Made my first big profit paper trading!!!

[sopodo]

Hi,

I had been paper trading all this week and had some good days and bad days. But when I finally put everything I have read and learned together I then successfully made yesterday $760 in the last 80 minutes of market hours. That was the total profit after broker commissions. Which in this case would of been $79.20 on 16 trades (8 buy and sell trades). I was buying and selling 1 stock 8 times with $2,500. At 1 point the price was too good to miss so I did another order for an additional purchase of $2,500 of shares.

Anyway so I learned a lot and it was a really great experience and would like to see what Tuesday brings.

The great thing was I was really reading the market, I was using google finance candle stick charting on 5 minute and 2 minute intervals. I was looking to get in and out of the uptrend and downtrend. So I was looking for the upthrust and downthrust, daddy long legs.

I noticed some things which I don't quite understand

1. When I did a limit order I would choose "day" and then set the limit price. I was buying penny stocks and so I chose 0.0055 to purchase. The live price was 0.0054 and then the order was filled straight away after I pressed confirm and bought at the exact live price of 0.0054. Then when that price went up to 0.0056 and I would do a limit order to sell at 0.0056 but then when I pressed the confirm button it suddenly sold the stock even higher at 0.0058. So I made a 0.0004 profit per share. I had loads of shares because I purchases $2,500 of stock. I was running this simulator in realistic mode and the quotes are delayed by 15 minutes. But in real world conditions would a buy and sell limit order buy or sell at a higher or lower price than you had originally set? If so that is fantastic as I make more money?

2. I was only able to buy and sell during 1 day 5,000,000 stocks in that particular company. When I tried to buy more a message popped up saying that I had traded the maximum allowed share in a day which is quoted at 50% of a companies average daily volume. In real world conditions is this the same, can you only buy 50%? I imagine every stock is different, if I bought into a company who had far more stock than the penny stock that I had bought into then obviously again 50% of their average daily volume may be a lot bigger than 5,000,000 stocks. So what goes?

3. How can I find out from reading a candlestick chart about the average volume of shares given per person, if that exists as I talked about in the above?

Any help that can be given to my questions?

Many thanks in advance

 

[pboyles]

Hi,

I had been paper trading all this week and had some good days and bad days. But when I finally put everything I have read and learned together I then successfully made yesterday $760 in the last 80 minutes of market hours. That was the total profit after broker commissions. Which in this case would of been $79.20 on 16 trades (8 buy and sell trades). I was buying and selling 1 stock 8 times with $2,500. At 1 point the price was too good to miss so I did another order for an additional purchase of $2,500 of shares.

Anyway so I learned a lot and it was a really great experience and would like to see what Tuesday brings.

The great thing was I was really reading the market, I was using google finance candle stick charting on 5 minute and 2 minute intervals. I was looking to get in and out of the uptrend and downtrend. So I was looking for the upthrust and downthrust, daddy long legs.

I noticed some things which I don't quite understand

1. When I did a limit order I would choose "day" and then set the limit price. I was buying penny stocks and so I chose 0.0055 to purchase. The live price was 0.0054 and then the order was filled straight away after I pressed confirm and bought at the exact live price of 0.0054. Then when that price went up to 0.0056 and I would do a limit order to sell at 0.0056 but then when I pressed the confirm button it suddenly sold the stock even higher at 0.0058. So I made a 0.0004 profit per share. I had loads of shares because I purchases $2,500 of stock. I was running this simulator in realistic mode and the quotes are delayed by 15 minutes. But in real world conditions would a buy and sell limit order buy or sell at a higher or lower price than you had originally set? If so that is fantastic as I make more money?

2. I was only able to buy and sell during 1 day 5,000,000 stocks in that particular company. When I tried to buy more a message popped up saying that I had traded the maximum allowed share in a day which is quoted at 50% of a companies average daily volume. In real world conditions is this the same, can you only buy 50%? I imagine every stock is different, if I bought into a company who had far more stock than the penny stock that I had bought into then obviously again 50% of their average daily volume may be a lot bigger than 5,000,000 stocks. So what goes?

3. How can I find out from reading a candlestick chart about the average volume of shares given per person, if that exists as I talked about in the above?

Any help that can be given to my questions?

Many thanks in advance

1. It seems you got some slippage which in this case was in your favour. However it could just as easily have been the other way round ie hitting your stoploss and getting you out at a worse price.

2. I find this hard to believe but in any case if you are trading something with very light volume you are asking for trouble, who is going to be buying when you want to sell your thousands of shares?

The main issue is that on your demo account these problems may not be apparent. In other words the examples you gave are probably totally unrealistic in the real world. It really doesnt tell you anything about trading with real money in real time.

 

[sopodo]

1. It seems you got some slippage which in this case was in your favour. However it could just as easily have been the other way round ie hitting your stoploss and getting you out at a worse price.

2. I find this hard to believe but in any case if you are trading something with very light volume you are asking for trouble, who is going to be buying when you want to sell your thousands of shares?

The main issue is that on your demo account these problems may not be apparent. In other words the examples you gave are probably totally unrealistic in the real world. It really doesnt tell you anything about trading with real money in real time.

Hi,

Many thanks for your reply

To answer your first point, okay so I experienced slippage and so it could affect me next time If I chose a stop loss which the other day I had not.

Point 2, it seems perhaps I should trade in stocks which have a huge volume, wouldn't you agree? If I want to trade the way I'm doing currently how many shares do you think that the company that I'm buying stock in needs to have?

Further to point 2, from google finance it said the stock I was buying had a vol/avg of 173.52m, mkt cap 563, 129,542.00 shares. Now I was buying $2,500 at 0.0054 which is 462962 shares. So based on the above figures isn't that amount of shares easily able to be sold?

Also to add to the above, day traders cannot go short on penny stocks which probably doesn't help liquidity either especially when buying that amount of shares mentioned above when selling.

I kindly await for a reply

Many thanks in advance

 

[bangkoker]

If you are paper trading to learn, why do such unrealistic large amounts? I doubt you will go from papertrading to buying and selling half million shares in a day.

Why not think about what size account you are likely to have and then with realistic money management loss levels see what you can do. Just my 2pence worth but seems a more useful way of learning.

 

[Chartsy]

you set a buy limit order above price?

what spread are you paying on that?

in REAL markets, buy limits are only below price, otherwise you'd be immediately filled, and could then sell at the ask and gain the spread.
same goes for sell limits- only above price

 

[sopodo]

1. It seems you got some slippage which in this case was in your favour. However it could just as easily have been the other way round ie hitting your stoploss and getting you out at a worse price.

2. I find this hard to believe but in any case if you are trading something with very light volume you are asking for trouble, who is going to be buying when you want to sell your thousands of shares?

The main issue is that on your demo account these problems may not be apparent. In other words the examples you gave are probably totally unrealistic in the real world. It really doesnt tell you anything about trading with real money in real time.

If you are paper trading to learn, why do such unrealistic large amounts? I doubt you will go from papertrading to buying and selling half million shares in a day.

Why not think about what size account you are likely to have and then with realistic money management loss levels see what you can do. Just my 2pence worth but seems a more useful way of learning.

Many thanks for your reply

Yes you are very right, I have decided to practice in more real conditions. With less than $1000 which is what I can afford.

 

[sopodo]

you set a buy limit order above price?

what spread are you paying on that?

in REAL markets, buy limits are only below price, otherwise you'd be immediately filled, and could then sell at the ask and gain the spread.
same goes for sell limits- only above price

Many thanks for your reply

I was told by a trader to set the buy limit over the live price. for instance if the live price was 0.0048 they told me to set it at 0.0055 and then the simulator would purchase at 0.0048. So I did this but later decided to set the buy limit price at 0.0049 and it always buys at the live price of 0.0048. I think the reason the trader said to set it at 0.0055 was because of the volatility of the stock. He thought in case the stock was to rise from 0.0048 to 0.0055 in seconds then setting 0.0055 would protect me as I could get the order filled on movement of the stock. So anyway your saying if the live price is 0.0050 then I should set the limit order for 0.0050?

what do you mean by what spread am I paying on that? I thought spreads are for financial spread betting. I am not doing that. I am practicing day trading penny stocks.

I always set sell limits at the live price and my orders are filled.

 

[DeonLee]

Thanks for big profit. Be watchful of penny stocks Investment Scams: Don't go for investment in a company about which you don’t have enough knowledge.

 

[Pento]

couple of things

1. as pointed out above only trade in realistic size. no point buying a trillion shares in demo when with real money your account can only finance 5 shares. along with this use some sensible money management; for each trade dont risk your whole account. Find a risk level you are happy with. Some people wont risk more than 2% on one trade whereas others are happy to risk 50%.

2. in regards to you buying 50% of the daily volume in company XYZ: in real markets as long as you have the money you can buy as much as you want (until around 20% of the market cap before the competition authorities start getting concerned). Im guessing the demo restricts it as if you did buy 50% of the volume then the price would move in that direction so making the buying of a trillion shares on demo a useless learning tool. When the market is bid for 2 shares and offered for 2 shares imagine the impact if you go and try to buy a million of them.