New Trader tired of breaking even - Help!

D

Deb Trader

Hello Traders!

Well, I feel that I've learned so much in the last few months of studying and trading, but then I come to this forum and feel like I don't know much at all. I get up at 6:30 with the market, trade and study until 6:00 at night. And I'm still not making money!

So far, I've been using Ameritrade to do my trading. Plus using their "Advanced Analyzer" for stock screening and their "Streamer" for Level II, streaming quotes, and mini-charts.

I started by reading Toni Turner's "Beginner's Guide to Short Term Trading," and Value Stock guides, plus some TA reference books. My favorite TA is Stochastics, but I also use RSI. My interest has been in penny stocks or value stocks, because I'm wishing I could find the ones that double or triple in value. So far, no luck.

I generally buy 10 stocks at a time with Stops set fairly close and hope that some of them will go up. After losing 1/3 of my investment funds within the 1st few months, I seem to be holding steady - not really losing or gaining overall.

I have $22,000 to work with and want to make a living with it. Is that an unreasonable expectation? I would love to hear suggestions! I haven't set up a margin account, so haven't done any short selling yet. Maybe that is my problem.

I don't know much about e-minis or futures. Haven't read those chapters yet. What is your opinion of them?

Also, I'm looking for a trading mentor in the San Francisco area. (Martinez is my hometown). Does anyone know how to find a good local mentor?

Any information you have would be greatly appreciated. Thanks so much!

- Deb Trader
 
I'm sure you're going to get a lot of replies, and there's an awful lot to address here, so I'll just make two comments.

The first is that looking at "value" stocks is not likely to get you anywhere in terms of trading. Value stocks require time for traders/investors to discover their "value". If you're interested in trading, it's not likely you're going to want to hold onto them long enough for the payoff, if there ever is one.

The second is your use of "wishing" and "hoping". Wishing and hoping aren't going to get you very far either. Rather than wish and hope, develop a specific trading plan, follow it, and see what the results are. Those results should depend on the quality of your plan and your discipline in following it, not on wishes and hopes.

--Db
 
You'd better pay a service. I don't trade stocks at the moment so I can't advise my service, but I can send you by email a service that has a very great percentage of good records and high win/loss ratio (most who propose high/win loss ratio has poor percentage). The price of this service is 150$ if I remember well.

If you have real problems with stops I know another service which only costs 2$ per month and that makes 60% per year with no losing trades.

Quote from Deb Trader:

Hello Traders!


- Deb Trader
More...
 
Deb,

Welcome to trading. Can you make a living on a $22k account? No. Can you grow it to a size where you eventually can make a living? Yes. What are your chances of doing this? It's generally accepted that 90%+ of beginning traders fail.

My advice: Forget the penny stocks and value stocks. The penny stocks are manipulated and carry too big a spread to daytrade. Value stocks take too long to move. I haven't read Toni Hansen's book, but 99% of books will not help you. Ditto chat rooms, guru's, seminars, etc. Stochastics look cool but are almost totally useless. Same for RSI.

Realize that this is not a hobby. Plenty of well-capitalized, experienced pro's are out there and only too willing to take your money.

First, you need to be able to short. Next, you need to decide what is a timeframe you are comfortable with. That time frame will dictate your approach. Next learn how to protect yourself against big losses. Your capital is like your blood, lose too much of it and life ceases. Learn the basic rules: cut losses short, let profits run, exit when you can not when you have to, never let a profit go to a loss.

Understnad that short term trading is not about fundamentals but about psychology. Learn to read the trend of the market and trade only in that direction. Learn to spot patterns. Learn how to spot intraday support and resistance. Learn one pattern and make it your bread and butter. Maybe it's a gap opening, or a reversal bar. Learn everything you can about that pattern and trade it exclusively.

If you want to daytrade, you could do worse than going back and rereading all Seanote's old trading journals and putting up charts of his trades. Good luck.
 
Thanks for your feedback on value stocks.

Yeah, I shouldn't have used the terms "wish" and "hope". I actually put a lot more analysis into it than it may have sounded.

- Deb Trader
 
The problem is ... it can take him a very long time and he can lose twice his capital before he knows how NOT to lose. It is isn't me that says that in fact but John Hill of futures truth in Stock & Commodities magazine:

"If you want to survive, you have to have good risk management. I tell people that the learning curve to become a profitable trader will cost you somewhere in the neighborhood of $50000. You will more than likely lose $50000 before you learn how NOT to lose." -
I can assure you that it is not exagerated. that's what I lost myself when I began (but I began at a time when there wasn't Internet and all lot of information, I think I wouldn't lost so much if I began today because I would be aware of technical analysis and money management) . And of course statistically it can be less or more.
I never really trade stocks during 7 years so I can't really speak for stocks.


That's why my advice to pay a service. After that you will have taken good habits and then you can trade by yourself. But if you lose your trading capital one or twice you could be out of the game definitely.


You can also buy a system. there is even free system like quantum. But I think it is better to take a service because you will be guided for execution. Good execution is crucial and can even make the difference between win and loss for some style of trading like scalping.

Quote from AAAintheBeltway:

Deb,

First, you need to be able to short. Next, you need to decide what is a timeframe you are comfortable with. That time frame will dictate your approach. Next learn how to protect yourself against big losses. Your capital is like your blood, lose too much of it and life ceases. Learn the basic rules: cut losses short, let profits run, exit when you can not when you have to, never let a profit go to a loss.

Understnad that short term trading is not about fundamentals but about psychology. Learn to read the trend of the market and trade only in that direction. Learn to spot patterns. Learn how to spot intraday support and resistance. Learn one pattern and make it your bread and butter. Maybe it's a gap opening, or a reversal bar. Learn everything you can about that pattern and trade it exclusively.

If you want to daytrade, you could do worse than going back and rereading all Seanote's old trading journals and putting up charts of his trades. Good luck.
More...
 
Quote from AAAintheBeltway:

Deb,

never let a profit go to a loss.
More...


As usual great advise from Triple A.....My question is what do you consider a profit that shouldnt be let go into a loss????

not really knowing your time frame, here is a question for ya.

lets say you enter long @ 25 with a stop @ 24.50 target @ 26...If the stock runs to 25.35 ( after entry )and starts to head down from there ( maybe just a pullback or a reverse ). Would you get out at entry price or let it hit your stop????? or do you trail???
 
$22,000 is too little, so clearly you need to do more than break even, if nothing else to get your stake higher. Saying that, if you can beak even consistantly early in your trading carreer that is a good sign. Also, with a track record of not losing money it will be easier to join a sub llc if you choose. You need to fine tune your style/system just a little bit to become profitable.
 
Hello Deb and welcome to ET.

I know that most people do not want to hear this, but you are supposed to break even for awhile. It is part of the process. Probably the most frustrating part, but still part of it never the less. Even after you have been trading for several years, you will come back and visist breakeven and losing periods, its part of the business.

One of the very best things you can do is keep a journal. In that write down every trade you take, why did you take it, how did it turn out, where did you get out, why? Anything you can think of. Study your losers in any free time you can get, you will probably find a pattern to them and your journal will turn out to be your greatest educational tool and mentor.

If you have gotten to breakeven by yourself, avoid newsletters and chatrooms etc. You will do better to be a trader and live by your own choices. If you feel there are things you need to brush up on, then purhaps a service would be appropriate for you, but dont just go for stock tips. You will never be a trader if you do that.

I would also say that $22,000 in a trading account is probably not enough to live on in San Fransisco. You might want to consider futures just due to the PD rule, but brush up a bit more with stocks. Given that you have 22K and don't have a margin account and you hold multiple positions at the same time, I would guess you are swing or position trading. If this is what suites you, then keep doing that.

Good luck.

Brandon
 
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