Quote from CaptnDustball:
Okay, another question.
I always assumed that I would trade stocks, mainly because that would allow me to trade something that I understood (i.e. I could choose a company that I had actually heard of or dealt with). Should I expand my options? I've heard a lot about Forax but I'll be honest with you - I know absolutely nothing about currencies. It would seem silly for me to jump into trading something I know nothing about.
But you tell me. Am I looking at it the wrong way?
One thing to consider when you begin to develop what will be your main income stream for life is to approach the opportunity thoroughly.
When it comes to trading there are amateur limits in different markets. The same limits apply to big money and as a consequence big money doesn't make much money, relatively speaking. the amateur niche is a very pleasant one and onlt requires distributing your capital over three income generationg system of trading. I my case all use the same template that simply works from day one in each category.
The categories are:
stocks position trading and sector rotation.
commodities.
Roughly speaking, the critical path to follow is learning to trade effectively and efficiently.
I only responded to you since you chose stocks as a first venue for learning. It is a slow motion experience that has a nice curve of compounding which I noted was 80 cycles@ 10% a cycle. a cycle being three days is informative and slow and very educational. A template is created for making money. It is limited at about 100,000 shares of capital per stream of capital. That is about 2.5 million dollars per stream and the stream is traded every three days to make about 10% per cycle.
When you have learned to make 10% per turn every three days you will find that you are not very busy since the universe, the hot list and the trades are all done automatically or by consulting 1 piece of paper with a chart on it. (see attached).
At this point you can learn to do commodities which are leveraged by about a factor of 50 for money making purposes. One fiftieth of three days is a matter of minutes; about 24 minutes. During the 24 minutes you may do as many as three actions and you are severely limited in the capital you can apply before you come to the partial fill limit of retail trading.
I recommend ramping up to about 25 contracts on the ES e mimi to do about 10,000 dollars a day profits half split on budget for living and half for capital lifestyle acquisitions. I could chat with you on this at the next Trader Monthly get together in February if you wish. you may add another 25 contracts so you can transfer 50K a week into your stock trading streams to grow them; this is like adding 2,000 shares to one stream of capital on the way to the 100,000 share limit. You can graph another equity curve on top of the stock position trading curve to see what the 25 contracts looks like that is not the 25 used for living a given life style.
At some point you have to lay off captial out of the stock streams since too many streams are required at the 100,000 share limit. here you ue sector rotation with large blocks of holdings where you have to spend days to switch from one holding to another. A narrow universe here is one that is showing fundamental projection of 250% ROI annually for the next three years minimum. Count on holds of 4 1/2 weeks per turn.
So you have a question. The underlying question is that you have to learn to know the markets down cold. By following a critical path to do this, you get to have three systems running concurrently for the rest of your life. choosing where to trade is not a possible critical path if you are thinking trading one market is the main possibility.
For most poeple it does not matter. It certainly doesn't matter for employed persons in the financial industry. there it would only metter if the person were going to quit after picking up a good bonus that was high on the equitiy curves you are plotting to understand what is possible. These people do have to start over as private retail amateurs since the curves they envision through trading are more like those of Greenspoon, et al. (he uses 400 ES mini's to make under 3mil a year). In my example you do the same with 50 contracts. The income ratio is not a linear one since you are laying off the commodities earnings (50%) to make money elsewhere.
As of now you are reading and maybe looking at assembling a functional computer(s) with a few screens and the proper feeds at a cost of 300 to 400 bucks a month. You have not written a business plan nor a learning schedule nor travel plans to go anywhere to see anything happening.
I have never dropped in on a functional system for monitoring the markets. For amateurs this is expected. For pro's it is not possible over a few consecutive days to get a system up to monitor effectively. Here I am just letting you know that you are in the prelearning stages; learning doesn't start until you get set up properly.
A person in this thread noted that I misjudged him on his efforts which I had observed through his posts and a few phone calls since we live in the same town. You can say the same since I have only seen a couple of your posts. Don't waste a year not getting profitable on stocks and learning the stock market. And by all means don't start looking at differnt kinds of markets until you catch on to one market and are really banging out the profits.
Get set up promptly with a few screens and the data feeds. Don't invent anything just use what is there for you.
