Is Day Trading For Me?

[Kafkaesque]

Hello all,

This is my first post on these boards and I am looking for a bit of guidance. I am only 23 and i have just recently become unemployed.

I have had a strong interest in stocks for the past few years and have done a reasonable amount of reading around this vast area. This has mostly been about long term trading and fundamental analysis. However over the past year I have been looking into day trading and trying to understand (slowly) some technical analysis and how spreadbetting works etc.

Due to a lack of funds however i have never been able to actively trade but feel it is something I could succeed at over time. I probably have at most £1000 to play with and realise that it would have to be used for spreadbetting.

The problem is I can't afford to trade full time at the moment and was wondering if its possible to start trading part time as I will need to get another job. I really want to try this full time but from reading other board members comments making any sort of profit will naturally take some time.

Regards,

Kafkaesque

 

[donaldduke]

With 1K you can trade as a hobby, betting 50p or 1 pound a point.

Its hard to daytrade via SB as the spread makes it hard to profit on an intraday basis,
the only exception might be Forex where the spreads are tight and the ranges large. The odds
are defintely stacked against you with such a small amount of money.

Also realise it will take years of real trading to get good at it ands it going to cost you 1000s in tuition.

 

[Roberto]

Certainly for intraday spreabetting with a bank of £1000, I'd say that your maximum stake should be £1 per point. (Possibly extending to a limit of £2 per point after you've had a good, steady, convincing run at it without significant drawdowns and when your confidence is boosted a bit.)

More importantly, you can get some practice in at either TradIndex or CapitalSpreads with a "play account" of fictional money, using the same trading platform that you'd use with real funds. This is a valuable (maybe even essential) experience. (In my personal opinion, stay away from Finspreads, but everyone has their own opinions and some people will disagree with this point!).

I agree with what Donald says above, for sure. (But you'll also probably find that a few of the more opinionated and less informed members here will reply to you in rather stronger terms than he and I!). Feel free to send me a PM if you wish. I've been doing intraday spreadbetting for a living for nearly 4 years now.

 

[Porks]

Hi,

Don't worry about the money, you may not be able to make much trying to beat the spreads with only £1000, but who cares.
The fact is, if you're any good, people will throw money at you, or if you're after work I'm sure they'll be a line of people wanting to use your skill.

Porks

 

[weyhey]

I would keep building your trading stake by other means and in the mean time read everything you can get your hands on. Once you get an idea what your edge is then study how it would have performed in the past. You will want to know your system inside out.
Paper trade your system while your building your trading stake. Work out what your longest losing streak could be and be prepared for it.
Most traders dont have a clue what their longest losing streak may be and give up on a system that could very well be profitable but because it has given them 8 losers in a row they ditch it.

I would suggest looking at spreads. They have reduced margins and great trends in otherwise trend-less markets. You dont need expensive software or data feeds. There are plenty of free sites that give spread charts. They are also less risky than outright positions.

Good Luck!

 

[CityTrader]

Hi,


The fact is, if you're any good, people will throw money at you, or if you're after work I'm sure they'll be a line of people wanting to use your skill.

Porks

Fact? forgive my confusion, but where are these "people" going to come from? How on earth are they going to find this punter? even if he turns £1,000 in to £100k in a year- you think the spreadbetting companies are going to hook him up with investors??


Fella, forget it, you are under capitalised, and you are trying to trade from weakness ( no job) rather than from strength ( it's what you want to do, and the time is right.) go back to work, study the markets punt in your spare time, but the chances of you succeeding as is, are slim.. sorry..

 

[Porks]

CT,

I agree the chances of success are slim (the chances are all the money will be lost)

Which is why anyone who can trade well are valued so highly.

My point is having little money is no reason not to start, if this is something you really want to do.

IMO,

Porks.

 

[trendie]

Kafkaesque,

It is possible.
( I have an account at D4F ( for experiments ), and I went from £1,000 to £2,600 from early Jun to mid-August. But then I went from £2,600 to £700 since then to current !! )

Please take advice from previous posts - lots of experience showing here.

Get a strategy. Believe in it. Understand the nature of drawdown.

( you will be tested when you have a string of losses, your account is down to £600, and your strategy triggers another trade. Will you take it ?? )

Expect to get wiped out at least once.

Spend money on books and courses. ( the cost of one course at, say, £500 could SAVE you many times that amount of losses in the coming years )

Dont try to chase losses.

Cut your losses.

Keep asking for help and advice.

Success as a beginner is being at break-even in 6 months.

You wont understand your own trading mortalilty until you take a BIG hit.

Dont be tempted to borrow money to "make up" losses.
( as stated before by Thirteen, you are under-capitalised )

You will of course ignore this, because you know some "secret" that we have failed to find on our combined years of trading. :cheesy:

good luck.

 

[Roberto]

I agree the chances of success are slim (the chances are all the money will be lost)

The trick is to lose "fictional money" first with practice accounts before trading with real money. But still, with £1,000 it's going to be difficult to limit yourself to £1 per point, and if you don't, the chances are indeed that all the money will be lost.

Which is why anyone who can trade well are valued so highly.

Agreed. I was at first surrounded by cynics and sceptics (also known as friends and family). But when they see you move house "upscale" two or three years later and living very well, suddenly they all want to "invest" on a profit-sharing basis (which I've never done, for anyone).

My point is having little money is no reason not to start, if this is something you really want to do..

Absolutely right.

Trendie's post above this one says it all, really!

 

[Strategic Trader]

only take advice from professionals who are full time, day in, day out, succesful traders - ignore the rest or do the exact opposite that the rest suggest

 

[FTSE Beater]

Hi Kafkaesque

Welcome to T2W

I have to say your situation sounds very familiar. I too started young and with £1000 to turn professional with. It is not easy.

The thing about trading, is it's an odds game - finding a strategy that puts the odds in your favour is a must, then you can move on from there. As the others have pointed out, £1000 is low to start, and almost impossible to do much with, and here is why:

It is an accepted fact that you:

• Don't risk more than 1% of your capital on one trade.
• Your looking for trades to make 3 times more than the potential risk.
• As a full-time trader 1% day in day out is achievable and realistic.

This means to you that, your risk is £10 per trade looking for a gain of £30. From that £30 winning trade must pay for an awful lot

• Datafeeds
• Charting packages
• Internet connection
• Wages etc.

Over time, you have to take money out of the account to live on, and this is where the crunch comes in. £1000 won't last you very long. Ask yourself how much you need to live on? Say you do well and make 1% a day. On £1000 that's only £220.19 come the end of the month.

In your position I would - Learn to trade, study the markets and use paper money while you hold down a full-time job to gain both capital and experience. Once the time is right and you're winning CONSISTENTLY , then you can switch to a part-time job to pay the basic bills and start trading to make a living. You will eventually get to the point, where the part-time job isn't worth doing, because your earning so much trading. This will take many years though.

I hope this helps.

 

[Trader333]

£1000 is more than enough because you should be able to turn £500 into £2.4 Millon in around six months and it is all very easy according to other threads on this site where this was achieved (allegedly), with comparative ease.


Paul

 

[Kafkaesque]

Thanks for the guidance guys. I think the general consensus is to get a job, save a bit more and continue working on a strategy. Think I will paper trade for a while and see how I do.

What do people consider a reasonable fund to start?

Cheers

Kafkaesque

 

[kao]

u have no chance go get your JSA

 

[Faris]

u have no chance go get your JSA

For anyone to say something is impossible will be very limited to what they can achieve in life.
Nothing is impossible.


Faris

 

[LION63]

Kafkaesque,

You will do well to take heed of the previous posts and it will probably hold you in good stead, however, I will qualify this by saying that we are all limited by our aspirations and dreams. Unfortunately, most of us lose the battle before the first salvo is fired, that is why people believe that it is virtually impossible to make money with a starting capital of only £1,000.

What you would have to do is get a job in the meantime to pay your bills etc. whilst you are trading part time. I know that many advocate paper trading but it is not the same as the real thing, many will disagree with this but that is a known fact. All you need to do is trade according to your pocket and build your capital as you go along.

Always remember that to make money you have to be much better than 90% of the other traders out there which then means that you have to chart your own course.

 

[weyhey]

Thanks for the guidance guys. I think the general consensus is to get a job, save a bit more and continue working on a strategy. Think I will paper trade for a while and see how I do.

What do people consider a reasonable fund to start?

Cheers

Kafkaesque

What is a reasonable amount to start depends on what your objective is.
If you are going to trade for a living, then how much do you need to live on. Add up your monthly expenses and include what income you would need to be comfortable.
Then if you can make 20% per year return on your funds your doing extremely well.
So for an example if you need £2000 a month to live on and your system should give you a return of 40% per annum, then your account size needs to be £60,000.

Now you can start to see why most traders fail in their quest to trade for a living.
I would keep saving till you have £10k, by then you should be confident in your system, then trade an EOD day system that you can update after work. then when you have built your stake to a level that can sustain you full time you can contemplate trading full time.

 

[harryc]

£1000 is more than enough because you should be able to turn £500 into £2.4 Millon in around six months and it is all very easy according to other threads on this site where this was achieved (allegedly), with comparative ease.


Paul

LOL , forgot about that already T333 . Just give half of your £1000 to that budd ( can't remember who it was ) Kafka and he'll make you at least that surely with his eyes shut , hehe . SORRY for that **** take , in a funny mood today

 

[ardhill]

What do people consider a reasonable fund to start?

There are lots of different opinions about that but...

If you go figure out a real strategy that works, allows for not getting it right, then see how much you can realistically make on your strategy.

So, if you need £1,000 a month to live simply add £1,000 to the cost of the software and datafeed etc and you have your profit goal.

If you have tested your profitable strategy, you will know how much it takes to achieve that figure. eg how many shares (or futures contracts, currency units etc) in how many trades. Then cost this.

Please do remember that the majority of people find it harder to trade profitably with money than with paper trading. So, allow for that.