Papertrading, simulation, education, and progress. (Also, an introduction)

L

Loxley

Hello, all.

I am new to all of this. Before now, my only brush with daytrading was a guy I sat next to at a restraunt who I overheard discussing his networking woes back in 1997. "Oh, that sounds neat," I thought. "It's too bad that I'm just a poor college student, and am more interested in computers than in finance, and I come from a blue-collar background anyway."

Now I've graduated from college, and consider myself lucky to be earning right at 500 bucks a week... after long stints of unemployment in this hideous economy (I'm an MIS graduate... databases and programming are my forte... I've always liked puzzles and problem solving).

I no longer have any faith left whatsoever in the study hard so you can get a good job method of getting ahead. There are too many good people who are even smarter than me who's lives are crumbling due to layoffs and underemployment.

I made a go at doing computer consulting, and made good money at it... for a while, before the economy went to pieces... and I was only doing THAT until the company would "buy me a ring and make an honest man out of me" and make me a REAL employee. Never happened, and now I owe the IRS a few THOUSAND bucks. Sheesh.

So, I was looking for something that I am capable of doing that will make me money and I won't be at the mercy of people who can decide they don't need my services.

It was looking like a tossup between crime and market gardening for extra income, when I remembered someting about "Day Traders" I'd heard. A quick Google search showed that yes, they still exist, but apparently the same "reality check" happened to them as happened to me and my fellow information professionals.

Reality Check. That's a good term for it, I think. Anyway.

I went to the Memphis library and checked out Nasser's "Made Easy" book, Friedfertig's "Electronic Day Trader", Chris Farrell's "Survival Guide", and for perspective Ingerbertsen's "Guts and Glory of Daytrading" and Anuff&Wolf's "Dumb Money." I'm currently devouring these books.

Already I am learning things have changed. Decimals? No shorting stocks from brokerage accounts of less than 25K? Doubtless the software has changed as well as the governing rules of the exchanges since the books I'm reading were written. There are probably also other resources out there as well that are more up to date.

My only goal is to make around 500 bucks a week doing trades. Since I have no stake at the moment, I'm going to throw 1 week's pay (500 bucks) a month into an account until it reaches tradable levels. In the meantime, I want to papertrade and work with simulators so I can learn what's really going on. I won't mind taking a 2% loss or whatever as long as it leaves me alive to trade another day. I'm not trying to get insanely wealthy... just supplement my income somehow.

What shoudl my stake be? Can y'all give me any advice on how to papertrade, learn, run simulations, what software is currently the thing to use, and other things that have changed since the "fad books" were written?

I've been reading the forum archives. I have no ego left to speak of after everything that's happened to me.

Loxley
 
Quote from Loxley:

Hello, all.

I am new to all of this. Before now, my only brush with daytrading was a guy I sat next to at a restraunt who I overheard discussing his networking woes back in 1997. "Oh, that sounds neat," I thought. "It's too bad that I'm just a poor college student, and am more interested in computers than in finance, and I come from a blue-collar background anyway."

Now I've graduated from college, and consider myself lucky to be earning right at 500 bucks a week... after long stints of unemployment in this hideous economy (I'm an MIS graduate... databases and programming are my forte... I've always liked puzzles and problem solving).

I no longer have any faith left whatsoever in the study hard so you can get a good job method of getting ahead. There are too many good people who are even smarter than me who's lives are crumbling due to layoffs and underemployment.

I made a go at doing computer consulting, and made good money at it... for a while, before the economy went to pieces... and I was only doing THAT until the company would "buy me a ring and make an honest man out of me" and make me a REAL employee. Never happened, and now I owe the IRS a few THOUSAND bucks. Sheesh.

So, I was looking for something that I am capable of doing that will make me money and I won't be at the mercy of people who can decide they don't need my services.

It was looking like a tossup between crime and market gardening for extra income, when I remembered someting about "Day Traders" I'd heard. A quick Google search showed that yes, they still exist, but apparently the same "reality check" happened to them as happened to me and my fellow information professionals.

Reality Check. That's a good term for it, I think. Anyway.

I went to the Memphis library and checked out Nasser's "Made Easy" book, Friedfertig's "Electronic Day Trader", Chris Farrell's "Survival Guide", and for perspective Ingerbertsen's "Guts and Glory of Daytrading" and Anuff&Wolf's "Dumb Money." I'm currently devouring these books.

Already I am learning things have changed. Decimals? No shorting stocks from brokerage accounts of less than 25K? Doubtless the software has changed as well as the governing rules of the exchanges since the books I'm reading were written. There are probably also other resources out there as well that are more up to date.

My only goal is to make around 500 bucks a week doing trades. Since I have no stake at the moment, I'm going to throw 1 week's pay (500 bucks) a month into an account until it reaches tradable levels. In the meantime, I want to papertrade and work with simulators so I can learn what's really going on. I won't mind taking a 2% loss or whatever as long as it leaves me alive to trade another day. I'm not trying to get insanely wealthy... just supplement my income somehow.

What shoudl my stake be? Can y'all give me any advice on how to papertrade, learn, run simulations, what software is currently the thing to use, and other things that have changed since the "fad books" were written?

I've been reading the forum archives. I have no ego left to speak of after everything that's happened to me.

Loxley
More...

Take a serious look at the e-mini futures. You will be analyzing one chart and there is plenty of action for all your needs.

Once you are ready to start trading, you will only need $2,000 to open an account. Obviously there are serious risks involved, and make sure you understand them before trading with real $$.

Also, be sure to attend one of the Money Shows, or Online Trading Expos. I would have saved a lot of money if I had attended one of these events early in my career.

Remember, it will probably take you about 3-5 years to really experience some success. That's the way it is for most people.

Cheers,

kp
 
I don't mind waiting 3-5 years for success... as long as I can avoid devestating failure in the meantime.

I'll look up E-minis and "Money Shows".
 
quote from abishiai :

Once you are ready to start trading, you will only need $2,000 to open an account. Obviously there are serious risks involved, and make sure you understand them before trading with real $$.
More...

C'mon this guy won't have a chance with only 2 grand in his account. There is something called a "learning curve" and the tuition for learning to trade is quite expensive.

I guarantee you that you'll need much more than 2 grand in your account. :D
 
I to graduated with a degree in MIS and have spent the last 2.5 years working at Verizon . Since I was fortunate to have a good paying job and low living expenses, I banked about 40% of my take home pay. I have been trading for about 2 years and I am down about 8% from when I started. The past 6 months have been somewhat of a turnaround for my trading. Here are some of the reasons why:

1. I only trade SPY on the 5 minute chart (150 share positions until I become consistent. Why learn with 1000 shrs if I can learn cheaper with 150 shares?)

2. While my system is not completely mechanical, I only have 3 scenarios that will allow me to enter trade.

My point is that when I first started trading, I was to concerned with making money and trying just about every method in that pursuit. Once I simplified my approach and focused on learning to execute my system flawlessly rather than making money, I started making money.

The 2 books by Mark Douglas also really helped me understand why most traders fail and how not to be one of them.

good luck
 
Don't pay much attention to all the naysayers, trading is like every other thing in life, if you want to do it you can do it. Do it on paper at first, until you feel you can do it. Could take weeks to get to that point or could take years. You will definitely pay some dues at some point, if losses mount up then you have to go back to the drawing board and get on with plan B. Finding the best software is going to be a struggle, you can't really find out the differences between them without trialing them and some experience. Everybody has an opinion about software, most opinions are worth what you pay for them. I have Tradestation2000, if you are a computer nerd then you can do a lot with it, in fact I have never been unable to code a strategy in it and I have some pretty complex strategies, multi-timeframes updating tick by tick using a combination of indicators, some written by myself, etc. A shrewd buyer can get a copy of it cheap since it is two generations old. Make sure to get the documentation, the tutorials are a real education. Metastock is a little less powerful in the programming language department, wealth lab gets touted all over the place but I can't stand the guys getting on Tradestation lists and trying to sell WealthLab so I never bothered to look at it yet, I did notice that the scripts use more code to do the same tasks in Tradestation. Excel/VBA is definitely in my toolbox. You could read Technical Analysis of Stocks and Commodities and Active Trader magazines to get an idea where the herd is going. Good luck, you will need some of that too!! Keep your daytime job for a while!! Learn to relax!! Get a hobby!! Score some tranquilizers!! Just kidding.

Max
 
abishiai,

While I've enjoyed the money shows that I've attended; it appears that you got more out of them than I did. I did, however, learn to develop a healthy distrust and disblief for vendors who promise the "stock market dream" for others while not being able to fulfil it for themselves. I'd be interested to know what you got of the money shows you attended.

Richard
 
Quote from rickty:

abishiai,

While I've enjoyed the money shows that I've attended; it appears that you got more out of them than I did. I did, however, learn to develop a healthy distrust and disblief for vendors who promise the "stock market dream" for others while not being able to fulfil it for themselves. I'd be interested to know what you got of the money shows you attended.

Richard
More...

A RealTick T-shirt.
 
Quote from rickty:

abishiai,

While I've enjoyed the money shows that I've attended; it appears that you got more out of them than I did. I did, however, learn to develop a healthy distrust and disblief for vendors who promise the "stock market dream" for others while not being able to fulfil it for themselves. I'd be interested to know what you got of the money shows you attended.

Richard
More...

Yes, obviously one must look at vendors who promise the world with skepticism. I am certain that if I had attended one of these shows early in my trading career, I would have made much better choices in the types of education I chose to invest in.

Until I attended the Online Trading Expo, I didn't E-mini futures existed, I thought the Random Walk was Gospel Truth, and I had no idea of the existence of ET (as well as alot of other things). Just walking around the exhibit hall gave me a good idea of where I wanted to go as a trader.

Consequently, I feel that anyone who has very limited knowledge of trading would greatly benefit from one of these events.

Also, you can pick-up a few free t-shirts.

Prosper!

kp
 
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