What approach should one take when starting day trading?

Why does every new trader say they want to day trade? Why not think out of the box: like, 'I want to make money - while trying to preserve capital through the learning curve, and would like to do this for the rest of my life'. Try Googling or GoDucking the many academic studies on the success rate of the different trading methods (day, swing, positional/trend). Learn from only the very best - like the Jim Rogers types. Their speak openly of their methods in books and on-line interviews - you can build your trading plan from this.

There are many good traders that emerged from engineering, hedge funds like to hire them and many successful independent traders come from engineering. This talent pool is smart, tech savvy, problem solvers, creators of methods & systems to automate tasks, fast learners, good with software, math, analytics, statistics, predictive modeling, etc, etc. All this pays of with trading although there are other important attributes as well that have to be developed. The learning curve is always longer and more expensive than most ever imagine. Like anything else - those determined to make it that have adequate capital, discipline, and work on making it a life time income stream by protecting their capital as priority #1, will have a good chance of making it.
 
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comagnum said:
Why does every new trader say they want to day trade? Why not think out of the box: like, 'I want to make money - while trying to preserve capital through the learning curve, and would like to do this for the rest of my life'. Try Googling or GoDucking the many academic studies on the success rate of the different trading methods (day, swing, positional/trend). Learn from only the very best - like the Jim Rogers types. Their speak openly of their methods in books and on-line interviews - you can build your trading plan from this.

There are many good traders that emerged from engineering, hedge funds like to hire them and many successful independent traders come from engineering. This talent pool is smart, tech savvy, problem solvers, creators of methods & systems to automate tasks, fast learners, good with software, math, analytics, statistics, predictive modeling, etc, etc. All this pays of with trading although there are other important attributes as well that have to be developed. The learning curve is always longer and more expensive than most ever imagine. Like anything else - those determined to make it that have adequate capital, discipline, and work on making it a life time income stream by protecting their capital as priority #1, will have a good chance of making it.
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The best, most positive post I've seen here so far. OP should read it a few times.
 
Invest extensive research and time into mastering the psychology of trading. Read books, articles, listen to podcast. You will also want to practice risk management because many people fall a victim to making the same mistakes daily. You need to be patient. Take time to learn, then be patience when trading, only taking the right setups. It's not an overnight process. There are no shortcuts, no get rich quick schemes.

Learn and master the basics. The basics of the market you want to trade, Consumer, Investor and Market Sentiment. Then master Fundamental Analysis. Finally, after you have done all that, start to dive into Technical Analysis. DO NOT rely on Technical Analysis. Use it as a Investor/ Trader Sentiment Tool.
 
Please don't trade real $ till you have several months in a row of consistency papertrading on a real time sim-IB has one I believe as well as das trader pro paper. Some examples of real day trading: https://m.youtube.com/playlist?list=UUA7QSCHWRdRrJEEjfLq3g4A btw, i watched a long call on ETRM yesterday for 22% daytrade that lasted 8 mins, so anything can happen! The trick is staying solvent long enough to be around for the homeruns. Thats where your risk & money mgmt plans come in and why you need to practice for a couple of months on a sim. Good luck and please don't be in a hurry.
 
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Hooter said:
Please don't trade real $ till you have several months in a row of consistency papertrading on a real time sim-IB has one I believe as well as das trader pro paper. Some examples of real day trading: https://m.youtube.com/playlist?list=UUA7QSCHWRdRrJEEjfLq3g4A btw, i watched a long call on ETRM yesterday for 22% daytrade that lasted 8 mins, so anything can happen! The trick is staying solvent long enough to be around for the homeruns. Thats where your risk & money mgmt plans come in and why you need to practice for a couple of months on a sim. Good luck and please don't be in a hurry.
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I can only go by my experiences, it is better to go for consistent "makeable" profits on 95% of what I trade and have runner going for homerun trades, but when I have done much back testing, always shows I would have made more by exiting the "runner" where I take profit on the rest in day trading. I recently reduced my percentages I take as a target on very long term Commodity trading from 50% to 25% to keep more for homerun profits, the 25% will be more than enough to keep me in the game as my counter trend approach and expensive hedging adds up in Commodity trading., I can be taking few years of taking selling new highs like in the Indexes before finding the highs, but once found then other areas of adding on to winners makes for huge profits, but always think risk first so you are more than ready to not allow your account to get wiped out.

On options, huge to remember is volume, if it lack open interest or volume, the profit you think you can get out might not be that way, sim in taking the worst fill to make it more lifelike.

If it was me, I would have a sim account with $25,000, never risk more than 2% on any trade and triple it three times before trading real time, might take awhile, but time is cheaper than losing money.

Good luck.
 
lawrence-lugar said:
I would have to kind of disagree with you here...I personally think that these two fields are greatly different.
Trading is much more...open-minded, and perplexed. Specially with shorter time frames, or day trading, as you mentioned you're interested in doing.

Engineering/science is extremely left brain for robotic linear people -- trading requires more...creative...people. in a sense. who are open-minded, independent thinkers who can see or sense the greater picture in an almost artsy or philosophical manner :confused:o_O



I disagree with you here, there is no so-called hierarchy of learning in trading before you can or should progress to another level or area.

Under that assumption, you're kind of assuming all excellent traders...can excel greatly in all areas of the marketplace. And that's never the case; usually a very excellent trader has laser-like specialization where they are able to kill the market in their corner.
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Finding my "corner" or niche was huge! Specialize, specialize, specialize! Of course, a trader can have more than one niche...especially over a longer period of time.

I like data, but the key for me was open minded out of the box concepts thru visualization... especially after filling my brain with thousands of pictures (charts). Then I use data to back it all up! Good post!:thumbsup:
 
JonathanAV95 said:
I'm extremely new to the world of stocks and investing. I'm literally coming from the world of engineering and science. I could say the two can go hand in hand since we are analytical individuals that study charts, graphs and data. I'm interested in the DAY Trading. What tips and advices can one suggest for someone who has never touched that industry. What books can you recommend for the absolute beginner. I understand that the journey of trading at first will be rigorous and made of loses. However, i feel that with that mentality i will never grasp how to day trade. In other words, i am not scared to lose hard earn money if in the end i come out winning with either experience or new attitudes. Any other recommended software i should use, preferably mobile so i can see it on the go.

I apologies if this is the wrong thread for this section, i was hoping this site would welcome noobs and beginners but from the sections offered, it seems it is only for the experience.

Hope to hear from you all soon, thank you,
Jonathan Vazquez
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I haven't read all the posts in this thread...I'm sure there's some good wisdom among them. If it hasn't been mentioned yet...please trade as small as possible with real money until you get thru the "learning curve"...best money saving tip you can get...except this one "don't ever day trade"!:D
 
JonathanAV95 said:
I'm extremely new to the world of stocks and investing. I'm literally coming from the world of engineering and science. I could say the two can go hand in hand since we are analytical individuals that study charts, graphs and data. I'm interested in the DAY Trading. What tips and advices can one suggest for someone who has never touched that industry. What books can you recommend for the absolute beginner. I understand that the journey of trading at first will be rigorous and made of loses. However, i feel that with that mentality i will never grasp how to day trade. In other words, i am not scared to lose hard earn money if in the end i come out winning with either experience or new attitudes. Any other recommended software i should use, preferably mobile so i can see it on the go.

I apologies if this is the wrong thread for this section, i was hoping this site would welcome noobs and beginners but from the sections offered, it seems it is only for the experience.

Hope to hear from you all soon, thank you,
Jonathan Vazquez
More...

I have Engineering background and I did work in WS before.

Day trading is a no go regardless how good your engineering background is. The chart is a random. You are Engineer so you will be more convince if you do a small experiment yourself, use a random number generator (either wrote the program yourself such as srand() in C++ or download any free apps from your Google or iPhone store). Plot the outcome of the random number in the chart, they will be look exactly the same as your normal 1min, 5min, 15min, hours or 4 hours price chart! You can't look for edge in random event, right ? You will be break even in theory for long term in random trade, but if you add in the commission + slippage (especially in day trade), you are guarantee to loss!

I can share the experience and real life fact with you if you want to know more. PM me.
 
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