I have been in the options trading over the last 4-5 years. Mainly trading over events. Trading earnings reports, insider buying etc.I am wanting to to switch to a little different style. I want to be liquid at the end of the day. I opened up a options xpress acount and ordered Medved quote tracker. Have been trading (stock only) whatever is active for the day in nickels and dimes. Today made 20 trades on AMD ended up in the plus. I am feeling pretty naked right now, since I am in new territory. I'm needing any info on protection should I be covering with an index I have $50k in my trading acct. I want to make 1% a day. Am I even being reasonable? I am in and out of trade no longer than 10 minutes. If you are doing this kind of trading I need a buddy please. Thank you for any words of wisdom.
Switching trading styles
- Thread starter ANERESS
- Start date
Ok,I got the point.. I just want to have a goal maybe the 1% is a little too high a goal to start out with, but the trading style is what I am playing with, trading momentum. I am in Las Vegas and have been thinking about checking out the Don Bright trading group for a little education I know they trade this way. Have any of you more experienced traders ever looked at him or this style of trading? Thanks
ET has a lot of talk about long term average performance.
Lots of talk about risk as well.
Putting the two together regarding day trading of ES it looks like 1 contract would make you 50 bucks.
1 contract (using 2,000 margin/contract) would be 4% of your account. If you got the margin down to 500 bucks you would be risking the 1% that is often spoken about. I don't do the 1% risk thing and I am subpar in knowledge on how money management works as well.
Maybe you can reach a compromise by throwing your past experience into your picture. If you think that you have enough experience and skills and knowledge to do day trading from now on , maybe you can just ease into it for a few months and see if you can make the 1 point a day per contract that others make in ET.
Suppose you turn out ot be making a few ticks more than this 4 tick level that is 1 point.
If you went for 1 point per contract and used 10 contracts you would be using 20,000 of your 50,000.
Look back at your options stuff, did you use much of the 50K you have on a daily basis? or position basis? Options are not my cup of tea so I can't compare.
I do have a viewpoint on trading ES and how much to be involved. I think anyone trading 10 contracts has it made for whatever lifestyle they lead. This is not a viewpoint related to edge trading, however. Edge trading is not workable from my viewpoint.
I do not know what it is like to make 500 dollars a day either. That sounds like having a job that pays 10,000 a month.
If you were to consider position trading with, say five streams of capital (10K each), you would be making a lot more than 10,000 a month. Maybe having 5 streams of capital puts the risk lower and then it is possible to have the money in the stock market. The money velocity of most stocks in a proper universe is such that they do about 5% a day during the part of their regular cycle in which you would be holding them. This is a nice way to do position trading.
My peculiar view is that it is not necessary to lose money while trading. But it is very important to not be in the market when you do not know what the market is doing.
The 1% a day looks like a reasonable amount to be pulling out of the market for living expenses, etc. If you let some money ride occasionally it will grow nicely and the compounding effect will be showing up.
It turns out that people who day trade in futures indexes (non edge trading) can do quite well after a year or so no matter where they start capitalwise. This being the case they have to lay off profits into other places and stock position trading is a lot of fun for that. At some point there is enough wealth to do anything that is required for family life and supporting the community.
For me it looks like if you have 50,000 bucks and are trading full time, how can you not exceed the 500 bucks a day profits?
Why would you be interested in input from someone who would be telling you it is not in the cards for a day trader or position trader to make this kind of money?
Hey thanks for your thoughts. What I have been doing this week is just trading the hot stock of the day. Not trading the options. I have just been in and out every 5 minutes or so I have been getting anywhere from a a nickel to a dime. Putting up about 20,000 to 40,000 for capital (depending on how expensive stock) obviously I am not trading Goog. Whatever the case is I am picking up some wins. The places I am getting burned as I did today was about 2:30(wasn't watching the time) when every other trader was getting out of market.( and there was a .50 slip) I can secure myself a bit by buying a put and call for insurance for the (disaster that might happen) how else can I cover my risks? The problems that I have ran into so far is ... Live quotes not matching and it is taking me too long to get trades through. I made about 25 trades today. I am using 1 minute charts and live quotes. Just using simple averages pretty much. I know I'm missing something on covering the risk. What is it... I am very unexperienced in this style. Thanks!
Aneress, there is a Las Vegas Stock and Options Club that meets once a month in Whitney Library (Tropicana). They have a few full-time traders including me although I have missed the meetings for a few months now. he-he The markets in energy and precious metals are now taking most of my attention.
Daytrading produces income but not wealth. It is much more relaxing and enjoyable to trade in different timeframes (styles) like swing and position trades. Position trades use weekly candlestick bars on 1-2 year charts. Swing trades uses daily bars with 1-6 month charts. When combined with options, the swing trades are very profitable. Your 1% a day will put you way above the current top hedge funds!!! But that is not common. I make a consistent 2-7% a month. I thought that was good. he-he What you make on daytrades is income. While position trades generate wealth as you take the lion's share of the huge moves in sector trends.
I do daytrades but not really fond of it as it takes a lot of concentration which is not really appealing to me. I like to be able to look at what's happening in all sectors while I watch my swing trades. It is nice to be able to go to the kitchen to grab snacks or coffee or hit the threadmill without agonizing about the 5 and 15-minute bars, stochastics, money flow, etc. of your daytrades.
I understand 5% may not be that appealing to you but it is a matter of capitalization. I have friends with over $500,000 equity in their homes. They could sell and move to a cheaper location like Austin, Texas and buy a house cash and trade full-time. But opportunity is only useful when you recognize them and are ready for it!
Daytrading produces income but not wealth. It is much more relaxing and enjoyable to trade in different timeframes (styles) like swing and position trades. Position trades use weekly candlestick bars on 1-2 year charts. Swing trades uses daily bars with 1-6 month charts. When combined with options, the swing trades are very profitable. Your 1% a day will put you way above the current top hedge funds!!! But that is not common. I make a consistent 2-7% a month. I thought that was good. he-he What you make on daytrades is income. While position trades generate wealth as you take the lion's share of the huge moves in sector trends.
I do daytrades but not really fond of it as it takes a lot of concentration which is not really appealing to me. I like to be able to look at what's happening in all sectors while I watch my swing trades. It is nice to be able to go to the kitchen to grab snacks or coffee or hit the threadmill without agonizing about the 5 and 15-minute bars, stochastics, money flow, etc. of your daytrades.
I understand 5% may not be that appealing to you but it is a matter of capitalization. I have friends with over $500,000 equity in their homes. They could sell and move to a cheaper location like Austin, Texas and buy a house cash and trade full-time. But opportunity is only useful when you recognize them and are ready for it!