How to shut out emotions- my 3rd day

Hi stockoptionist,

thanks for the advice concerning IB. Have a stock & options account with them since March 2000. They are probably among the best in terms of commissions and execution when it comes to options-trading.

For what concerns overnight holdings - I stand to my point that it's mainly a matter of careful stockselection. If one trades the most volatile issues and doesn't care much about FOMC meetings, earnings-releases of major bigcaps and so on - you're right. This can be a deadly game.

Real trends on the other hand do emerge only when the majority of traders / investors decide to stay with their position rather than jumping in and out every day. So a trader who's jumping on a serious trend ( with a trend, I don't mean a 3 day up or down-trend ) has the odds on his side, that this trend will prevail - at least for a while.

Good trends do not reverse out of the blue - there are always signs of an upcoming reversal couple of days, if not weeks in advance. Than it's time to leave the party.

Unless, of course, some idiot decides to fly a passenger-jet into a skyscraper or does other silly things with a comparable impact.

To exaggurate a bit :
I'd say, Warren Buffet made more money with overnight holdings than all daytraders together ;-)
 
FWIW it seems that this has developed into a thread which could be very useful to future-newbies (not to mention 'sophomores' like me!)...but would be easier to find if it was under the Trading classification instead of 'Industry News'

P.S. Babak: Captain Kirk NOT= William Shatner :D

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excellent posts by Privateer and others...
 
Guys, guys...

Lets calm the spirits! Que, I dont recall offending you or anything and If someone deleted your posts It sure wasnt me. Wareagle has mailed me explaining the situation It may be that I posted a thread in the wrong forum (THX for the kick in the B*** Voodoo ;))
or something so you put me on your "blacklist" in your mind.

I really didnt do anything, in fact I only heard about you now. Let us keep our professionalism and calm and keep discussing in a civilised manner.

Good trading Que!
Alex

P.S. Of course Im in the game for the money but not primarily NOW because I understand that It took you guys like years to do it so why should I do it in weeks? Preservation sounds OK to me for now-and- if anyone knows how to move this thread into belonging forum id be thankful
 
Originally posted by Que
elitetrader there seems to be a problem, EVERY single time I post something it gets wiped now wat is that all about??...
More...

Only disparaging posts and wildly off topic rants get deleted.

Originally posted by Que
WarEagle "If you don't have anything of value to contribute, then don't." & what you said in your post was contributing. [/B]
More...

Wareagle is the moderator, so it's his job.
 
Neo:

Do you have a trading plan? By that i mean, do you have a specific set-up, with an entry trigger. Followed by a money management plan? Is it written down?

Looking at some of your picks, it occurred to me that maybe you don't, as i did not recognize any repeated commonality among the charts.

If you are just starting to trade, my advise would be, to pick just one set-up, paper trade it to assure that you have a positive expectancy, and then trade it cautiously at first.

As you get adept at trading this set-up, then look to add others. You have enough to work on (execution skills, psychology, money management, stock selection) without complicating your life with a bunch of set-ups!

On money management, i too have a small (under 25K) account that i swing trade. I size my position so that my maximum risk is 0.5% of equity per trade, and i usually risk no more than 0.25%. The gains are slow in coming in actual dollars, but this way i assure that i will be around to play tomorrow.

regards/greg
 
Neo..

There is no way a new trader is not going to get excited, angry and every other possible emotion. I don't care how many books you read the first few hundred trades are going to arouse your emotions. Dont worry about it. It's part of the process.:)
 
@neo_hr
Well, I disagree a bit with some of the other statements - but just a bit ;) - also I have to say that I'm not that experienced in trading - so it's just my personal observation - maybe I'm just lucky ... so don't take it as a suggestion ...

btw, great to have another trader from Europe on the board - I'm from Vienna/Austria - do you also speak german ?

I had been an invstor for many years until I started trading - thought it was easy mony, but it wasn't (what a surprise) - so I started kind of "swingtrading" (at least I thought it would be swingtrading) - and lost a lot of money - that's not the fault of swingtrading but my own fault alone !

But - as a swingtrader you will have to use wider stops - I now use swingtrading-strategies and try to time my entry exactly (using L2, ...) - and also use very tight stops - "The right plays work right away" someone said (I think it's one of the Market Wizards but I'm not sure) - so from that point on I at least do not lose a lot of money any more ...

Regarding papertrading - I do not think that comes even near reality - the shorter the time-frame the more it will be unrealistic - so if you are told to swing-trade with real money and papertrade shorter time-frame daytrading I do not think if that's the best way. I use IB and trade very small positions (why not trade 100 shares of a 10$-stock). I try never to risk more than $25 on one trade (on the 10x$100 trade it would be a maximum (!) of about $12.5) - often I use even tighter stops - and for me it works.

assumptions:
- I do not know how experienced you are but you should have at least more experience than some weeks to trade with real money
- you have a plan and the discipline to stick with it
- you can afford to lose the money to risk - if you need it desperately you will not have the right mental attitude to trade

Then if there would be more than 10-20 losing trades I would have lost $250-$500 - and then I have to take my plan and think about that it might be a bad strategy - and perhaps change some points ...

I never lose money that I can' afford to lose - that's the most important point. But on the other hand I think the only way to learn daytrading is to daytrade (and I have read a lot of books about trading).

So personally I would not again swing trade with real money and papertrade a shorter time-frame - because if you are wrong (and you will be in the beginning) you will se it later when using wider stops - and losing more money.

I do not hink that you can apply a longer term strytegy (like CANSLIM) woithout working hard on it - maybe as hard as working for learning daytrading - and if that's the goal you sould stick to it. I also think that it doesn't have to be a disadvante to trade with a small account - I don't know about execution speed on IB with an order over 10 shares - but personally I would do rather that than paper trade on one hand and work hard for a longer term strategy like CANSLIM on the othet hand (if my goal is to daytrade and do not that kind of long-term investments in the future)

The biggest problem I think is the 25k rule - I think a lot of people take a loan and then trade with it - big mistake in my opinion !

If someone disagrees - just tell it - as I have said, compared to some members here I'm just a newbie.

Harry
 
Hello Harry,

another fellow european trader - greetings.

I think, Alex (NEO ) will speak for himself - but with reference to your proposal concerning daytrading vs. swing-trading :

Neo's account size is 4K - and he has an account with IB.

With 4K - daytrading is not possible anymore under the new regulations, unless you trade options, or - as from spring 2002 on , single stock futures.

4K would be even to little money to trade any futures contracts.

So in reality, Neo's trading-options are rather limited and the only ST trading strategy left is a kind of swing or momentum trading.

Otherwise, he would have to stick with some longerterm strategies until his account size is large enough for daytrading ( min. 25K USD - as you may know )

Other than that, he could think of using a Multi Currency Margin Account with IB and start trading European and many US stocks intraday -

There's no 25 K rule for stocks trading on European exchanges or any other limitations in the number of Intraday trades.

About 200 of the most highly liquid US stocks can be traded on XETRA ( IBIS ) via IB Multicurrency account - in EUR.
( S&P 100 + Nasdaq 100 Stocks ) - Segment is called US Stars :

http://deutsche-boerse.com/usstars/index_e.htm

Several marketmakers make sure, there's enough liquidity !

Spreads are, of course, somewhat higher as in the US , but during US Markethours, the difference is comparably low.

IB's commissions for trading European stocks or US stocks listed on IBIS / XETRA are , compared to european standards, absolutely the lowest.

IB asks 0.1% of the trade-value, min. 4 EURO per trade.

The next cheapest european broker is Fimatex - asking 0.19% of the trade value and / or a minimum of 8.- EURO / trade

So if Alex is really in for intradaytrading, this could be an interesting option.

regards
 
Hallo Harry and Privateer,

Yes Harry I am from Croatia, Europe (if you ever come to Croatia for a holiday, call!). As Privateer said I understand my options concerning my acct size and all, so I decided to give it a shot in swingtrading.

Looks like my main problems are emotions for now (guess Ill learn to cope with that) and PICKING THE RIGHT STOCKS: I have been unable to find any good advice on how to find them. I understand that everyone who has succeeded doesn't want to give his/hers lifes work away just like that.

I tried TradingMarkets free scanner ; 50day vol - above 250000 (it's in 00); price up to 35$ ; ADX >20 ; RS (12 mo, 6 mo, 3 mo) 90 or 95 and no stocks came up.

Then I tried lowering the criteria (no RS, no ADX and still no results??), I mean can it be that no stocks trade above 500 000 shares per day and are in an uptrend?

Anyway, Thank you for thoughts, would like to have like 20 or 30 those slower movers from NYSE (another problem, IB wont allow less then 100 shares nyse), big caps and work my way from there.

Good trading today,
Alex

P.S. Ja, Ich kann Deutsch aber nicht so gut als Englisch und alle sind Amerikanisch so dass wir Englisch sprechen sollten :cool:
 
Hello Neo

why not trying out the links to scanners I posted yesterday.

It's no big secret into finding uptrending stocks.

You could start with :

just looking for those which recently made a new 52 week high ( say 3 or 5 days ago ) . A new 52 week high is not achievable without some kind of uptrend or ?
If you don't have a scanning program, than just build a watchlist of the daily new 52 week highs and monitor these stocks for a couple of days - in order to spot a good entry on a weak day.

Other ways to find strongly uptrending stocks :
Scan for stocks showing a RSI of > 75 - 80, trading above their 50 day EMA + trading above their 13 day EMA.

Or, if you prefer ADX etc :
look for ADX > 30 and +DMI > - DMI these stocks are certainly in a kind of strong uptrend.

For downtrending stocks, just reverse these parameters. Add your personal preferences for price-level and avg. daily volume and that's it.

You'll get a list of candidates on no time.

Webbased scanners are often enough limited in their customization options.( Marketscreen is a good exemption )

Therefore, I use a PC based software ( QP2 ) for these tasks - but there's really no secret in those setups - thousands of investors and traders do this everyday.

You could also have a look at Investors Business Daily website. There you can find stocks with high growth potential ( Canslim )

http://www.investors.com/

A very simple, combined fundamental / technical approach is, to buy Stocks which have a high EPS rating ( earnings per share ), which are in strong industrygroup or sector, and a high growth-potential relative to the broader market, when their their 17day EMA crosses up through their 50 day EMA, while volume is increasing. You can find those stocks easily with QP2 or other combined screeners / scanners.

There are so many possibilities to find trending stocks....
 
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