More advice needed!!!! Yes its that time of the month!

S

Splat

Hi There,

I have fell into SW development (C++/Windows in case you are interested!) almost by accident after doing my PhD in Physics and have been working now in this business for the last 7-8 yrs.

Currently, I am working in a large company that specialises (amongst other things) in providing tools to investment banks to manage their investment risk. I get a reasonable salary $70K which I know is not great - the environment I work in great, relaxed - no pressures whatsoever, easy work etc...

However I dont want to do this job forever - and lets face it, I'm not getting any younger! I am very interested in trading, more specifically, day trading. I have been reading books on technical analysis and feel that this is something I want to get into! I know that I can be good and succeed since I learn things very quickly. I also know there are great pressures but then there are also great rewards too!

Since I live in the UK eventually when and if I start trading i am thinking that I have a slight advantage in that I can come home and trade on Nasdaq or NYSE from 3:30pm GMT (10am EST) - yes you might be wondering but I can do flexitime where I work and do say 7am to 3pm work hours :)

I can raise $30-40k to start trading and if I really become successful then I can sell a house that I have currently on rent to raise additional capital.

There must be other people here who have been in the same boat - maybe even from the UK. I am looking for advice on the best way to proceed. I dont have that much practical experience but I have done some paper trading. More specifically can what I proposed work?

Regards,

Splat
 
One more question if I may - I would like to get into good
old fashioned stocks initially and maybe get into trading futures
later. What do you reckon?
 
IMO, you should take advantage of this opportunity to leave at 3pm and start trading the US markets, at least until you get profitable.
As everyone, you will have to pay your dues before attaining any level of profitability.
Some can get profitable in a few months, others a few years but some will never get profitable.
It would not be wise to assume that you can be a profitable trader and leave your job.

As for intraday trading, it technically works in the same way than
short term trading (excpet for scalping and l2/tape/CO stuff).
It could be a better way to get started.

It is usefull to be proficient on both stocks and futures (and other derivatives, BTW).
You should prefer stocks if you are more a technician and fully dedicated to intraday trading.
You should prefer futures if you have great mathematics skills and can elaborate money-management strategies (mandatory in the futures business).

Good luck anyway :)


C2
 
Find a broker who charges commissions that are cents/share with no minimums (or really low min like $1 US). The $15 flat fee commissions will kill you. http://www.interactivebrokers.com/ is popular for their .01/share comm

Read the thread summary from the Day Trading Fundamentals thread on http://www.siliconinvestor.com/ - click StockTalk and Short Term Traders. Most of the basics are there - they are the foundation that will at least allow you to lose money slowly.

Go very, very slowly. Make 1 or 2 good trades a day and evaluate the heck out of them.

Don't quit your day job for a long time.

Don't believe a guru, regardless of what they seem like. If you have to have a guru, Vadym on realitytrader.com is the only one I have not seen complaints against (also Alan on hardrightedge.com - he is mostly a swing trader) PLEASE do not believe David Nassar of Market Wise Stock Trading School.

Most books on trading will not help you that much, other than to reinforce the basics that can be learned for free.

Be humble, be able to laugh at yourself. You will probably fail even if you do all of this, statistically speaking, but best wishes regardless.
 
Originally posted by dayetrader76
If you have to have a guru, Vadym on realitytrader.com...
More...

Can I humbly withdraw myself from the gurus?... :)
Honestly, I've grown to hate this word applied to trading. We at RT use it mostly to mock those that call the bottoms and tops until they get it right, or predict market direction in confident voice or hype their good calls to no end while conviniently muting bad ones or... well, you know the type.

Really want to remain a trader :)

Best regards,

Vad
 
Splat,

Go for it. Your background in physics will be very helpful. I know that other strongly disagree with this, but I consider trading a game of statistics and with a good scientific background there is much less risk that you'll get tricked by systems or methodologies that don't really have any statistical edge, even though it may appear that they do.

That being said, it's probably going to be a lot harder than you think! It's definitely took me longer to get profitable on intra day time frames than I thought it would.

With a background in Physics, you may find the following book interesting:
http://www.amazon.com/exec/obidos/A...4935/sr=8-2/ref=sr_8_23_2/103-0287526-2504637

I doubt it will help you become a better trader, but it's an interesting read, and not that difficult.
 
C2C/dayetrader76:
Thanks for really useful info - appreciate it.

wwatson1:
The UK market is not crap. But there doesnt seem to
be any flexibility here to trade as in the US. For instance
I have not come across any (I am sure there must be)
DA brokerages - it seems that here in the UK as with
most other things these kinds of things are virtual monopolies
with one or two main suppliers. For instance I have not
come across many companies that do real time data - the ones
that do charge through the roof! It is much cheaper to get a
feed from the US. Believe me I have looked around - a friend
from work also has been looking around for a while too.
Infact most people seem to trade using the normal
internet broker (thro web browser type interface) these
days anyway.
There used to be a company here called mytrack who also used
to charge a lot - yet their US counterparts didnt charge as much.
How bizarre is that?

Regards,

Splat
 
Splat,

Don't quit your job. Simple!


You can be profitable trading but it is like a business , You will find that you are putting alot of time , effort and money into it with no return , plus you will be losing money , and your savings will be slowly eroding through living expenses. This will be very frustrating for you . plus you need a minimum of 25k in your account to daytrade , so really to be able to take losses comfortably i will say you will need about 40k . You said you live in the UK ( i hope it is not london as the living expenses there can kill you) Forget those things that you read about daytrading and the high returns in those books they are mostly false(BS ) . if you read enough stuff on this website you will notice that alot of people are struggling . A 6 figure return a year has now become a big deal. you probaly will not see any returns for months . Imagine this , you will trade the whole day and make $6 and will be praised by others that you are doing well .
 
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