Encouragement for a new trader please..

[numbertea]

I don't pretend to have a lot of trading experience but I can understand the need for outside encouragement. Whenever I trade the stressful part for me is not holding a trade position but finding the time discover opportunity that I am comfortable to trade. For the past five years I spent between two weeks and a month doing end of the day NASDAQ trades using manually web entered trades until I made enough to make up for not having any type of managed retirement account. I lost about 80 percent of my retirement in 2000 because I thought my account was being "managed". So I vowed that I won't let that happen again.
As far as I can tell you are on the right track, it takes time and effort to become in any way successful trading. I am working now on automating my system. The only way I am able to do this is that I am recently divorced so I have some time to spare now...setting things up takes an unbelievable amount of time. I have been told before that a business, no matter how small, to set up, will take twice the effort as working for someone else. Can you fit it in your schedule? If so I wish you the best of luck.

 

[donaldduke]

i am excited to be a new member to the T2W forum and look forward to all feedback - positive or negative.

Yeah go for it, the worst that can happen is you lose some money, just dont lose it all, hopefully you stop when you are down 15K, or whatever level you decide to set, and you have to go back to your day job.

 

[sighthound]

Everyone will face problems through life,wether caused by ourselves,fate,karma,sod's law or just that sh!t happens.If you can keep your wits about you ,a bit of focus and determination no one really has the right to say you are going to fail.Everyone had to start from somewhere and who knows you might just have that bit extra to make it work.

 

[tommog]

All the gurus like to make out all you need is a plan and money management and you will be a success. That is utter BULLS**T. They say that because they cant trade and if they can are not going to give their edge away in a book for $30.

I cant tell you the number of guys that blow up that do everything they are meant to. Sit there with their 5 tick stop, and are disciplined and are not getting out until they are onside at least 20 ticks. Have their little system stuck to the wall behind their computer and a copy of "the Disciplined Trader" close to hand ready to take on the worlds markets. They last about 6 months.

To imply this is all you need to be successful is insulting to not only the people that are successful, but also the to all the many people that fail because according to the conventional wisdom all you need is a mental discipline, wohoo!

No, i wish that were there case. BUT, trading success is achievable, but not in the way the books tell you. You need to tear up the rule book and find what works through hours of testing, (not systems building, actually putting your hard earned money to work). Have absolutely no pre conceived ideas of what you should or shouldnt be doing and above all you need to be doing something nobody else does. If everyone else is saying "trade with the trend" "have a stop loss" "have a target double my stop loss" "use technical setup xyz" then you can be certain that ISN'T how to make money because the majority are never profitable. All the people that make money in this business have a "trick" or "edge". This can be something such as they spot a recurring anomaly in the order book produced by one of the high frequency algos, they trade a complex arbitrage or spread opportunities that only a few have access to due to low costs and lightening fast connections. Or sit there and make 70 trades a day, day in day out for 6 months and manage to start instinctively picking up where the next couple of ticks are going to go. Even then they are down quite a lot of money from their losses whilst they learned to trade plus 6 months of overheads and need a bit of luck to get them back in the game.

To all professional traders out there bank/prop etc tell me if im wrong, because in all my years at these places i have never seen somebody sit down and make a penny with a moving average cross over.

I dont mean to sound harsh and wish the OP the best of luck, but please do not start "trading" with 40-50k until you have traded 2-3k (i.e no down weeks if you are a day trader) for AT LEAST 7-8 months. Then allow 15k to trade and build up.

Success is possible, but if you are new, sticking your $40-$50k into a couple of top performing mutual funds that will give you 8-10% a year would be a far more profitable investment.

But on the upside I know 30- 40 people (form working with them day in day out) that comfortably make £5k a day for themeslves and have maybe 2 down days a month.
But I can assure you they dont do anything you can learn about on the internet/book. So by all means get involved start playing around with what does/doesnt work for you but please not with all your savings

 

[Devilicus]

Have you traded your system for a few months on demo at least? Done some back testing?
Surely, after studying, that should be the first thing that you do.
Your post reads a little like you have read about trading psychology and chart patterns, and now you're looking to jump in with 40k.
I think you need at least a few months of trading either a demo account, or, ideally, very small stakes, and see how you have done after, say, 2 months.

As for why people bother with it if it takes really takes years to just "break even" even after doing all the proper training, paper trading , utilizing proper risk manangment etc etc, I guess it's because, assuming you eventually make it, the rewards can be exceptional.

 

[Splitlink]

Black Arrow,

You may not lose money, but unless you are some kind of freak loner, retired, house husband or whatever, trading is quite stressful.

Mortgages, car payments, holidays, kids, food etc etc, these normal expenses don't seem to mix well with the markets....unless you are wongered up (millions) in the first place.

Good luck.

I go along with what your post.

I am retired and have more money than I use to trade the markets.

This takes the stress completely away from my trading.

Over the years, I have been in some situations that could have been disastrous if I was trading outside my means. This , I have never done and strongly advise against.

If OP is trading with 40K to start, I hope that he is a wealthy man or is able to, as the song goes

"Pick yourself up
Dust yourself off and
Start all over again"

If he can't do that he should redefine his Plan B.

 

[Black Swan]

That's a point. Any ninja worth his salt wouldn't be spotted by anyone, council investigator or otherwise.

TBH I only mentioned the benefits scrounging degen gambler because it was mentioned on LBC radio when I was making a snack in the kitchen.

I'd kinda forgotten about the *delights* of LBC now I'm back up north, found it a few months back on that there new fangled DAB wireless set, it's Talk Radio for the Daily Hate readers now the Daily Sport has been killed...

 

[Black Swan]

. All the people that make money in this business have a "trick" or "edge". This can be something such as they spot a recurring anomaly in the order book produced by one of the high frequency algos, they trade a complex arbitrage or spread opportunities that only a few have access to due to low costs and lightening fast connections. Or sit there and make 70 trades a day, day in day out for 6 months and manage to start instinctively picking up where the next couple of ticks are going to go. Even then they are down quite a lot of money from their losses whilst they learned to trade plus 6 months of overheads and need a bit of luck to get them back in the game.

Agree with all of that post, these bits stood out for me..

 

[Nikitafx]

We have had 26 replies at this thread and I guess 25 was advising against your idea, and one said "good luck".

Assuming the good luck is a thumbs up, the odds are really stacked against your idea before you have even deposited your cash into your trading account. That should tell you something.

I agree with Devilicus when he said it looks like you been doing some reading but have you been trading, paper or real?

Cause if you have had traded for sometime and learned a few things about the market, then I think you wont be highlighting most of the points you have highlighted in regards to what you planning to do.

Example :
1. Minimize risk with small position sizes and tight stops

( Goes without saying. Practice would have it as second nature to a trader. Only practice. If you have had sufficient practice you wont be even mentioning it as part of your trading plan. )

2. Scale in to positions as they go in my favor.

( Out too soon Out too late. That is just talking about profitable trade, not the once that are going south. Things like maximizing a winning trade and all are very easily planned and talked about rather than being executed as market is unfolding in real time. Is it a retracement or a reversal?. Should I take or should I hold?. Again only experience will smooth this out. Cant totally eliminate it but having it smoothed out itself is considered really great.)

3. DO NOT over trade.

( Define over trade? Over trade can only become over trade when you lost a lot of money through continuous bad trades. No one calls it Over trading if your account jumps up by double percentages on any given day. Its only over trade when the double digit numbers are losses. So how do you define over trade?

Its also not as mechanical as you think. Trading is about taking opportunities as they come. It is also about staying out of the market most of the time. I find waiting for the entry is one of the most toughest things to do. Alot of times, waiting for the next candle would have made all the difference, regardless whether its to maximise profit, minimise losses or take a wining entry for the matter. )

4. Stay focused and disciplined on the momentum doubler plan and strategies.

( You have to be someone like Buddha to have clarity in trading. The mind games the market plays with you is something you have to experience yourself cause I dont have words or space to describe it to you. Especially when you have had a bad run. Suddenly this thing called inherent nature kicks in. You dont know your doing it but you will be doing it. Your true nature in terms of accepting losses, risk taking, dicipline etc etc will come out of the wood works. Again, these are words that are easy to repeat to ourselves but extremely difficult to practice when you are trading, especially with real money. You have had some losses on that day or the week and suddenly your confidence is shaking so bad and the moment you enter a trade you feel so helpless cause now its no longer in your hands. You cant talk about being disciplined at this stage of your trading career. Experience counts again. )

5. Strictly use the techniques of momentum breakout strategies I have studied
over the past 2-1/2 years.

( Like it or not, the market is not so easy to read. The market is also something that does not behave in the same way twice. Dont think that something with the potential to make you wealthy beyond your dreams will give out its secrets so easily.

It takes years to be able to read the markets, especially when you are using technical charts because this is a tool we only saw and started using once we decided to look into trading. I have never seen a candle stick on a graph before and I was a science stream student during my school days. Now couple that with time frames and how the patterns change as the time frame changes even though the price movement is the same. It takes a lot of effort and serious hours of watching to be able to profit from it.

Its even more difficult to practice what we have preached to ourselves when the market decides to have a mind of its own and changes that mind day in day out, week in week out. You need experience to be able to profit from it. Even experienced traders make mistakes and do have loosing trades. And most importantly you must have had sufficient practice to be devoid of emotions when you are trading with real money. Something that most of us still get hit with especially when your lot sizes grow. )

6. Manage my P&L properly.

( Managing P&L is something that will only come when you find out for yourself how much profit and how much loss you are making first. You cant plan or manage that before you have started out. Most dont get to this part cause they are back to their day jobs as some of the senior members pointed out earlier before they see a need for it. )

7. Put full time and effort into identifying potentially good stocks to trade and
managing them in intraday as well as swing type trades.

( I only trade forex. But I can tell you for a fact that a full time profitable trader does not put in so much effort and work hard to be profitable. I can swear by this. You need a relaxed, trouble free, sharp mind to trade. You would be doing it full time with maximum effort when you are learning and still trading paper money to gain as much insight as you can. You dont want to be doing that when you are trading with real money. The last thing you want is to be too highly strung or too rigid in your thinking while trading cause the market will always have surprises for you. You have to be zen.

Secondly, as I have highlighted earlier, the market does not behave the same way again and again continuously. What might be a good currency pair this week might be an absolute bummer the following week. What looks like easily traded historically will not be that way once you put your resources into it.

Im sorry but you saying that "managing trades intraday as well as swing type trades" shows that your are repeating what you have read some place but you havent really got an idea what it is about. No one manages a trade. You get in a tad bit after the big boys do, capitalize on their wave and get the hell out before they are done. We are really small single celled organism in a pond full of crocs.)

8. Equip myself with the proper tools to be successful (level 2 platform and IB broker to
keep commissions small )

( If you read about people complaining about 1 or 2 pip difference in their spread and say its hurting them then you can safely say that their trading is pretty much hit and miss. The same goes to an order that goes in late by 3 or 4 seconds. Superfast speed and smaller spread is going to have a negligible impact on your profits especially in the beginning. I wont be bothered about an extra pip in spread unless my pay out per pip is something like 10K USD or something and I want to take the risk of leaving my current broker and move on to another to save that one pip or so. It would be the least of your worries especially when you just started out. )

So in conclusion, I think you are getting yourself into the deep end without having enough experience.

I dont know about stocks, but if you are into forex and you are starting out, then my advice would be start a mini or micro account with not more than 5K USD in it. IF it grows then it does. If it doesnt then you still have a big amount to fine tune your trading issues before the account call margins.

I use to think that I need to put in a fat amount in order to make good returns. If you knew anything about trading, then you would know that the idea is to risk a really small amount as capital outlay and chase the big amount through compounding.

I had a mental list like yours when I first started out, and nearly all of it was proven wrong or not what I had expected. I was lucky I found a trader who not only shared his systems with me but mentored me along until I sorted out my trading issues. I was also lucky I didnt not try to make a buck by investing 50K USD into the markets.

Your will be better off keeping 40K USD as back up cash for your daily living and expenditures since you planing to quit your day job. Trade with 5K USD and keep another 5K to top up your account.

You are going to need it.

 

[Nikitafx]

p/s Yes, as one of the senior members pointed out earlier in this thread, I did have all my rules in regards to entry triggers and things to watch out for printed, laminated and prominently stuck on the wall behind my laptop so that I wont miss a cue when Im about to take a trade. It didnt help me one bit.

 

[numbertea]

My guidelines are also on my wall. One word...patience. But it does help me.

 

[shadowninja]

If I stuck the rules on the wall, the screens would block the rules from view. So I stuck them dangling down under one monitor. Kept getting in the way. So I decided to hell with rules. Who needs rules!




Just kidding.

 

[Doomberg]

People are right in saying its not something you can just 'do'

On average out of 10 trades what is your win / lose ratio?

If you were happy with this you wouldn't be asking us for encouragement...

From experience, day trading is the most ruthless form of trading, you'll lose money... its the only way to learn from mistakes. If you're going to do it then start off small and build up over time, but imo rather than go demo use real money but small, you'll learn more

 

[Tradekingfox]

As I am nearing the point of launching my career as a full time day trader, I have been hearing so much negativity about day trading that it makes me sick.
Everything I read on the internet, friends I talk to, etc all say "Bud you'll lose money". They all say , and I truly mean everything I read says, that I will lose my money. This is become very disheartening and I don't want to believe them but at the same time I don't want to have my head in the sand either. I understand all the SEC disclaimers and the no profitability claims etc etc

I think my goals are very reasonable:
Minimize risk with small position sizes and tight stops
Scale in to positions as they go in my favor
DO NOT over trade
Stay focused and disciplined on the momentum doubler plan and strategies
Strictly use the techniques of momentum breakout strategies I have studied over the past 2-1/2 years
Manage my P&L properly
Put full time and effort into identifying potentially good stocks to trade and managing them in intraday as well as swing type trades.
Equip myself with the proper tools to be successful (level 2 platform and IB broker to keep commissions small )

To ALL T2W members: I am not swaggering into this with a "part time mentality" thinking that I can be successful without a lot of hard work. I am fully committed to doing whatever it takes to make myself a successful trader as evidenced by my enrollment in numerouse training classes . I study DVD's/principles/chart patterns almost every night. That is why I have sought out the best in the industry - I want to be successful. This will be my full time job now and I will treat it with the same energy and discipline as I did to become successful in my professional career.

So my question is:
Since I am new to live trading, my financial goals, I think, are very reasonable: $80 - $100 per day . I am starting with a $40,000 - $50,000 capital account with 3x that available with margin account.

I know there will be losses but i understand about limiting these with small stops and small lot sizes. I know that nothing beats "live trading" experience but I feel that the lessons I've learned from experienced professionals should greatly shorten my learning curve.


So I guess I'm looking for a little encouragement . Is it "reasonable" based on how much i've studied and how dedicated I am to succeed , to acheive the target of $80 - $100 per day?

i am excited to be a new member to the T2W forum and look forward to all feedback - positive or negative.

Good luck trading Black Arrow.Iam new to this site,and kinda new to trading too.This is only my 2nd year trading live.I am swing trader bc i also working full time.Just like you i study for good 6 to 7 month before opening my online broker account.Started w only 2000$ just to get filling how the live trading different from paper trading.I lost most of it by the end of the 2010.My mistake that i made going right after options trading,should of proble stick with stocks in the beginning.Even tho i was making good entry points what really got my account wipe out is my own GREED.I didnt take profits and wanted to stay day or 2 longer.The positive i took out of my 1st year of trading,that i could of make profits,just had to work on taking profits and move on to next trade.In 2011 so far iam up 20% just trading stocks only for now.I avg 3 to 4 trades a month.On your Q. about if u can make 80 to 100$ a day w/40k to 50k is yes .I think its even more then enough to make that much money a day. Good luck trading again.