I've been trading for 7 months now and still...
- Thread starter cashmoney69
- Start date
He needs to be set up on a simulator (that is identical to live) acct in either cash or futures, then he can decide for himself what he feels more comfortable with.
I can create futures trades all day long in spot.
All I'd need to do is buy or sell a Lot, close off my computer for X-amount of time, then log into my acct.
I'll either be WAY down or WAY up.
What's the diff?
With spot, I can get in and out of trades on the pip by the Unit (not 100,000-units aka a "lot.").
But, he should try both... AND various brokers... determine what he's most comfortable with.
No easy, quick answers in either case.
cashmoney, don't be one of those who just fall into trading fx because of the apparently small capital requirements. There are implicitly far more edges to exploit in the hundreds of tradable vehicles in equities and etf's, vs the 4 or 5 liquid currency pairs -- that's pretty much a given.
I think it makes perfect sense to align one's acct cap to a market they can trade.
The spot FX market is highly tradable.
If one has a million-dollar acct, fine, kick 1000 shares back and forth in the stock exchange.
But on a 3000-dollar acct he can open a 1000-unit Long trade on AUD/JPY for $15 and draw interest around the clock, earning .75 cents a week!
In a year, that's $40. Plus the compounding effect may push it over $45.
That's not even opening/closing any other trades in profit for the year.
What's wrong with making 300% on money exposed to market for the year?
Not much.
Hell of a lot better than losing 6% in 7/mos.
fx
I agree with this.
First, congratulations on surviving. I forget which Wizard said it(hite?) You cant win if you dont bet. You cant bet if you lose all your chips.
You're treading water, which was better than my first 6 months. Heh.
You might be overtrading however. Not in share size(obviously) but in frequency. Commish is more of a factor than most realize.
Focus on your criteria. Fewer trades, better set ups. One thing that helped me was keeping a log. Nothing intense. Write down why you take a trade. Observe your observations. Try and throttle down your emotions. You may begin to see a pattern in your winners and losers.
Also I cant place enough importance on this: Find your true Budha nature. By that I dont mean chant OM in lotus position while trading. I mean find a style that suits your temperment.
Example. Look at JFK jr. For whatever reason he tried to fly in conditions he was NOT prepared for. He paid the ultimate price.
Pressure only becomes stress when you are not prepared for it. And if you prepare for it you can use it to your edge.
I cannot trade options. I can, but I dont have the time to learn ala a Riskarb level of understanding. If he and I were at Amex post making a market, who would have the advantage? Not me.
I also cannot trade mini ES. For whatever reason the tick size value and its jumpiness psychologically dismantles me even though spread is tight, and its deep. And yet, NQ has the same number of tick increments and I love that market. And ER2 and I are good friends. I dont like spreaded spreads, so even though I would love to trade Google, I dont bother. I know my true Budha nature.
Become market specific or technique specific. Example. Linda Bradford Raschke said something once about her Street Smarts book. She said you can trade ALL the techniques in handful of markets or you can trade couple techniques across all markets. But you cant trade every technique across all markets. Because they will contradict eventually and you'll be paralyzed from your analysis. Pick a time frame, a tactic, a market, a technique. Like a boxer. Focus on honing couple of combinations instead of trying to learn every martial art there is.
I am very uncomfortable holding stocks overnight, or 2-3 days except in my IRA account, which is a long haul type play. But I have no problem trading DAX or HSI.
Find a way to trade that allows you to sleep. Then its simply a matter of finding a technique. Or maybe reverse that
Finally, money management will make or break you. Eventually.
If you progress you will leave Scottrade. A carpenter cant hammer very well with a screwdriver. No offense.
First, congratulations on surviving. I forget which Wizard said it(hite?) You cant win if you dont bet. You cant bet if you lose all your chips.
You're treading water, which was better than my first 6 months. Heh.
You might be overtrading however. Not in share size(obviously) but in frequency. Commish is more of a factor than most realize.
Focus on your criteria. Fewer trades, better set ups. One thing that helped me was keeping a log. Nothing intense. Write down why you take a trade. Observe your observations. Try and throttle down your emotions. You may begin to see a pattern in your winners and losers.
Also I cant place enough importance on this: Find your true Budha nature. By that I dont mean chant OM in lotus position while trading. I mean find a style that suits your temperment.
Example. Look at JFK jr. For whatever reason he tried to fly in conditions he was NOT prepared for. He paid the ultimate price.
Pressure only becomes stress when you are not prepared for it. And if you prepare for it you can use it to your edge.
I cannot trade options. I can, but I dont have the time to learn ala a Riskarb level of understanding. If he and I were at Amex post making a market, who would have the advantage? Not me.
I also cannot trade mini ES. For whatever reason the tick size value and its jumpiness psychologically dismantles me even though spread is tight, and its deep. And yet, NQ has the same number of tick increments and I love that market. And ER2 and I are good friends. I dont like spreaded spreads, so even though I would love to trade Google, I dont bother. I know my true Budha nature.
Become market specific or technique specific. Example. Linda Bradford Raschke said something once about her Street Smarts book. She said you can trade ALL the techniques in handful of markets or you can trade couple techniques across all markets. But you cant trade every technique across all markets. Because they will contradict eventually and you'll be paralyzed from your analysis. Pick a time frame, a tactic, a market, a technique. Like a boxer. Focus on honing couple of combinations instead of trying to learn every martial art there is.
I am very uncomfortable holding stocks overnight, or 2-3 days except in my IRA account, which is a long haul type play. But I have no problem trading DAX or HSI.
Find a way to trade that allows you to sleep. Then its simply a matter of finding a technique. Or maybe reverse that
Finally, money management will make or break you. Eventually.
If you progress you will leave Scottrade. A carpenter cant hammer very well with a screwdriver. No offense.
This is not trading. This is just leveraged exposure to carry interest. What happens when AUD/JPY drops 800 pips in that same given year? The directional loss makes the interest earned look like peanuts. No different than holding onto a stock that pays 8% dividend but tanks 30% over the same time frame.
And please stop continually trying to mislead people with the illusionary term "money exposed to market" -- all gains and losses are expressed vs total capital, not maximized leverage when you win and total net when you lose. If you have 100K in an account, go long one ES contract and make 20 pts, you've earned $1K or 1% on the account; it's not considered a 50% gain just because it's 2k or so required to buy one contract.
illiquid is spot on sayin' that equities offer multiple egdes and allow u to take advantage of a urray of imbalances while givin' u the opportunity to diversify your strategies like no other mkt. currencies are interestin' and a good veihcle to add to your bottom line, but not reccomended as main instrument of choice for a beginner already strugglin' on equities with 1lot.
i think the more cash stay in the mkt the better the chance he's gonna make it...capital preservation main priority not just for the sake of the money 'emselves but also to mantain confidence and a healthy psychological balance.
i think the more cash stay in the mkt the better the chance he's gonna make it...capital preservation main priority not just for the sake of the money 'emselves but also to mantain confidence and a healthy psychological balance.
Actually if you're only trading 100 shares now you could trade for $1 each way at MB. $2 roundtrip beats the heck out of $14. Not sure how many trades you've made in 7 months but I suspect lower commissions would have you net positive. In addition you'd have Level II and T&S. Your current setup at Scottrade seems to be an impediment, adding to your challenges.
That's getting into trade dynamics, the which, some people we know... are unable to fathom and apply successfully.
If this is Nathan's case, he should not be losing his money in the market.
I'm not going to teach you how to trade, ILLy. Win 1000 EUR/USD trades in a row (open/close) first, then try to lecture me about trading.
I've always said, trading is not for everyone. Know anyone fitting that description?
Nathan, good luck with your decision.
I'm outa here.
FX