Learning Day Trading

Hi,

I have been learning and practicing day trading stocks for about six months. So far I am just trading small positions while I continue to learn. I have had mixed results so far. I have been primarily learning strategies like Opening Range Breakout, and trading stocks that gap up or down.

I use Interactive Brokers, Thinkorswim for charting, and Trade Ideas for my scanner. I have been reading through the forums here and have found them very informative. I will be posting some questions, and answering any questions if I am able.

Chuck2001 said:

Hi,

I have been learning and practicing day trading stocks for about six months. So far I am just trading small positions while I continue to learn. I have had mixed results so far. I have been primarily learning strategies like Opening Range Breakout, and trading stocks that gap up or down.

I use Interactive Brokers, Thinkorswim for charting, and Trade Ideas for my scanner. I have been reading through the forums here and have found them very informative. I will be posting some questions, and answering any questions if I am able.

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Welcome to the forum Chuck!

Chuck2001 said:

Hi,

I have been learning and practicing day trading stocks for about six months. So far I am just trading small positions while I continue to learn. I have had mixed results so far. I have been primarily learning strategies like Opening Range Breakout, and trading stocks that gap up or down.

I use Interactive Brokers, Thinkorswim for charting, and Trade Ideas for my scanner. I have been reading through the forums here and have found them very informative. I will be posting some questions, and answering any questions if I am able.

Click to expand...

Welcome to the forum!

Have you done any back-testing on your strategies? That might accelerate your learning curve. I would be surprised if simple ORB strategies were still working well.

Good choice in using IB!

Continue reading and learning as much and as quickly as you can. 6 months is not very far into the journey - good luck though!

options-george said:

I would be surprised if simple ORB strategies were still working well

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I did a bit of testing on this about a year ago. I couldn't get anything worthwhile from it. Not to say it can't work or be the foundation for a strategy. Just that I failed to do it at the time so started looking elsewhere.

Same comment for gaps up and down. With that one I seemed to have the best results going against the gap direction. Didn't look like a good path to keep venturing down at the time so I tabled that one as well.

options-george said:

Welcome to the forum!

Have you done any back-testing on your strategies? That might accelerate your learning curve. I would be surprised if simple ORB strategies were still working well.

Good choice in using IB!

Continue reading and learning as much and as quickly as you can. 6 months is not very far into the journey - good luck though!

Click to expand...

Hi - Thanks for your reply.

No, I haven’t done any back-testing yet. That sounds like it could be very involved and time consuming. Can you suggest a technique or a program that would facilitate back-testing?

Chuck2001 said:

Hi - Thanks for your reply.

No, I haven’t done any back-testing yet. That sounds like it could be very involved and time consuming. Can you suggest a technique or a program that would facilitate back-testing?

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Unfortunately trading is not easy or everyone would be driving lambos around...

Chuck2001 said:

Hi - Thanks for your reply.

No, I haven’t done any back-testing yet. That sounds like it could be very involved and time consuming. Can you suggest a technique or a program that would facilitate back-testing?

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Hi Chuck2001,
Yes, it will be time-consuming and it will require a lot of work and dedication.
there are several ways to go about it.

ForexTester - a simulated program that you can use to effectively paper trade/demo trade a strategy - one-off cost of around $200-$250 - very worthwhile.

Excel - you can do back-testing in xls to some degree but it has its limitations. In any case, it will require you to have access to historical data and that you have a proficient working knowledge of the application.

Some trading platform offer back-testing functionalities - such as TradeStation or Amnibroker - the platform may be subject to a monthly fee depending on your trading activty and/or account balance. There may also be data fees. This enables you to back-test significantly more quickly and accurately than ForexTester - though you need to be able to articulate your strategy and code it in the platform's language. It thus helps if your trading strategy is very rule-based and systematic.

There is a tonne of topics to discuss in relation to testing, and it's important to understand where it fits into the big picture. I talk about testing a lot on my trading blog, including about ForexTester. There is a link to my blog on my signature, and then you can search on the 'testing' category. Some of those blog posts might answer some of the questions you have about testing as well as make you aware of issues you should be considering.

Let me know if you have more questions,
O-G