How do I start?
- Thread starter birchy
- Start date
I can share my experience with Scottrade - they have decent service for INVESTING but they are lousy for TRADING - they are not a Direct Access Broker - they are a Market Making Conventional Brokerage (I called and asked them if they are MM) - this means that the fills you get are based on whatever benefits them, not you - if you are looking for .20 to .30 gains per share, the slippage and poor execution time will kill you.
Their trades tend to execute in minutes instead of in seconds, especially short sales, which have to be "approved" by their proprietary trading (even a very liquid stock like QQQ or MSFT) desk before even becoming a marketeable order.
Unlike IB, Tradestation, Real Tick, MB, Terra Nova, etc. (see reviews posted on this site) when you hit the "buy" button you are really just sending them an e-mail to their prop-trading desk asking them to place a trade for you, as opposed to having your order price posted directly to the markets.
Their limit and stop orders have to be placed a minimum of .25 above or below the current inside bid/ask - so between this and the poor fill time this platform doesn't work well for daytrading.
Their quotes/charts are good enough for overnight swing/position trading but that's all.
However, this is a great broker to keep an IRA or other longer term investment account with because they have great customer service and no inactivity fees and you can actually get a live human when you call without hardly ever waiting on hold.
Just my experience and opinions, I don't work for any brokerage.
Paul
The MOST important question, IMO, is : Do you have a plan?
Since your time is limited, swing trading is a more practical strategy than day-trading for you. Regardless..... Do you have a concrete method of entering and exiting trades that you could describe in a few sentences? Does your method give you an edge/positive expectancy? If your answer is no, (or you don't know) do yourself a favor and go away....and don't come back until you do.
Not trying to be rude, just trying to save you some $$$ and some stomach lining.
If you plan on daytrading, with totally discretionary entries & exits
you will need to make this your full time job. And even then, expect to take months before you start to make any money, if ever.
My advice: try to develop some concrete method, a roadmap to the top of the mountain, to use a metaphor from an earlier post.
Paper trade it for a few months. Then, start trading it with 100-lots (assuming you are talking equities, here...not futures!)
To just open an account and start trading with no plan, is like walking into the jungle at night with no map, no guide, and no experience. Expect to wind up as someone's dinner.
Since your time is limited, swing trading is a more practical strategy than day-trading for you. Regardless..... Do you have a concrete method of entering and exiting trades that you could describe in a few sentences? Does your method give you an edge/positive expectancy? If your answer is no, (or you don't know) do yourself a favor and go away....and don't come back until you do.
Not trying to be rude, just trying to save you some $$$ and some stomach lining.
If you plan on daytrading, with totally discretionary entries & exits
you will need to make this your full time job. And even then, expect to take months before you start to make any money, if ever.
My advice: try to develop some concrete method, a roadmap to the top of the mountain, to use a metaphor from an earlier post.
Paper trade it for a few months. Then, start trading it with 100-lots (assuming you are talking equities, here...not futures!)
To just open an account and start trading with no plan, is like walking into the jungle at night with no map, no guide, and no experience. Expect to wind up as someone's dinner.
First, "thanks!" for all the great info, it should get me throught the first onion layer a lot faster.
Second, a basic question: are short positions for futures or margins or are they possible with simple accounts (assume IB as the broker). I'm still trying to wrap my mind around how this works, all I know so far is that you sell what you don't own, and then buy it, the difference being added or taken from your account. Is there good URL that I can visit?
Third, I appreciate the warnings and will definately think long and hard and try to be responsible as I can about preparation, if I continue. To help me get a better handle on the risks/obstacles, let me describe my previous experience and request others to pass judgement on how it affects my chances at success with day trading:
I woke up to the reality of being able to manipuate the funds in my wife's retirement account at the end of the boom. All her co-workers were buying the company stock (TXN) and the price was going up forever. So we got on the bandwagen, I had her go from a balanced position to all TXN at about $85, it peaked about $90, and then the crash. We weren't even aware of what was going on until about halfway down the slide, months later.
Since then, I've been learning and getting more interested. I discovered that I was able to move funds once a day, price based on the closing price. I guess I became a swing trader, using Yahoo charts to watch and moving the entire balance back and forth between the bond fund and the volatile TXN. By Aug 15 of last year, the account was back up to $6k. I got caught long on Sept 11th, and lost 28% bottoming out about the 21st. I sat and waited for the hysterics to die and then resumed swing trading. By mid March of this year, I added 50% (adjusted to remove the affect of cash additions from my wife's employment, but not factoring in the increased buying power they provided). In the last six months, I've lost about a grand twice and recovered twice. I don't have to adjust those numbers, she left that employer in March. Much of my two dips this summer can be blamed on anticipating a recovery and discounting the long term trend line.
So now I'll open it up to the "you think you've been there, but you haven't seen squat" crowd, to provide some perspective. 'Cause my limited experience indicates that despite my ignorance, and the .com crash and Sept 11th, I've done ok. 50% annual return for this last year is a whole lot better than it would have done parked in the balanced funds. I know that there are worse circumstances to trade through, and the retirement account doesn't charge me to move funds, but I'm happy I've done more than break even.
If day trading doesn't work, maybe I'll try the same swing techniques I use with the retirement funds. (And yes, I know I need to stop subjecting the retirement account to high risk, it's starting to accumulate enough value to protect.)
As for a plan, I would start with this (but continue to learn whatever I can): Using long positions and basic trending, short holds of a few minutes to an hour or two, mosting in the mid-to-late morning of the trading day. Working with one primary and a few other AMEX stocks which I will get to know well. Try to not be exposed when earnings are announced that are likely to affect, or other known general events that are likely to affect (I sat out Wednesday, with the SEC's CEO/CFO deadline issue on the table.) I presume that this approach will not be successful at first, based on what I've heard so far, but it might take me to the next onion layer, and if I still have funds to play with, I'll re-evaluate. If I don't, enjoy my money!
I only began placing daytrades for a couple of months and am probably just breaking even.Im not in the green yet (portfolio wise) but i started in the markets (buy & hold) in sept 2000.
I have been studying the About the markets, technical analysis, ect., since sept 2000 As i Knew absolutely Nothing about it. What got me interested was my Annuity became a self directed fund. well it took me over a year to realize that Buy & hold Could be a very long investment. I Started looking at the stocks i owned and started trying to find a short term move (swing Trading) and although i was still losing I was able to Capture some gains on the way down. To cost average down The Buy & Hold for Life's
Just something i Heard & listened to But never followed and till this day have problems with Is: Risk management!
Set your stops
Use a chart to find a a stop location and stick to it or use a % rule or point rule.
especially when daytrading!
As far as Brokers go
Ib I think has a min # trades per month
You have to look at data & Minimums But if your really serious and want cheap commissions IB is the way to go
Datek has 9.99 commissions on a 100 sh trade thats .20 roundtrip just to break even on 1000 Its .02
I have been studying the About the markets, technical analysis, ect., since sept 2000 As i Knew absolutely Nothing about it. What got me interested was my Annuity became a self directed fund. well it took me over a year to realize that Buy & hold Could be a very long investment. I Started looking at the stocks i owned and started trying to find a short term move (swing Trading) and although i was still losing I was able to Capture some gains on the way down. To cost average down The Buy & Hold for Life's
Just something i Heard & listened to But never followed and till this day have problems with Is: Risk management!
Set your stops
Use a chart to find a a stop location and stick to it or use a % rule or point rule.
especially when daytrading!
As far as Brokers go
Ib I think has a min # trades per month
You have to look at data & Minimums But if your really serious and want cheap commissions IB is the way to go
Datek has 9.99 commissions on a 100 sh trade thats .20 roundtrip just to break even on 1000 Its .02
Hey, what kind of advice is that? Who is he supposed to keep losing to? Let me guess.. you???
The advice I would give is to learn before you start. Then you don't necessarily have to be losing as much to learn. Given the abundance of information and the ability to check almost everything before putting real $ into it, I don't see why someone should pay this "tuition". GG, just because you started trading at what...21 and got into without much idea of what it was about, kept losing before you did, etc - doesn't mean that's the optimal (or even reasonable) path.
Birchy - learn all you can, check, double-check and re-check to see what you plan to do really will work and only then start. Otherwise you will try running without knowing how to walk.
It might not have been possible to do this a while ago, but currently you can learn almost all the "lessons" without paying for them the way GG suggests. If you are impatient to get started and/or think you know all you need to know, you might as well follow his advice.
Good Luck.
V.
Originally posted by vladiator
Hey, what kind of advice is that? Who is he supposed to keep losing to? Let me guess.. you???
GG, just because you started trading at what...21 and got into without much idea of what it was about, kept losing before you did, etc - doesn't mean that's the optimal (or even reasonable) path.
Birchy - learn all you can, check, double-check and re-check to see what you plan to do really will work and only then start. Otherwise you will try running without knowing how to walk.
It might not have been possible to do this a while ago, but currently you can learn almost all the "lessons" without paying for them the way GG suggests. If you are impatient to get started and/or think you know all you need to know, you might as well follow his advice.
Good Luck.
V.
Uhm,
Vladiator, do you trade? Believe me, there is NO way to learn to trade except to trade. You can have sex too without having done it before, but you'll probably cum in 30 seconds. Try having sex for a living and cuming in 30 seconds...
Is that sex ? It would certainly "simulate" as sex in your computer.
nitro
Nitro, yes, I do trade. And, thank God, it's been what I expected. The strategy I came up with (before investing a dime into trading) performs exactly as it was expected to. I did modify it a little bit once I started trading, but getting back to your creative comparison, it's more like figuring out that you need an extra pillow under the chick's butt. What was advised to birchy before was to go get laid before really knowing what it was about. Of course one would suck at it the first time. I lost my virginity when I was sixteen. By then I knew almost all there was to know about it. The girl I lost it with wouldn't have guessed it was the first time had I not told her (she was quite experienced at 18...). Did I learn knew tricks since then? You bet. But compared to all the knowledge of it I had at 16 (quite a while ago), it is only 1 or 2 % more. (Sometimes I even feel I knew more back then...
) And I did have many occasions to learn.Some people might prefer getting into smth, sucking at it first and learning as they go. For me, if it's smth you care about doing right (or smth that would be costly to do wrong), it's best to be as prepared as you can before getting into it.
The only thing that there's no way to know before you start trading is what fills you will be getting. Other info is pretty much available. I only trade monster capitalization stocks and given the liquidity they have, the small deviations from what I expected aren't a big deal. Besides, I already had an allowance built into the strategy for it before I started - the strategy assumed I'd be buying at the ask and selling at the bid. So in reality, once I started trading for real, I was pleasantly surprised by how infrequently I actually had to pay the spread....
Originally posted by vladiator
Nitro, yes, I do trade. And, thank God, it's been what I expected. The strategy I came up with (before investing a dime into trading) performs exactly as it was expected to. I did modify it a little bit once I started trading, but getting back to your creative comparison, it's more like figuring out that you need an extra pillow under the chick's butt. What was advised to birchy before was to go get laid before really knowing what it was about. Of course one would suck at it the first time. I lost my virginity when I was sixteen. By then I knew almost all there was to know about it. The girl I lost it with wouldn't have guessed it was the first time had I not told her (she was quite experienced at 18...). Did I learn knew tricks since then? You bet. But compared to all the knowledge of it I had at 16 (quite a while ago), it is only 1 or 2 % more. (Sometimes I even feel I knew more back then...
Mine is longer.
I would think the question is not whether or not you have to pay the spread, but how to know when to pay it.