Everybody in this day and age needs some kind of software or at least a web site to help them find opportunities. Some want to be long, so they should look for stocks in uptrends, thats all.
Playing the market Long-Only.
- Thread starter EMini-Player
- Start date
Thanks for all the info guys!
def
Sponsor
Options are decaying assets and if someone doesn't have enough capital to get past the PDT rules and needs to ask questions about how options work, they probably won't last very long. You can day trade options but the spreads alone make that very difficult.
Single Stock Futures: You are not restiricted by PDT rules, you get more margin/leverage on them and can short at will. Spreads seem to be about 4 cents which are larger than the underlying but not bad at all considering stocks traded in .125 increments only a short time ago. There are a number of market makers making markets so there is plenty of liquidity and executions are extremely fast. Volumes aren't large but that's nots important as long as there is a two way spread.
There is almost always a market that has an inverse relationship to another market. For example, when bonds (price) go up, equities, in general, will go down. Therefore, if you only wanted to go long, and the equity market is going down, trade bonds! There are many markets that are inversely related. It is, IMHO, part of every traders education to at least have a "passing" understanding of these.
As far as what instrument to trade for the beginning trader, I can only tell you what I learned on - MOT, GE, C. I got "killed" in MOT when I first started, and worked my way into things that are "titanic" to move (GE, C) and follow the spoos well. This way, I was losing slower and getting a feel for momentum with as little damage as possible (100 shares of course at a very inexpensive broker so that you are not thinking about comissions.)
nitro
One of my trading accounts is a cash only account within an IRA with less than $25K and traded thru IB. No you can't go short and yes you have to wait 3 days for settling before having access to funds so after trading this account for 2 years I have found you really need to pick your spots. Most equity trades are longer term and for bear plays have bought several LEAP puts on the S&P and the Dow with good success. Trading options also gives me quicker access to funds. After reading Def's comments, may now also look into SSF's.Quote from Fast_Trader:
Do you think one can be successful playing the market long-only? I have a friend who wants to start trading with $15K initial capital, and wants to do it from his cash-only account. That way he's not restricted by the pdt-rule. Do you guys think one can be successful going long-only? Even in a bear market, there are always gainers.
Thanks for any info.
Later.
Quote from Fast_Trader:
Do you think one can be successful playing the market long-only? I have a friend who wants to start trading with $15K initial capital, and wants to do it from his cash-only account. That way he's not restricted by the pdt-rule. Do you guys think one can be successful going long-only? Even in a bear market, there are always gainers.
Thanks for any info.
Later.
Yes, but he'll have to sit on his hands many days.
It depends on the goals. What is "successful"? What is the time horizon, etc?Quote from Fast_Trader:
Do you think one can be successful playing the market long-only? I have a friend who wants to start trading with $15K initial capital, and wants to do it from his cash-only account. That way he's not restricted by the pdt-rule. Do you guys think one can be successful going long-only? Even in a bear market, there are always gainers.
Thanks for any info.
Later.
As I was seeking maximum profit in minimum time with "today" as my time horizon, I found futures trading to be the best vehicle for my personal psychology and goals.
So I think you need to expand on your question with greater detail.
Yes you can make money going long if you know how to time the market. Unfortunately, $15k is not sufficient to trade stocks.
An alternative is to trade Emini futures on the SP500, nasdaq & Dow Jones, this is exactly what I recently did. On average you need like $3000 to hold one contract overnight. For instance, one Emini futures contract on the Dow Jones can make or lose $500 when the Dow move 100 points. This is a modest gain for having $15k in your account. The down side is using much leverage like buying 5 contracts, in the above case you make or lose $2500 on every 100 point move in the dow. This is a bit risky.
An alternative is to trade Emini futures on the SP500, nasdaq & Dow Jones, this is exactly what I recently did. On average you need like $3000 to hold one contract overnight. For instance, one Emini futures contract on the Dow Jones can make or lose $500 when the Dow move 100 points. This is a modest gain for having $15k in your account. The down side is using much leverage like buying 5 contracts, in the above case you make or lose $2500 on every 100 point move in the dow. This is a bit risky.
I'm really interested in getting into trading the S&P and Nasdaq e-mini, but for now am still focused on stocks. I'd rather master one instrument, and then move on to the next. Am looking to start with e-minis in a few months...maybe late this summer