Newb to trading, a little help with the basics long post

Quote from Steve Tvardek:

Whoa, yes you certainly are new to the game. I am just going to add a few things from my experience that may be of some help.
First off, it is of the utmost importance that you lose your short bias. Believe me, when the market is weak, shorts are fantastic but when you get the reversals or the market is strong, you wont be able to trade and may even take bad trades because of your bias. Learn to love the long side just as you do the short side and trade according to what the market tells you.
Also, stocks beclow $10 are usually much less volitile than stocks over $10. I trade a lot of $70 and higher stocks are believe me, the intraday swings on them are much greater than the cheap stocks.
As far as the $500 you lost, yes thats a lot of money to you relatively speaking, but in the world of trading its a very small sum to lose. Think of how much money is out there to be made and that will put a meager $500 loss into perspective. You will, most likely take bigger losses in your trading career and thats just part of the game. Its a marathon, not a sprint. But if you keep to a solid trading plan, you should be able to overcome.
Anyways, good luck to you. If you think trading is what you really want to do, and that there is nothing else in the world that would make you happier than being a full time trader, then I suggest looking into going prop. If you arent 100% commited and arent 100% passionate about the markets, then I suggest getting a 9-5 and trading on the side.
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I agree completely with losing your short bias. You should be comfortable with going in whatever direction the market tells you to go.

From my experience, I think it is a better idea to trade your money first on your own before going prop. Working prop is a good experience, but is better in my view once you have some trading experience behind you.
 
murry aluded to swing trading as probably being an easier gig to get into at this time. I agree. Also good points by Steve to lose the short bias.

9-5 trading possibilities: Swing trading with EOD (end of day) data. Swing trading futs. Forex. May want to check around here as well to see what time some of the foreign index futs trade (DAX, FTSE, STOXX, etc.) they seem to move and many american traders like them.

Holding index futs like the ES overnight can be pretty volitile though, for a newbie. I trade ES but dont hold overnight, mostly because margin gets alot steeper then. Forex is a market I am just getting into w/ holding overnight....markets are truly always open, w/ a mini account you can trade w/ a 10,000 lot....very forgiving if you honor your stops. However, bear in mind, w/ many FX dealers....if the american exchanges were like betting on Vegas boxing, FX is betting on a cockfight in some farmer's barn.... so research your broker. However, many people, including myself, think its a great market.

Again, def. try to get a 9-5 job, but study and research trading like crazy. It is much easier to learn trading like that. Learning trading like is much better. W/ a steady income, perhaps in a few years you'll find you've parlayed your initial stake into alot of money, and be ready to try fulltime w/ confidence.
 
Quote from John47:

Probably the most important...asking if you should trade fulltime 9-5 or get a job when you graduate.....DEFINITLEY do not trade fulltime!!!
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Quote from roberk:


And a good sign too- the more new blood the better.
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:D
 
jomama

Your young enjoy the money and don’t lose it to the market. You have people like me and others on here that spend are life stealing 20 cents off your trade. I think you have the right idea on how to trade but not the right amount of time. Losing 500 is nothing and losing 7k is nothing either. I say take that 7k and spent in on a hot girl for the summer. It will be the best sex and best investment in your future.
 
Hmmm...I guess looking at end of day data and swing trading could be the right path to maintain both a dayjob and trading. I have a feeling that will involve a lot more risk %-wise than what I am used to. I'm more comfortable with small consistent gains where I close my position at the largest loss of 1% and largest gain of 1% rather than losing 5% here and gaining 8% there.

I agree with several of your guys' opinions on conserving my cash. Though of course I'd be hesitant to throw 7K at a girl for a summer of fun (a joke I know) I think it would be smart to try to find a method of trading that would conserve my cash over the long haul. The worst thing would be to lose it all quickly without being able to enjoy the game as long as I could. Well on second thought I guess even worse would be to continually feed money into an account and continually lose it. Right now the deal with my relative is that if I go $1000 below what I started with (7000) I have to pull out.

I am wondering about the talk a few people have mentioned about "trading how the market tells you" etc... Don't you guys worry that you won't be completely objective and let some emotion seep in? How do you prevent this? Jedi mind tricks? It could cause inconsistency with trading, where if presented with the same case on two different days, your human judgement could lead to two different entry and exit points. I tend to just look at the numbers only, and if they fit my criteria I trade, and if not I don't.

It seems when I try to do what I THINK the market is telling me to, it's just a game where I have a 50% chance of winning, and over time the 50% that I lose slowly slips from my memory. And if at the end of the month I'm 60-70% a winner I'd feel like I was a "good trader" that month and when probability evens itself out the next few months I'll have had a "cold streak".
 
""""Quote""""What I've learned so far (what else should I learn? any tips?):
1) Be a robot, picking the right stock to short is a lot easier than knowing when to cover. So always have a set point where you are going to buy to cover. One unforeseen problem I had was I focused SO MUCH on picking the right short stock that I completely ignored when to cover.
2) Never trade anything below $9-10, unless you are able to stomach the intraday swings.
3) Don't think about how much you could have made if you had bought to cover earlier or later, you'll rarely do it perfectly.
4) Don't be greedy, stick with a preset gameplan as human tendencies are the traders enemy.
5) Only risk how much you can lose, and never think about the money. If you trade because you care about the money it'll cloud your mind and you will do things you normally wouldn't (hold over night).
6) Waiting twice a week for that perfect situation to short is usually a lot better than trading many inferior stocks that don't fit a criteria perfectly just because you feel you "need to trade"
7) Have someone hold you accountable, a method you might be trying may only seem to work on paper because you WANT to believe it works.
8) Don't trade before 10:30 EST, it's too volatile and you'll never get your price.
9) If you can trade without staring at the chart all day, go ahead and let your stops take care of it, just make sure your position is closed at the end of the day.""""QUOTE""""




All these fundamentals are great, but they mean nothing in reality. There is so much more to learn from the sounds of it, so please, don’t be anxious to get into trading. I know just how you feel right now, I use to be the same way (Student also) but you must always think to your self "I have a lot more to learn" Just because you made a couple bucks on Ameritrade does not mean you are capable to trade for a living.

Here is my advice, take it or not.... Finish school; learn bit by bit while in school. When you’re done school, find a career you love (NOT TRADING) Then keep learning while you work. The market is NOT GOING anywhere.

The other route you can take is not the ideal plan, but if you will not listen to anyone regarding the difficulty of this business, then when you are done school, work in a prop firm, or try trading remote. But please DO NOT trade anything you cannot live with out. If it does not work out, then face it; you are just not cut out for a career in day trading. Who care's, you can still have a good career, and also trade on the side for a little extra money, and fun :)

Hope this helps
-Kastro_316
 
I just don’t think you can trade with 7k. I just have a few years in this business and I found it quite challenging so I just think you are going to piss your hard earned money away. I watch the market minute by minute and it’s hard to guess what might happen next most of the time. I will give you an example of the only trade I made today. I sold a stock short at open. I made 50 cents on the 2k shares in a few minutes. The stock went down another 2 bucks from there since I got out. I had to take my profit because it opened up a buck and half higher so you would think it might be a strong stock for the day and could spread up and I would make nothing. I think that was my first trade in a week because I am so unmotivated with how hard the market has become during earnings season. I make an ok living from trading but nothing amazing at all. The only reason I make a living is because I stand in front of bullets and have a knack for getting out fast if I’m wrong. The smart safe trade would be to let the stock open and then make your move. The problem is once the stock opens it’s next to impossible to get a low risk short trade on. I am mad I left 4k on the table but I learned to not second guess my risk management and I just accept it. So I just find it hard to believe you’re going to make money putting orders in the day before because if that worked everybody would be rich. So I wish you the best in your join my world but once I take your money I won’t give it back. Hey a few thousand bucks or a pretty girl well I think the pretty girl is the smarter move because you won’t make that few thousand bucks anyway. I know I can make a living trading because I do it but I see so many people who can’t so a young kid like you should enjoy his money and not give it to us. If you do trade just remember the best trade is sometimes no trade at all. Make the trade come to you and never chase the trade.
 
Go for it now!

Yeah, wait until you're married and have your kids' tutions to worry about, or mortgage and car payments to make. Your responsibilities are only going to increase as you get older. Try explaining to your wife that your quitting your job because you want to trade full-time. I know selling your parents this dream is tough, but convincing your better half will prove far more challenging.

Let me tell you, I tried for years to get a real job "on a desk". Now I am 28 and qualified as an assistant to fill orders, and I have a Series 7, 63, 55, etc. BIG DEAL! None of this helps me trade better.

I got sick of the corporate and ass-kissing BS(not to mention sell-side model is becoming extinct) and I finally took the plunge into prop trading at the start of the new year. I got crushed today(trading futures), and believe me, I feel a hell of lot more pressure to succeed now than I would have right out of school.

Anyway, you sound like a smart and intelligent kid. So unless you are graduating from a top 10 biz school, or plan on taking your CFA, I would def go into trading if you have the opportunity. GOOD LUCK!
 
I'm in a similar situation, but I think tbomb's advice is definitely solid - probably because I share his opinion. I'll write more later, or PM me.
 
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