So you want to be a Stock Trader?

Quote from 2manywhiners:

See page 10 for details about low-life spammers.
More...
So I clicked on the links to see what the douche bag was selling, and not surprisingly I found a website that just reeks of a bucket shop...

CAUTION: New and prospective traders and investors beware of any company or firm offering any product or service through spam advertising. If you're not readily familiar with a certain firm, do LOTS of research and try to find out what other people with past experiences have to say about them. You'd be surprised how many people throw money away on bucket shops, boiler rooms, wizetrade and its clones. Do some background checking, and if there is any doubt as to a firm's credibility, go with a big name that you've heard of before. Maybe they're more expensive (surprisingly most of the big names finally got competitive with the discount brokers a few years back) but for the first few months it's best to try to avoid headaches and scammers. And yes, that also means SPAMMERS.

For future reference purposes, try using the search function to query anything related to the market in Elite Trader's search function. Usually you'll be able to find loads of results matching your search criteria, but in this case there were only five matching threads. One person posted four of the five, and all the related posts were just posted today. The other thread was unrelated... Just remember to use your head and do some background checking before jumping into the deep end of the shark tank head first.
 
Quote from saxon22:

One of the most informative threads on ET that I have come across.

Any advice for those who dabble in futures?
More...
Yeah, don't walk away, RUN!!!

Just kidding :p

Find someone willing to share their trading experiences, and just annoy the hell out of them! :)
 
NYSE vs. Nasdaq (my take as requested by PM)

In my opinion, there's no longer much of a difference between the two. Sure, you could point out two dozen stocks on the NYSE that act completely different than two dozen on the Nasdaq, but take into consideration that there's just as many NYSE stocks that act completely different from other NYSE stocks and vice-versa.

Low Volume, Low Volatility Stocks

New traders would probably do best trading them as opposed to the tweaked out crackhead stocks. You can watch patterns develop at a much slower pace, and adjust to the speed of the fast paced high-volume highly volatile stocks by slowly integrating them into you trading methods. I personally prefer stocks that run around like Jason Statham in Crank.

Cutting Losses After a Few Pennies

Don't do it. It's just my opinion, but if you took the time to read more than two of the pages in this thread, you probably shouldn't be chasing pennies or nickels... The introduction of decimalization to the stock markets killed the SOES bandits and their scalping of 1/8 and 1/4 points. If you're targeting 1/4s or 1/2s, but exiting trades after a couple pennies or a nickel then you're going to get shaken out of 90% of your trades. And that even includes the trades that would have gone a point or more too. If you're targeting nickels or less, then good luck is about the best response anyone will give you.

Scalping the Bid:Ask

Try it yourself if you refuse to listen to 99% of the traders out there who say scalping is dead... you'll eventually learn the hard way... Another Caution: avoid anyone wanting to sell you anything related to trades with target profits under a dime. This falls under the previous cautions. They're called 'arcades' or 'snake oil peddlers'. They're not quite as sophisticated as bucket shops and boiler rooms, but sometimes they can be even more tempting to new traders.
 
another bump.

Beginners: I'm not on ET very much anymore, but if you have questions post them on this thread or send jho a PM and ask him for his take. I'm too busy these days to even check my email, let alone throw pies at people on ET, but I wanted to give this thread another bump because I think it has some decent guidelines for young and new traders... And my opinion that you shouldn't take advice from people online as gospel, still stands. Regardless of who posted the advice, do your homework and research it yourself. Good Luck.
 
Quote from 2manywhiners:

Thanks for the support. I've been wanting to start a thread like it for a while now, I just kept putting it off.

As far as not using technicals goes, I just don't like using lagging indicators to make buying and selling decisions for intra-day trading. Swing positions and investments are different, but to me, making decisions based solely on old data is simply not efficient enough. Most of what I do in the morning is about finding breakouts, and those stocks tend to do things that most technical analysis can't explain. News, changes in fundamentals, or sector related occurrences often help to explain highly volatile swings. There is nothing wrong with trading purely based on technicals, I'm just not very successful at it.

How do I know what the market is telling me? Good question. First, the indices help show market direction. When multiple indices are trading in unison that is a good indicator of what individual stocks are likely to do, but checking an individual stock's related sector is still important too. News and an assortment of other variables come into play as well. Mostly like I try to explain in my posts regarding "forming a matrix" around trades.

How do I analyze volume? Well, if you're referring to the volume numbers on a Level II screen, I look at how much liquidity there is at the time the stock is on my screen and what it has been doing so far for the day. High volume (above its average daily volume) early in the trading day with little resistance almost always points to some kind of corresponding news, like merger rumors, earnings reports, pre-earnings hints, new technologies being unveiled by XYZ, CEO leaving the company, SEC investigations, etc, etc. Volume by itself says little, but it does help to point you in the direction you should be looking.

Price and Volume? Are usually the only technical indicators I look at. I've posted on the subject numerous times, I'm pretty sure I put a few in this thread too. Basically, KISS (Keep It Simple Stupid) really helps to cut down on confusion, and a bit of research into candle and volume patterns will do wonders for your trading, even if you use MAs or Bollingers etc.

Where does my edge come from? Two words. RISK. MANAGEMENT. I've posted numerous things on this subject before. Tomorrow I'll check what I've already posted in this thread and maybe I'll try to dig up some more. Basically risk management is the name of the game. I'd be willing to bet that with proper risk management, even a monkey could net positive returns (see Jim Cramer). I never double down either. Sure It'll work every time, and I'm not being sarcastic here, It really will work every single time, right up until the time where you blow an entire account (see Numerous Funds that doubled down on Enron and the like). Buy low, sell high is for adventure seekers. Trying to buy the bottoms and selling at the very tip of tops can kill an account when you're wrong. You can be right, and still lose money. Buying too early, or selling too early will drive a man crazy. Conversely, waiting too long and buying tops or selling bottoms is equally bad. Using market orders is not the end of the world. Using stops for a beginner is a must (I still use them). Trading is a numbers game (I know I've said that before) getting the numbers right and understanding exactly why you're in a trade, why it is you're buying, and why it is you're selling is key.

I have a philosophy. "I trade what moves best, and what moves best is always changing." Basically, don't be afraid to branch out. I know a lot of beginner books tell you to specialize, but trust me, no stock regularly has significant volatility and easily predictable moves. I screen stocks before (most) every trade. A lot of the time I'm trading stocks I'm not readily familiar with, and sometimes stocks I've never heard of. Just remember to do your homework, and the faster you get at research (with breakouts anyway) the better.

Good luck. Keep 'em coming.
More...
Wow. That was a pretty good post. I think I'll pat myself on the back... :D Like I said, I'm not on very much anymore but I think this thread is about the only worthwhile contribution I've made to ET. So I'm going to periodically bump it so beginners can easily find useful guidelines and equally important warnings.
 
Scamming Scammers and the Scams They Sell http://www.elitetrader.com/vb/showthread.php?s=&postid=1651494#post1651494

Investools, InvestTools, Invest Tools, etc... Is a ridiculously overpriced business model designed to Rip Off prospective beginners. These businesses' practices are shameful, and unfortunately, they exist in very large numbers... Such as WizeTrade and the like, but more appealing and less bucket-shop like.

Quote from 2manywhiners:

Admittedly, I didn't read every post in this thread, but I read enough... Here's my take on Investools:

I was recently asked by a friend of my family about how to get her money back from investools. I briefly told her that I honestly knew nothing about the company, but that if she feels she was scammed, that she should try to contact the FTC to file a complaint about the company. After that brief conversation, I had another conversation with her about the companies history with consumer complaints. IT IS BROAD. However, when I began digging into what little knowledge she was provided by the company in exchange for her money, it became clear (at least to me) that she will not be getting ANY money returned to her from Investools. She was provided with VERY BASIC knowledge of investing, and in return paid significantly more than she should have. Was she ripped off? In my opinion, VERY MUCH SO! But, that's just it, my opinion is that of a professional equities trader, not a consumer. Ma and Pa Smith from "Wherever, NY" didn't know anything at all about investing before going to Investools, and after spending all that money they seem to be very satisfied with their "ROI" that Investools supplied.

So, if you're interested in INTIMATELY learning how to become a successful investor, or more importantly a successful trader, then you should most definitely NOT invest in Investools. Instead, go to some of the TradersExpos (tradersexpo.com) and take the FREE seminars the first time. If you like what you see, then pay the $50-$500 for the multi-day seminars. From what I've read about the 2-5 hours of actual knowledge you receive in those Investools weekend seminars, they will not even compare to what you can get at the pay seminars from tradersexpo. Although the "mentors" running the individual seminars will usually plug their own books, it won't be a high-pressure sales tactic. The other thing you should consider, is that the authors who are there mentoring are proven traders and investors who took the time to WRITE A BOOK. That can't be said about Investools coaches. They get paid to teach, and they learn what they teach by going through an orientation through Investools. That orientation is designed to train them to teach paying customers the Investools source material, NOT how to make money through investing or trading. Think about it... First, though, you should pick up Introductory books for investing. Then graduate to DVDs. If you're not interested in becoming a statistic of a SCAM, then DON'T USE INVESTOOLS. Use your head instead.
More...
 
THE SKY IS FALLING!!! (again...) http://www.elitetrader.com/vb/showthread.php?s=&postid=1647624#post1647624

Quote from 2manywhiners:

Bearish conditions? Maybe, but this is no 2000... The techs burst in the Qs was burning rocket fuel, when it ran out the burst affected unrelated parts of the markets. Look at the Dow, its quite a bit higher than in 2000. S&P is in the same area as in 2000. But the NASDAQ isn't even close to where it was, which is proof of what the problem was. An over-hyped tech market. Even if a sizable bear market were ahead, it wouldn't even resemble 2000... The most recent bubble was in the housing market, not tech stocks or oil or metals.
More...
 
You must log in or register to reply here.
Back
Top