New Trader

J

Jayhawk2003

A little about me....I'm a recent college graduate (23 years old), and I have a full-time job with an engineering firm. I have never invested money in the market before, and I admit my knowledge is limited. I have a little more than $11,000 to start with. I have opened an account with Interactive Brokers.....got the idea here.....but I'm yet to place a trade. Basically, I'm going to sit on my cash until I have a better understanding of the markets. Though I consider myself reasonably intelligent, I realize the learning curve is likely to last years.

Since I have a full-time job, I will not be able to watch the market all day so I think a swing approach would be the most logical course to take. I'm looking for a website that takes the same approach....not one that is necessarily spitting out pick after pick....but rather a service that is more of a "teaching" resource. If anyone can offer any advise, I would be more than grateful.

This is off subject, but it seems this site would be improved if it had a "Review Section" on other investment sites.....not just books, brokers, and software though they are all very helpful......particulary for the newbies like myself.

Thanks for your time, and I appreciate any advise I might get. Hopefully, I'll be able to contribute to the board though it's not likely to be anytime soon :)
 
Welcome to Wall Street,

I would take it real slow and not to look at the "Get Rich" quick attitude. You may want to add your email to the site below. They do free lessons also every week, charting, t/a indicators etc.

Get a feel of market stick to your stronger based comapnies at first, IBM, MSFT, GE etc

Learn whatever you can first before putting your cards on the table. Best of Luck!
 
this is what you need.. if you want an educational service go to www.realitytrader.com.. go to the position room.. also, i suggest getting Alan Farleys book "The Swing Trader".. and check out his website at www.hardrightedge.com..

90% of the information out there about trading the markets will lead a newbie around in circles.. those two sites will point you in the right direction..

-qwik
 
Jayhawk,

A good starting point would be tosubscribe to Investors Daily, go through their website everyday adn read Willaim O'Neil's book, which I believe they give you as a new subscriber. The hardrightedge site has a lot of good educational material as well.

The three most important things to learn as a newbie are (1)understanding what the trend of the market is and trading with it, (2) understanding diversification, position sizing and risk management and (3) understanding what time frame you are trading on.

Also, you must learn that trading is a probabilistic enterprise, not that different from gambling at a craps table. Even the best methods are only right maybe 50-60% of the time and many of the most profitable are right more like 40% of the time. So you can't get in love with a trade or a stock. They are just pieces of paper, but they can take a real big bite out of you if you let them.
 
Either of Mark Douglas' books will suffice. Pick a method. 2bottoms, 2tops or retracements to 34 or 20 ema in longer time frames. $11,000 longer term trades. Smaller stakes. Key is come up with a good trade management plan. Like when to sell or move up to breakeven stop. Then repeat often. Cheers Steve

PS Or just get one of the great elite traders to trade for you.
 
ok, don't take another step......remember the game 'frogger'? you know, the game where you had to jump from log to log while all kinds of things tried to take you out. did you ever win by just jumping like crazy across the screen? maybe in the first level, but as things got harder.....ya know. ok here's the trick, after all the suggestions and advice and lessons you'll learn....if you can afford to not trade real money at first, DON'T. you have a job, and even if you don't want to work there and want to be a trader for a living, you're gonna have to have some source of income while your learning. if you can stick around long enough, you'll learn enough about yourself and the market to possibly swing it. good luck!!!

my suggestions on books.....farley's master swing trader, douglas' trading in the zone, zen in the art of archery, and for fun....reminiscenes of a stock operator, and market wizards....

remember, patience young frog hopper. :)
 
Jayhawk,

I agree with everything said here so far and I'll give you one further suggestion: close your IB account until you're ready. I'm very serious. It takes no time at all to wipe out an $11 000 account, like spending a dollar at the corner store.

The reason I make this recommendation is that over 90% of traders fail -- it's a fact, trading is exceedingly difficult. By not having an account you won't have the temptation to put on a trade. What I suggest you do is papertrade until you've reached one month of consistent profitability (you might be surprised just how long this could take you). There are boatloads and boatloads of information that you will need to learn about the markets and yourself before you can start trading and it's all too easy to fall prey to a "surefire" system with real hard-earned cash. Check out nqoos.com for his "steps to becoming a profitable trader."

There are many on this board who will argue that papertrading is nothing like real trading and it doesn't teach you anything. Well, it's not like real trading but it's pretty darn close and it will teach you a lot. If you want to make it closer to the real thing then add 30% to your losses and subtract 30% from your wins. This will "realworld-ify" your results. Sound horrible? You have no idea how horrible until you lose all your money and you're no closer to being a trader than when you started. Take it from someone who's been where you are now.

--opm8
 
The very best thing you can do is take part of your funds and purchase a good software package for backtesting before you begin trading anything. I recommend Investor RT because it is fully functional, yet fairly easy to learn.

Backtesting will help you to learn for yourself, in a safe environment, what is likely to work, and what doesn't. You'll be spending your time learning, and not your money. And if you can't make money by simulating a trading system in the past, you certainly will not be able to make money going forward.
 
Quote from opm8:

Jayhawk,

There are many on this board who will argue that papertrading is nothing like real trading and it doesn't teach you anything. Well, it's not like real trading but it's pretty darn close and it will teach you a lot. If you want to make it closer to the real thing then add 30% to your losses and subtract 30% from your wins. This will "realworld-ify" your results. Sound horrible? You have no idea how horrible until you lose all your money and you're no closer to being a trader than when you started. Take it from someone who's been where you are now.

--opm8
More...

I totally agree with opm8 on his point to add an additional -30% to losses and to take 30% away from winners. So if by paper trading, you made a successful $3.00 swing trade, mark it down as only making $2.10. This way you won't be shocked when you trade for real and the emotions come in that make you take your profits early and let your losers run. Remember that it's all part of the learning curve when you trade for real.

Paper trading/backtesting will give you an idea if your strategy and system works in theory. Actual trading will tell you if you can implement it. No point in trading for real and risk losing money if your strategy is faulty. Take it in stride. Good strategy first, then good execution.

DNAJ65000
 
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