TOOLS FOR THE NEWBIE, what tools should I use?

T

taumeson

So a month or so ago I got fed up with "Daytrading" via Fidelity with crummy Level I quotes and decided since I was making a few bucks I'd try to do it right...

After reading various trading websites (this one being the best i've found, so props to the admins) I am basicly comming to the following conclusions about the tools I need to get started.

1) Training materials (Books, videos, demo softwares, etc)
2) Datafeed
3) Brokerage firm
4) Trading Software Platform

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So now here's the question:
**** What are some *good* suggestions for each section I mentioned? ****

My specific situation is I'm looking to either do swing or micro trading (I think that's what it's called) in volumes of maybe 3500 shares (Margin trading, $100k of QQQ is probably my limit).

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Here's what I am guessing so far from various posts I've read:

1) Training Materials: I have some videos I bought from traderslibrary.com already and just ordered the undergroundtrader.com book from there too (the two sites seem to be affiliated) Any other books/materials good for a newbie?

Also I've been using CyberTrader's simulator to 'pretend' trade and just learning how a software platform works.. any other better ones? CyberTrader's simulator seems to do a really shitty job of simulating trades so something I could actually practice with would be good....

2) Datafeed: this one I'm really confused about. some people say InteractiveBroker feed is good, I guess I dont really care about price too much, more about fast data streams and futures information... need for level II/etc is a given. IQFeed (saw on QuoteTracker site) looks interesting...

3) Brokerage firm: okay, THIS one I'm really confused about. FreeTrade.com looks good, but I'm woried about the liquidity of my transactions since they DO make money routing to specific ECN's... I read a post/ad by some PointDirex person showing a pretty good rate for ET members... again I plan on trading 3500 shares at a time so....

4) Trading Software Platform: Seems that Medvel QuoteTracker is a pretty good/cheap start... I was also interested in WealthLab Developer but I figure I can pony up the $650 later after I get into the swing of things (no pun intended).

So that's my predicment.. Any suggestions would be greatly apreciated.

ALSO, please try to refrain from using lingo/jargon... as I said I'm a newbie so I honestly dont know half the terms I see being shot back and forth around here.

And PLEASE dont say "go read a book newbie"... if you do say that, tell me WHICH book :P

-Jaysun
 
Please take this in a kind way, but you should try to get some more clarity before you start trading 3500 share range. If you are still working through fundamental question like the ones you posed then it's highly likely that 3500 shares per trade is too big a size for you.
You used "micro-trading" and "swing-trading" in the same breath, but let's face it, those are pretty different operations. Personally I use TS for my swing trading, but could go back to Datek if I had to. And while Datek is a (crappy) tool for swing trading, I'd be killed using it to scalp. Decide the kind of trading you want to do before you decide the platform you choose. And leave yourself room to grow as a trader!

Best of luck.
 
Quote from taumeson:

So a month or so ago I got fed up with "Daytrading" via Fidelity with crummy Level I quotes and decided since I was making a few bucks I'd try to do it right...

-Jaysun
More...
Last one month was a rally month so your results and method may not work in non trending low volume market. Your trading size of 3500 will kill you before you realise what hit you.
Search these boards and you will find answer to your questions, this topic has been discussed several time before.
 
Quote from Lightningsmurf:

Please take this in a kind way, but you should try to get some more clarity before you start trading 3500 share range. If you are still working through fundamental question like the ones you posed then it's highly likely that 3500 shares per trade is too big a size for you.
You used "micro-trading" and "swing-trading" in the same breath, but let's face it, those are pretty different operations. Personally I use TS for my swing trading, but could go back to Datek if I had to. And while Datek is a (crappy) tool for swing trading, I'd be killed using it to scalp. Decide the kind of trading you want to do before you decide the platform you choose. And leave yourself room to grow as a trader!

Best of luck.
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Point well taken. I guess in my "perfect little world" I'll be moving 3500 shares tops (whatever strategy I use). My questions more-so revolve around the area of finding an optimal solution that I (as a newbie) can learn with over the next month or two to get my feet wet, (sure i'll eat maybe $100 in software/datafeed charges) ... so I guess I'm trying to find the best setup so I have as many (Good) things going for me as I can when I start.


Thanks. -Jaysun

Oh, btw: I think the reviews of software/books and stuff on this site is great... and I am reading all the archived forum topics too so feel free to direct me to specific topics if there is good info on this elsewhere.
 
Enthusiasm is wonderful. But so is reality. Don't let the cautions you are receiving discourage you, but I do advise you to take them toheart. This is a much tougher game than you seem to realize. Many of us here have the scars, financial and psychological, to prove it.

The first thing I would do is take half your trading stake and put it somewhere you can't use it for trading, like a bank cd. If, or when, you lose the other half, then you can reflect long and hard on whether or not you want to dip into it.

To choose the best tools, you really need some kind of idea about what kind of trader you will be. You mentioned trading the q's on short and intermediate time frames. Will you use technical setups? How important is good charting to you? Will you use indicators, a trading system, patterns, etc to get into trades? Will you trade both stocks and the futures, will you trade options, how about commodities? All this goes into the best broker and best data/charting package.

There are many books,cd's, tapes, seminars, courses etc out there for widely varying prices. Most are totally worthless. Of course you don't have any way of knowing which are worthless until you start trying to apply their methods. A very important subject to address is risk control and money management. This business is all about avoiding the big hit that takes you out or so wounds you psychologically that you take months to recover.

I would suggest to start small. You seem to have a fair amount of money, and the temptation is to get the biggest, baddest, most feature laden charting package, or some super duper system package, with the idea that youwill quickly conquer the world using your superior tools. Been there, done that, it doesn't work that way.

I don't endorse anyone's course or training, but for someone like yourself, I think you could do worse than spending the next few nights going over everything at www.hardrightedge.com. I'd also look at anything that Linda Bradford Raschke has done, including her website, which has a lot of free info. After you get your feet on the ground, I think the next best thing to do would be to go to www.wealth-lab.com, or some other backtesting vendor, and just learn every single thing you can. This will pay big dividends downthe road.

In terms of data and charting vendors, they are all pretty much the same. Your satisfaction with them will depend more on the quality of your internet connection than their actual product. Try the free trials. I use QCharts, RealTick and a scanning software called Quotes-plus. Plenty of people here like eSignal, DTN has been around a long time and offers a decent product. What you like will have a lot to do with how you use the product. I like to look at intraday, ie 60 minute, charts going back many months. eSig doesn't have that, QCharts does. Others have different priorities.

As for brokers, IB has many adherents. They are cheap and fast, but you do need a separate charting package, as they don't have it. There are many RealTick brokers with varying prices. Many here swear by the Hammer platform, but it is geared towards hardcore scalpers. PointDirex has come on strong the last couple of years with aggressive rates . Never used it myself, but there a e threads on it here. Understand that with any of these, you are pretty much on your own. Particularly at a place like IB, there is minimal handholding. No one is going to take a couple hours to walk you through the s/w or advise you on trading.

A good source is www.daytradingstocks.com, which lists brokers by platform.

Good luck in your trading.
 
If you're going to begin by swing trading 3500 shares on margin, probably the best tool to buy is a shovel. Because you'll want to dig a deep hole to crawl into after you lose your capital.

Best to start by trading 200 shares. Nail that consistently for a couple months, then slowly begin to size up as you gain experience. If you aren't enjoying a fair return for your time and effort, then by all means don't go throwing more money at it until you are ready.
 
Quote from AAAintheBeltway:

Enthusiasm is wonderful. But so is reality. Don't let the cautions you are receiving discourage you, but I do advise you to take them toheart. This is a much tougher game than you seem to realize. Many of us here have the scars, financial and psychological, to prove it.

........ <omitted> ................

Good luck in your trading.
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Thanks AAA!!! Yeah I know I need to be cautious.. Good advice for anyone regardless of how experienced hum? :)

You gave some really good info for me to start from, I really just want the right tools so I can learn over the next month or two before I start loosing all my money. hehehe.

And while the advice about CD's means well, I wouldnt be ready to use it if I wasnt ready to lose it right? I know its a REALLY bad habbit for newbies to just jump in guns blazing and end up losing everything.. that's exactly what I'm trying NOT to do... finding the right tools, get the infrastructure all set up then start trying to train in the 'real' realtime world and if I still feel up to it after a month or two, then start real trades.

I'll do a search for backtesting and see where that takes me :)
 
I bought Tools and Tactics for the Master Day Trader - Greg Capra (Other)
ISBN: 0071379193 | Comments: Excellent condition. Sells new for $55.00.

For me it was pretty technical. Id like to sell it for$30. I'll pay postage.
 
Quote from breezy1:

I bought Tools and Tactics for the Master Day Trader - Greg Capra (Other)
ISBN: 0071379193 | Comments: Excellent condition. Sells new for $55.00.

For me it was pretty technical. Id like to sell it for$30. I'll pay postage.
More...

No thanks for me.. reading the books review in the Books section of this site leads me to think I should stick with the others mentioned :)

Now, if you have any of the books ranked 80% or more for sale I'd be interested.... (Or if someone has a copy of undergroundtrader.com's book let me know too)
 
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