Newbie Trading Log

db,

i took your advice and dropped the number of shares and picked a few more stocks. This time i kept my stop losses at 2 - 3 %.

Heres what I have now:

AOL- buy at 10.79 Stop Loss - 10.00 90 shares
MXO- buy at 6.05 Stop loss - 5.45 150 shares
PD- buy at 36.51 Stop loss - 34.00 40 shares

Thanks for the advice.

And to the guy who said I dont have enough money. Guess what, If you never try you never will.
 
I don't know that you're adequately prepared for this, but if it's important to you to go ahead right now, at least take notes so that you can analyze your successes and your failures at a later date.

--Db
 
Quote from t0yland:

If i get positions so small even a a few point gain wont cover the 15 dollars it cost to buy/sell.
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You might consider opening an account at Interactive Brokers. Your 310 share order in and out would cost $6.20. Other places are cheaper than $15 as well (PointDirex, TradeStation).
 
Quote from dbphoenix:



As for the rest of it, resistance is around 11.25, not 10. Support is at 10. And the stop should not be placed at support, but just below. As to buying here, so close to the point where the price is likely to be turned back, that is a bad idea, regardless of what your indicators say.

--Db
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I disagree with you. Buying AOL here is just as good as buying it anywhere.

Who says the market cares for your support or resistance levels.

T0yland... dont ever listen to anyone in regards to making actual trading decisions... your trades are just as good as almost anybodys. The difference is that your risk management does not make any sense. You need to get more $ into you account.. trade much less size per a position. keep your stop %'s relative to the stocks volaility and your holding duration... and find a cheaper broker.


--MIKE
 
Quote from Trend Fader:

Who says the market cares for your support or resistance levels.

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The market couldn't care less, but those who bought at 10 and sold at 11 might.

--Db
 
Since you can get $1 per 100 shares at other brokers, you can easily trade 100 share lots without the commission eating you up.

The less you have, the more risk you can take. The more you have, the less you should risk. If you have $1 million then don't put it all in one position. With $3500, who really cares. If that is your life savings, I apologize.

You may want to look into option spreads. Instead of buying AOL, buy a (March) 10 call, sell a 12.5 call for $90. Or buy the call outright for $100. Built in stop loss..
 
You can open an account at IB and only pay 1 penny a share ($1 min) for each of most of the trades you are likely to do. That's about $1 in and $1 out = 2 bucks total. Compare that to $15 in and $15 out, $30 total. Ouch! At least with small size (say 100 shs) and deep discount rates (say $2 in and out) you have a chance to exit your stock with a profit once it gains > 2 cents a share vs a 30 cent hurdle with your current broker.

You are liable to have so many "break-even" or small gain trades that will turn out to be losers not because of your trade ideas but because of this commission hurdle. It's significant in your case. Also - you will be much more at ease only having to overcome/deal with a $1 commission (given the 100 shs example above).

When I think of what you might do with 'diversifying' into 3 stocks at this small account size and this commission hurdle it makes me shudder to know that getting in will cost you $45 and out again another $45. That's $84 that effectively acts as a front-load hurdle to you plans that doesn't need to be there.

The other advice given prior to my post is very valuable as well and mine isn't the most important. They are all good thoughts.

Good luck in your quest,

- David
 
Also ... Do you know about the Pattern Day Trader rules? If not you had better read up and learn about them ASAP or else you will get burned when you your broker calls you up to tell you about them. With less than $25K in your account there are restrictions about how many trades you can do in the same stock in a day over a period of days. Do a search for PDT or Pattern Day Trader on this site or call and ask your broker about it. It could put a halt to your trading plans just as you are 4 or 5 days into trading.

- David
 
Screw IB, if you're swing trading small or large amounts of stocks get an account at www.Freetrade.com. 25 free trades per month market or limit and no per share charge. Their fills are quick and very competitve. After I got an account there I dumped Scottrade.

Never even considered IB because they charge big time once you get over 1000 shares and I don't do futures.
 
Quote from David I:

Also ... Do you know about the Pattern Day Trader rules? If not you had better read up and learn about them ASAP or else you will get burned when you your broker calls you up to tell you about them. With less than $25K in your account there are restrictions about how many trades you can do in the same stock in a day over a period of days. Do a search for PDT or Pattern Day Trader on this site or call and ask your broker about it. It could put a halt to your trading plans just as you are 4 or 5 days into trading.

- David
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Actually, it is not about whether the daytrade positions are the same stock or not - PDT = maximum of 3 Daytrades within a 5 day period - daytrade defined as open & close the position the same day. If it is carried overnight it doesn't count towards the total of 3.

The best advice here so far is to switch brokerage accounts - you need IB (or if you can come up with $10K, Tradestation - which is 1.2 cents per share but they have decent customer service for new traders - IB for experienced only IMO)

One advantage to IB is that it won't let you make more than three daytrades in a non-PDT account - the software tracks it in the account section.

One thing is for sure - the commissions you are paying will very most likely prevent you from making any money even if by some miracle you skip the learning curve/tuition most of us have paid.

Good Luck,

Paul
 
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