have to figure it out for each stock as each stock is different. Your risk on a trade would vary on the stock even assuming the same setup. Let us just say, you trade pullbacks. The risk of that trade being your entry price minus the stop loss price. Say your entry is $20.00 and your stop loss being at $18.00, so, your trade risk is $2.00. Your 2% of your $3,000.00 capital is $60.00 then, the number of shares you would buy is $60.00/$2.00 = 30 shares @$20.00. So that trade costs you $600.00 plus the cost of commission.

 

[fx$esm23]

A few thoughts:

1. Always try to save as much as possible.
2. Pay off all high interest debt before beginning investing.
3. Start small. As others have said, your first goal should be not losing money. Only scale up when you have demonstrated months of consistent profitability. You're not missing out on much by starting small. If you have a small account, then even if you are able to generate a large return, it probably won't be that much money compared to working. So focus on increasing income in other areas while you trade. Be patient. But keep at it with small positions.
4. If you trade options, it's easier to make money selling vs. buying. Check out tastytrade.com for some ideas.

Valuable advice

 

[Buckey]

When it was my 18th birthday and I was finally legally allowed to have a funded account, after waiting and practising and learning for years (I felt that I was ready before, of course, but I probably wasn't, really ... and my father had resisted all my attempts to persuade him to open a mini-account in his name with one of his debit-cards, for me to trade).

Sounds cute, brought me a big smile.

 

[Kate_Wal108]

A few thoughts:

1. Always try to save as much as possible.
2. Pay off all high interest debt before beginning investing.
3. Start small. As others have said, your first goal should be not losing money. Only scale up when you have demonstrated months of consistent profitability. You're not missing out on much by starting small. If you have a small account, then even if you are able to generate a large return, it probably won't be that much money compared to working. So focus on increasing income in other areas while you trade. Be patient. But keep at it with small positions.
4. If you trade options, it's easier to make money selling vs. buying. Check out tastytrade.com for some ideas.

Thanks for sharing this!