The treacherous path to $200k a year

Anything is possible in trading. It's annoying to hear ppl say how did you make 100K when your so young. I was at 1 Million when I was 27 and I knew jack shit compared to what I know now and yes a majority of that money was lost or squandered away.

All I have to say is, "Go for it" , the world is your oyster. Don't listen to negative comments from some of these ppl.


ozzy
 
I would like to give you some encouragement. As a daytrader in this rather range bound market, I too look to short more than go long. If anyone is going to make a living daytrading, I think they need to have enough capital to trade in 1000 share lots. Where I differ with you is your definition of overtrading, when I fall short it is usually because I did not trade enough. If I take a 3000 share position, I do not look to get a 30 cent move, 15 cents is fine with me. I know from experience that there are more 15 cent moves than 30 cents moves. The more I make the more I trade, because daytrading is about what you have accumulated at the end of day. But how much I get out of trade starts to lower. I may start trading 4000 or 5000 shares of a 20 dollar stock for a nickel or less. It is a lot easier to find nickel move than a 15 cent move. It may be possible to get two or three of those nickels in hour. In this type of trading you are probably trading both sides of the market. If you lower your expectations for each trade and trade more, you are really exposing yourself to less risk while taking money off the table.<p> I do trade for 30 or more cent moves but usually in a 1000 share block. But I will have one or two other positions that I am trading besides that. Sometimes it pays off and sometimes it doesn't, but my living does not depend on finding 30 cent moves. My major point here is that in daytrading, the larger the position the less you movement you should expect from the trade. Lowering expectations and increasing the number of trades is a way for the daytrader to manage risk. I have never really played darts but I like my chances if I could play someone under the following conditions. I get six darts and the bullseye is covered up so that I cannot score the highest value and the person that I am playing against get one dart but gets to aim at the bullseye. I like my margin for error and the lack of pressure in that situation. If we repeat that over several days, I think that I will have more points. The first rule of daytrading is preserving capital. The second rule is managing emotions and that is predicated on setting reasonable and feasible expectations.
 
thanks for the encouragement guys,


ticketwatcher,
I like your explanation of the 15 cent profit instead of the 30 cent profit,

Do you just take your profits once you hit 15 cents?

Or do you take it in sliding scale Say if you have 3000 shares,
You take 1500 shares at 15 cents profit 1500 shares let it ride.

The way I do it is I usually wait till the stock breaks 8ma ,then I start taking profits right there,
If I only have 10 cents and it breaks 8ma, I'd take profits, If I only have 30 cents and it breaks 8m, I'll still take profits, if it never breaks 8ma, I never take profits.

But there are times when I do have 10 cents profit , and it runs away from me, like example XMSR yesterday when I covered for the same price. I just shrug, because I always like to let my winners ride out.

But your thoughts on the frequency of occurence for 15 cents profit occur more then 30 cents is very interesting.

The one thing I don't like is leaving profits on the table, thats worse then losing 10 cents profit :D

I'd like to hear your thoughts on leaving profits on the table with your strategy or how you are coping with it.
 
I do not mind leaving profits on the table. If I do not mind, then this means that I have the complete confidence that there are more winning trades to be made than I can possibly make. The mindset of a successful trader and an unsuccessful trader is revealed on this board everyday. Unsuccessful traders whine about how the market is untradable while successful traders shake their head about how much money they left on the table. <p>I do not try to maximize every trade. If you do, you will be blind to all the other trades to be made.<p>Leave is not a good verb for a trader to be concerned with. The defining verb for the trader is take. I feel good and I feel confident if I can start my day with taking 15 cents on a two or three thousand share trade. I have just taken three or four hundred dollars off the table. I will then start looking to take smaller bites of the apple. I will let a thousand share trade run to what ever I think it has in it. But if I get more than 30 cents it usually is not stock specific which means the broader market is having a good or bad day depending if you are long and short. For the most part I do not trade stocks as much as I trade the market. <p>One tenet of my philosophy is to enter trades on the basis of science, research, or homework, whatever terminology you would like to use, but I exit trades solely on the basis of my experience and intution. My experience says to take money off the table and trade more often. My experience says that 15 is a good profit and if I let a trade go farther I am gambling with the house's money. But remember I speak as a daytrader not a trader who has a longer time frame and may have spent a lot of time setting up a trade.<p>The a recurring argument on this board surrounds the assertion that trading is equivalent to gambling. That is a can of worms. But unsuccessful traders and unsuccessful gamblers have a lot in common. They trade on emotion and when they have taken some losses they sometime trade more in attempt to get even or get back. As I stated earlier, I think you should trade more when you are ahead , but lower your expectations for each trade. <p>Concerning XMSR, some of my best trades are the ones that I make between 0 and 10 cents, I may not make much profit, but it turns out that I may have gotten all out of the trade that there was to get and this time by trading too soon I did not leave profits on the table but avoided taking a loss. There are two sides to exiting too soon. <p> A couple of lateral or little profits trades on the log of daytrader is not a bad thing, but possibly the sign of a successful trader who avoided trading too late which means taking a loss.
 
imo if you're making more than 200K a year in your current business, you're better off sticking with it and trading part-time/position trading. More money to be made in swings/position trades anyway.
 
2 Trades

Short Google 282.31
Covered: 281.87
+150
Not the best stock to short this morning, Stock moved like a slug even when market was dropping. Had +600 profits, did not take.

Short google
-100 (covered at 0.1% lost)

Long QCOM 36.59
Sold QCOM 36.46
-450 (stop lost 13 cents)

I don't go long much, but forgot to notice we are still under 200ma, Shouldn't go long.


-400 Today.

Conclusion

I should take 1/2 profits when hitting support/resistance, I should also readjust my profit goals as ticketwatcher said so I hit more base hits then homeruns.



All in all good day, Just got stopped out of QCOM 3000 shares, My mistake in longing QCOM when we were obviously still under 200 ma.
 
Ticket watcher,

I have a good feeling on what you mean by taking 15 cents profits, Espically during chop where there is no clear trend.

From your post, I will develop a base hit profit taking rule, so I make more base hits. This way I have something to show for once trend changes :)
 
QCOM,
I just re-checked the execution times where I Dropped $450, There was a clear divergence on my charts @ 36.55 that I missed out on. I must have been munching on Sun Chips at that moment.

Completely avoidable, Today there will be detention and chalkboard writing for missing this obvious divergence.
 
Ticketwatcher,

How tight are your stops?

Your posts were extremely helpful. Thanks.

I make a lot of trades, and I do not put in stops, but I am out of any trade before it goes 30 cents against me. Placing stops applies science to the exit of a trade. I leave the exit of trade to experience and intuition. I find that most times when a trade goes against me, it is not stock specific but some market force out of my control such as Greenspan sneezed. Therefore, the stop does not become some arbitrary number but a reaction to the sense of the market.
 
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