Hello, I've been looking into expanding my knowledge on the stock market. Is there any books or websites best for learning? Also, should I focus more on the stock market in general before I expand on options trading?
Recommendations for learning
- Thread starter hungkangaroo
- Start date
Yes right here.
https://www.elitetrader.com/et/pages/hall-of-fame/
I was here when ET was a kinder gentler place, IMO.
Maybe start with this one as a "survey" type thread. https://www.elitetrader.com/et/threads/lessons-learned.7386/page-3
If one read all those thread, it would be a great start. Even if you only absorb 1/5 and could do 1/10th.
PS: It is interesting to look back on them and compare how technological changes since the early 2000s has made a difference.
https://www.elitetrader.com/et/pages/hall-of-fame/
I was here when ET was a kinder gentler place, IMO.
Maybe start with this one as a "survey" type thread. https://www.elitetrader.com/et/threads/lessons-learned.7386/page-3
If one read all those thread, it would be a great start. Even if you only absorb 1/5 and could do 1/10th.
PS: It is interesting to look back on them and compare how technological changes since the early 2000s has made a difference.
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Your trade journal going to be about Stock trading or about Options trading ?
wrbtrader
Quite some treads in there, ranging from :
,, Gonna make 1000% per annum '' to
,, Battle for survival ''
No grudge or something against the OP of those treads, but dreaming big and being delusional is two different things.
Would be better of with setting a 30% goal per annum, since if one starts with $10k,
How do you, think, what made that to change ?
OP @hungkangaroo
Watch these series :
https://www.youtube.com/playlist?list=PLnLi8MK-orCHPmCVDyA6BN8jdrvqJ1fAr
Read these books :
https://www.google.com/search?q=how...ECBAQAw&biw=1920&bih=910#imgrc=BKHTC-BU9r_AQM
&
https://www.google.com/search?q=sec...ECCIQAw&biw=1920&bih=910#imgrc=WbuIX-HLXH1tUM
Learn to recognize when someone is selling bs :
Look at the share price since then.
Use their demo and have at least 5 000 simulated trades, and spend at least 12 months doing that, out of which you're glued to screen since market opens and closes for 6 months.
https://www.tdameritrade.com/tools-and-platforms/thinkorswim/desktop.page
Don't start with options, start with shares instead, and don't use leverage, neither go short or any CFD's.
If you follow all of this, will be better off than at least 90% of the newbies out there. Now it's up to you.
When it comes to options, Options as a Strategic Investment, by Lawrence G. McMillan, is considered a classic. If you buy it, make sure you get the most recent edition.
IMHO, beginners should stay away from trading index options, and should stick with equity options or options on ETFs, which behave like equities. And beginners should stick with option strategies and positions that have finite risk, i.e., don't sell naked calls or naked puts, don't do ratio spreads, don't sell stock short. And don't borrow on margin.
Most brokers will give you a margin account and allow you to begin trading spreads with finite risk with an initial deposit of only $2000 (if you are in the USA). And you can begin trading options with small positions that have a maximum loss of only a couple hundred dollars--or even less.
Seriously trading stocks requires a lot more capital to do anything meaningful.
With options, you can easily put on spreads of just one or two contracts that have a maximum loss of only $100 or so, but a maximum profit potential of four or five times that. Whether such positions actually generate a profit is a very different question. But the possibilities are real.
In my world, buying $100 worth of stock just seems kind of silly... unless it's a custodial account for an 8-year old, and it's a long term buy-and-hold thing. But that's not trading. That's a long term investment.
BMK
IMHO, beginners should stay away from trading index options, and should stick with equity options or options on ETFs, which behave like equities. And beginners should stick with option strategies and positions that have finite risk, i.e., don't sell naked calls or naked puts, don't do ratio spreads, don't sell stock short. And don't borrow on margin.
Most brokers will give you a margin account and allow you to begin trading spreads with finite risk with an initial deposit of only $2000 (if you are in the USA). And you can begin trading options with small positions that have a maximum loss of only a couple hundred dollars--or even less.
Seriously trading stocks requires a lot more capital to do anything meaningful.
With options, you can easily put on spreads of just one or two contracts that have a maximum loss of only $100 or so, but a maximum profit potential of four or five times that. Whether such positions actually generate a profit is a very different question. But the possibilities are real.
In my world, buying $100 worth of stock just seems kind of silly... unless it's a custodial account for an 8-year old, and it's a long term buy-and-hold thing. But that's not trading. That's a long term investment.
BMK
I think peoples attitudes towards wealth and towards people has changed. Back when the internet was just getting going, the masses were discovering what the UUnet people already knew, you can connect with people all over.
We used to, and I still do, hold by the rule never write anything you would not say in person, face to face.
Also trading on line was more primitive for retail. The fact that you could do it was pretty cool. Now many have not known anything different. Also so much social comparing going on and posturing. What people know who have money, that character counts. On some level, after you make the money, that is all that counts.
There was a famous trader said about the "rule of abundance": "the more you give the more you will get". This makes sense. You want to hang out with people who scrap for little things, or hang out with people who are not worried about little things, and are generous? I think people don't get that as much anymore.
But to be clear, there where the share of posers and BSers. Plenty of doubters too. I remember posting that I was stopping after 5 years (trading index futures) and broke even after commissions. General consensus was I was lying. So I posted my IB statement for the year. 100+ million moved in an out. Profit about $34 dollars.
Lastly, I think ET can be a positive place. Encouraging, and helpful, trading is hard enough dealing with yourself and your learning, shortcomings and frustrations. No need to pile on people. And certainly no need to pile on others AS WAY to deal with your, learning, shortcoming and frustration.
As for those thread, I have been re-reading them. It is interesting that many are MUCH more implementable now, than they were then. But so many core concept still apply.
Cheers
We used to, and I still do, hold by the rule never write anything you would not say in person, face to face.
Also trading on line was more primitive for retail. The fact that you could do it was pretty cool. Now many have not known anything different. Also so much social comparing going on and posturing. What people know who have money, that character counts. On some level, after you make the money, that is all that counts.
There was a famous trader said about the "rule of abundance": "the more you give the more you will get". This makes sense. You want to hang out with people who scrap for little things, or hang out with people who are not worried about little things, and are generous? I think people don't get that as much anymore.
But to be clear, there where the share of posers and BSers. Plenty of doubters too. I remember posting that I was stopping after 5 years (trading index futures) and broke even after commissions. General consensus was I was lying. So I posted my IB statement for the year. 100+ million moved in an out. Profit about $34 dollars.
Lastly, I think ET can be a positive place. Encouraging, and helpful, trading is hard enough dealing with yourself and your learning, shortcomings and frustrations. No need to pile on people. And certainly no need to pile on others AS WAY to deal with your, learning, shortcoming and frustration.
As for those thread, I have been re-reading them. It is interesting that many are MUCH more implementable now, than they were then. But so many core concept still apply.
Cheers
To the OP, I agree with Norbert, start with stocks. Liquid stocks. Things over 6-10 dollars, and over AT LEAST 250K daily volume. And perhaps stay away from the really popular stocks. Many sharks swimming around.
I have a friend to trades options mostly. He is good and sees a lot of opportunities. But he can't read a chart well. Of course some option strategies you don't need to, but if you have a good feeling for the underlying instrument, options can really get you going.
On the other hand, I have never gotten into them. But I can swing, scalp and day trade but 20 years of looking at charts will do that.
Enjoy the journey.
I have a friend to trades options mostly. He is good and sees a lot of opportunities. But he can't read a chart well. Of course some option strategies you don't need to, but if you have a good feeling for the underlying instrument, options can really get you going.
On the other hand, I have never gotten into them. But I can swing, scalp and day trade but 20 years of looking at charts will do that.
Enjoy the journey.
Yes, had the same thought and you mentioned the abundance and so it is, that the availability of information, has dis-valued it (as any other product). As for posturing, the era of social media, made narcissism flourish into all time highs.
(maybe the %% were the same, yet there was no way for such folks, to show to the world, of how brilliant... They are. (Cmo'n Nobert, don't get hippocratic, quite guilty of this one yourself & keep that ego under the leash))
Although more succeeds, the % of hose who starts, and makes it, probabbly remains similar.
Yup, stay in the lake instead, no sharks = profit. Good gem on the vol.
https://www.elitetrader.com/et/threads/thats-a-nice-lake-part-1.343269/
Like this one. Sorta have my own version of this principle.
If you say so ;
as of matter, vbeen looking for another short term goal, that would ask of me only my time, lots of cookies, and lots of coffee to be dealt with.
This one fits well.
P.S
Hey, one more question, what happened in - between, since you left & up to a ,,comeback'' point to ET and why coming back at all ?
(not that i wouldn't so, just curious)
This was maybe the wrong subforum to post this in.
Don't waste your money on courses. If you have reasonable intelligence and reading comprehension, just get a couple of books from Amazon. They are pretty much all the same, TBH. Then read them again. The only way to read a "how to day trade stocks" book is with a highlighter and a pad of sticky notes. One of my favorites was by Andrew Aziz, "How to Day Trade for a Living" and blah blah blah. Not the advanced book, it's mostly a rehash of the first one. But the first one covers all the basics. Another good one and this will generate howls of outrage I am sure, is one I just read, by Ross Cameron, don't remember the title it's in my trading bookcase but too lazy to go into the office while I got my feet kicked up in the recliner. Do not buy their stuff, do not pay for their chatrooms or courses or social fooferoos cause hey, you already got the book. Don't buy ANYTHING. There are lots of youtube videos that might explain some things better in a visual way. Again, don't buy anything. And most importantly, don't buy anything.
After a month or so of study, open a brokerage account with $2k or so. No less. More is okay but TBH you are probably better off with just $2k to $10k to start, even though that puts you way below the PDT threshhold. (Your first homework assignment, study up on Pattern Day Trader rule, or PDT.) Make sure your broker gives you free papertrading account. Paper trading is a simulated envirunment using real market data but not real money. It is NOT the same as live trading and the difference is your second homework assignment. But paper trading will get you familiar with trading in general, how the different order types work, about price action, patterns, and let your practice your strategies. Just pick one or two, and practice the daylights out of them. Three at most. Learn to use a scanner. There are good free ones like TradingView or FinViz that will do you for paper trading, definitely. Paper trading also gives you a venue for making your noob mistakes where they won't cost you thousands of dollars. Even mouse and keyboard fumbles are something you need to train out of, before you go live.
Don't think you are ready for the big time just because you double your paper trading account in a month. You aren't. Trade on paper for a minimum of two months if you are totally cool with losing your live account, 6 months if you would rather not if you can help it. Put your book knowledge to use, especially regarding risk management, position size, stops, levels of support and resistance, and so on. I know, sounds like another language now but you will get it figured out if you read your books, watch the vids, trade the paper, and read the books again after trading for a while.
I'll stop here because you need to accomplish those first steps first before you even consider trading with real money. Unless you are totally cool with giving it away to every other trader who already has some small amount of actual experience. Your loss is our gain. Now you have been warned and I won't feel bad about taking your money. 90% of all new day traders FAIL. Do you have some reason to believe you will be in the 10%, and can you withstand the inevitable beginner losses, and fund your account all over again? Just askin.
If you just want to make some money in the market, or start a nice retirement nest egg, don't day trade for the first 4 or 5 years. Buy TQQQ and hold it until everyone screams at you to sell it cause the sky is falling. Then sell it and buy gold, copper, and bitcoin. When the market turns up again, buy your TQQQ back. You should not have to do this more than once in maybe 3 to 10 years. A small dip in price is no biggie. You will be in it for the long haul. Be aware that TQQQ is a "leveraged" ETF (look up both terms) and the pros will tell you it is too risky and you should buy QQQ or SPY instead. It will go up. When we have a total market collapse you should get out and get out early. A recipe for disaster is selling the dip. You want to sell while it is still reasonably high. The dip is where you want to BUY. Buy cheap, sell expensive. Right? Right. But don't worry about small hourly or daily ups and downs. Add to it every chance you get. Look at TQQQ's historical gains. Look how much it gains in an average year. Now consider your initial investment account making that the first year, and then the next year you add the same amount, plus the same percentage on your first year's profit, plus your year's contributions to your account plus the earnings on THOSE funds. Keep doing that, extrapolate outward and I am assuming you are a young man with 40 years of work left in you, investing and seeing all your investments compounding over and over. If you only add $100/week to an initial $2k investment, and you are making say 30% a year and skipping maybe one out of every four years, and paying your taxes which will be pretty reasonable since this will be either a Roth or a 401k, and what will you have when you are old enough to collect social security? HINT: your income from your investments will disqualify you from collecting until you are I think 70. But anyway you should have a bunch of millions. And in the meanwhile you will be learning how the markets work. Daytrade, sure. But if you are under 50 you really should concentrate on investing first, and invest all you possibly can. Invest the max, in fact. It makes a difference. A big difference.
Don't waste your money on courses. If you have reasonable intelligence and reading comprehension, just get a couple of books from Amazon. They are pretty much all the same, TBH. Then read them again. The only way to read a "how to day trade stocks" book is with a highlighter and a pad of sticky notes. One of my favorites was by Andrew Aziz, "How to Day Trade for a Living" and blah blah blah. Not the advanced book, it's mostly a rehash of the first one. But the first one covers all the basics. Another good one and this will generate howls of outrage I am sure, is one I just read, by Ross Cameron, don't remember the title it's in my trading bookcase but too lazy to go into the office while I got my feet kicked up in the recliner. Do not buy their stuff, do not pay for their chatrooms or courses or social fooferoos cause hey, you already got the book. Don't buy ANYTHING. There are lots of youtube videos that might explain some things better in a visual way. Again, don't buy anything. And most importantly, don't buy anything.
After a month or so of study, open a brokerage account with $2k or so. No less. More is okay but TBH you are probably better off with just $2k to $10k to start, even though that puts you way below the PDT threshhold. (Your first homework assignment, study up on Pattern Day Trader rule, or PDT.) Make sure your broker gives you free papertrading account. Paper trading is a simulated envirunment using real market data but not real money. It is NOT the same as live trading and the difference is your second homework assignment. But paper trading will get you familiar with trading in general, how the different order types work, about price action, patterns, and let your practice your strategies. Just pick one or two, and practice the daylights out of them. Three at most. Learn to use a scanner. There are good free ones like TradingView or FinViz that will do you for paper trading, definitely. Paper trading also gives you a venue for making your noob mistakes where they won't cost you thousands of dollars. Even mouse and keyboard fumbles are something you need to train out of, before you go live.
Don't think you are ready for the big time just because you double your paper trading account in a month. You aren't. Trade on paper for a minimum of two months if you are totally cool with losing your live account, 6 months if you would rather not if you can help it. Put your book knowledge to use, especially regarding risk management, position size, stops, levels of support and resistance, and so on. I know, sounds like another language now but you will get it figured out if you read your books, watch the vids, trade the paper, and read the books again after trading for a while.
I'll stop here because you need to accomplish those first steps first before you even consider trading with real money. Unless you are totally cool with giving it away to every other trader who already has some small amount of actual experience. Your loss is our gain. Now you have been warned and I won't feel bad about taking your money. 90% of all new day traders FAIL. Do you have some reason to believe you will be in the 10%, and can you withstand the inevitable beginner losses, and fund your account all over again? Just askin.
If you just want to make some money in the market, or start a nice retirement nest egg, don't day trade for the first 4 or 5 years. Buy TQQQ and hold it until everyone screams at you to sell it cause the sky is falling. Then sell it and buy gold, copper, and bitcoin. When the market turns up again, buy your TQQQ back. You should not have to do this more than once in maybe 3 to 10 years. A small dip in price is no biggie. You will be in it for the long haul. Be aware that TQQQ is a "leveraged" ETF (look up both terms) and the pros will tell you it is too risky and you should buy QQQ or SPY instead. It will go up. When we have a total market collapse you should get out and get out early. A recipe for disaster is selling the dip. You want to sell while it is still reasonably high. The dip is where you want to BUY. Buy cheap, sell expensive. Right? Right. But don't worry about small hourly or daily ups and downs. Add to it every chance you get. Look at TQQQ's historical gains. Look how much it gains in an average year. Now consider your initial investment account making that the first year, and then the next year you add the same amount, plus the same percentage on your first year's profit, plus your year's contributions to your account plus the earnings on THOSE funds. Keep doing that, extrapolate outward and I am assuming you are a young man with 40 years of work left in you, investing and seeing all your investments compounding over and over. If you only add $100/week to an initial $2k investment, and you are making say 30% a year and skipping maybe one out of every four years, and paying your taxes which will be pretty reasonable since this will be either a Roth or a 401k, and what will you have when you are old enough to collect social security? HINT: your income from your investments will disqualify you from collecting until you are I think 70. But anyway you should have a bunch of millions. And in the meanwhile you will be learning how the markets work. Daytrade, sure. But if you are under 50 you really should concentrate on investing first, and invest all you possibly can. Invest the max, in fact. It makes a difference. A big difference.
All good thought from GM. Just FYI, I got a ton of live experience (over 10 years) and as I creating a new strategy, I have been on paper for over 18 months. Part of it is I started from scratch, the other part is, I got a working system, but I am testing the boundaries so that I know what they are and what will happen. OTOH, it is coming time to test with live again, because there is no substitute. I will kick down the leverage to the minimum and give it a whirl, probably late next month. It will be the 6th time in 18 months. Not being in a hurry is an advantage. So far I have only burned through about 1% of capital in the test runs.
Lastly, for me personally, I know there are a lot of places that can go sub-optimal, and these are where profits can slip away, a lot. So I prefer to optimize first, for free, then test live. Even though live is profitable, I still go back to paper when I see a potential issue and test and work it out. Not looking for foolproof, but certainly fixing the obvious, and adjusting to avoid the unfixable.
Best of luck.
PS: Don't follow someone else's method and think "this it it". Perhaps trading is like eye glasses, and just because something seems better than 20/20 it might cause damage or give you a headache. Get the right Rx for you.
Lastly, for me personally, I know there are a lot of places that can go sub-optimal, and these are where profits can slip away, a lot. So I prefer to optimize first, for free, then test live. Even though live is profitable, I still go back to paper when I see a potential issue and test and work it out. Not looking for foolproof, but certainly fixing the obvious, and adjusting to avoid the unfixable.
Best of luck.
PS: Don't follow someone else's method and think "this it it". Perhaps trading is like eye glasses, and just because something seems better than 20/20 it might cause damage or give you a headache. Get the right Rx for you.