My first day trading.

[dtcracker]

I've been studying trading for a while now and think that day trading fits my personality best so that is what I have been focusing on for the past couple of months, and today was my first day of live trading. I learned so much more than I ever learned paper trading or sitting here reading about strategies. I was trading mostly citigroup (NASD:C). At the end of the day I was down about $200 and I can see why but don't really know how to fix it. My two biggest hurdles right now I think are fear and greed.

Fear. I would go long at what I thought was a good position and it would continue to go up for a few ticks, around 5 or 10, then it would start to retrace and the time and sales window would be full of flashing red and I world get scared so I would sell at a small profit, or actually considering commissions none at all, but then five or ten seconds later it would shoot back up.

Greed. I would be in a position and it would be down a couple of ticks and I would sit there and wait for it to come back up so I could break even or not take such a big loss and it would keep going down and I would convince myself that it had hit bottom and was due for a rebound and I would keep moving my stops down just a couple more ticks so I could stay in.

Can any professionals out there give me any advice? I know this isn't something to be mastered in a day or even a couple of years but anything would be helpful at this point. Maybe someone can shed some light on how you go about picking stocks the day before.

 

[Splitlink]

I've been studying trading for a while now and think that day trading fits my personality best so that is what I have been focusing on for the past couple of months, and today was my first day of live trading. I learned so much more than I ever learned paper trading or sitting here reading about strategies. I was trading mostly citigroup (NASD:C). At the end of the day I was down about $200 and I can see why but don't really know how to fix it. My two biggest hurdles right now I think are fear and greed.

Fear. I would go long at what I thought was a good position and it would continue to go up for a few ticks, around 5 or 10, then it would start to retrace and the time and sales window would be full of flashing red and I world get scared so I would sell at a small profit, or actually considering commissions none at all, but then five or ten seconds later it would shoot back up.

Greed. I would be in a position and it would be down a couple of ticks and I would sit there and wait for it to come back up so I could break even or not take such a big loss and it would keep going down and I would convince myself that it had hit bottom and was due for a rebound and I would keep moving my stops down just a couple more ticks so I could stay in.

Can any professionals out there give me any advice? I know this isn't something to be mastered in a day or even a couple of years but anything would be helpful at this point. Maybe someone can shed some light on how you go about picking stocks the day before.

I'm not a pro, which is who you asked to answer, but I am a survivor, if that is any use!

You are entering the markets at an unfortunate period for newcomers. Newcomers need a trending market, which is what this one is doing, I know, but there is a lot of panic in it. Beware of panic. To take advantage of this, at this time, is to sell into strength, where the law of probabilities is on your side, rather than to look for bounces that are not.

I've been reading a lot of posts from those who have been expecting a bounce off of lows. Well, the last one to go for the stock indices was the January one, yesterday.

Be very firm with yourself on stops. You decided on it before you entered the trade. Why change it? You have to be comfortable with that loss before you go in. What often happens, though, is that the trader kids himself that he will not be stopped then, when he is close, he gets windy about the depletion of his account if it happens. So he moves it down, just that few points more. That's bad discipline. Cure yourself, fast.

Split

 

[new_trader]

"I would go long at what I thought was a good position"

This is your problem. Trades based on what you think seldom work ouk.

 

[new_trader]

You are entering the markets at an unfortunate period for newcomers. Newcomers need a trending market, which is what this one is doing, I know, but there is a lot of panic in it.

I disagree split. A good analogy would be weather and climate. Weather leads climate and you don't need to know the climate in order to recognise what the weather is doing now. That is what day trading is mostly about.

 

[Paul71]

This is your problem. Trades based on what you think seldom work ouk.

Precisely. Couldn't rep you, NT, so i posted this.

 

[Paul71]

I disagree split. A good analogy would be weather and climate. Weather leads climate and you don't need to know the climate in order to recognise what the weather is doing now. That is what day trading is mostly about.

It's no use, NT. The thread starter will be taken rough shod straight to the hourlies and shown a wedge.

 

[Shanghai]

This is your problem. Trades based on what you think seldom work ouk.

Yep. dtcracker are you sure that you have a system at all? This should tell you among other things your rules for entering a trade, when to exit, where to place your stop loss and what your position sizing should be. If you can't write down your system in sufficient detail that you can go away and leave it with someone else to trade on your behalf then you are quite likely trading impulsively.

Having a good system (and following it) will hopeful reduce the level of fear and greed in your trading.

 

[Crap Buddist]

oooouus Sen sai......

yeah what them lot are saying cracker, but going through the process, and personally I do think its a process, then you may find that your thinking is /will be aligned with the market .

Especially if you focus on 1 market 24/7 , well you know...

Benefits- are that you will get a feel of how that market moves. Wait a minute I've heard its rubbish to trade on feelings ?

ahh yeah but I'm talk the markets feelings, after 6-12 months of you watching the chart, you are half brain dead mate, in fact you could close your eyes after looking at the chart and see it tic on....!

You can shut your eyes and replay the entire days action, I do (and this might sound like some trippy sh!t now) Chart Tai Chi...

Ehhh Chart Tai Chi ?

Well yeah geeze its like traditional tai chi in a way but, instead of doing rising clouds, or crazy crane legs, using my arms and body, I replay the flow of the chart ,gracefully ,like a Kungfu Ninja .

I swooping in doubles tops, spin around with the fake outs, thrust skywards, arched tops and swooping bottoms..... all the peaks and troughs...

Now all this chart tai chi gets the trader to tune into the market, you blend in with it. AND its also a physical exercise. So you can do this exercise standing up away from your screen and young grasshoppers can and should practice it sitting down in front of their chosen market, this should be one market, liquid, and should be studied day in day out..

Again sitting down let your arms track the prices, palms facing outwards when tracking an uptrend ,palms inwards when tracking the downtrend. (fingertips about 2 inches apart)

Ehh... Chart Tai Chi Master ,how do I know the up trend or downtrend? aha. dont think about it let you hands find their own position, it may take you a few weeks of practice, but after a while you may notice as you hands and arms track the market that your plams will rotate from facing out to inwards as the market rolls from putting a top in place! And you have nothing to do with it... trippy or what ?

And the Chart Tai chi just flows on....... my arms naturally do big swooping arches overhead for the tops and sweeping bowl like patterns for the bottoms. But thats nothing to do with me, its the Chart Tai Chi taking over..

I find using a 60 second chart good for fluidity.

P.S. Well warning, do not use this technique over NON FARM PAYROLLS release... I was in traction for 4 weeks once !

Anyway thats Chart Tai Chi. hope you like it buddy !


Sayonara.

CB
Chart Tai Chi Master.

 

[Splitlink]

I disagree split. A good analogy would be weather and climate. Weather leads climate and you don't need to know the climate in order to recognise what the weather is doing now. That is what day trading is mostly about.

Well, I'm pleased that you are going well, NT. I based my comments on my own shorting procedure since the beginning of June and have no complaints about my results. In fact, anyone going long has been going against the main trend which,I have learned, does not suit my own style of trading.

To each his own.

Regards Split

 

[dtcracker]

Thanks for all of the advice.
Split, I know I'm cured of adjusting my stops. I actually didn't do it that often, but I realized it was a mistake when I did.

NT, if you don't trade on what you think what do you trade on? Feeling?

CB, I think I'll give that tai chi a go. It sounds like a fun exercise.

Shanghai, I know I have a system. That doesn't necessarily make it a good one unfortunately. I think I need a little help on my stops. Any advice?

Paul, I don't think everyone’s advice will come of no use. And hopefully I won’t be dragged anywhere and have wedges shown to me. Remind me to not travel the same alleyways as you at night.

 

[Summit8222]

As a professional I think the best advice I can give is find yourself a good team to trade with. Make sure they have similar basic ideas as to how to trade the market. Since you are just starting out and probably don't have a real feel for what type of trading best suits your personality trying trading with as many different groups as possible till something clicks. I know for me that I would be a basket case by now if I didn't have people to bounce ideas off of in the hard times.

 

[dtcracker]

As a professional I think the best advice I can give is find yourself a good team to trade with. Make sure they have similar basic ideas as to how to trade the market. Since you are just starting out and probably don't have a real feel for what type of trading best suits your personality trying trading with as many different groups as possible till something clicks. I know for me that I would be a basket case by now if I didn't have people to bounce ideas off of in the hard times.

Hey Summit thanks for responding. You are probably right that since I am just starting I don't have a real feel for anything, but I do have one question. How do you find a good team or even any team to trade with, and how do you differentiate the good teams from the bad ones?

 

[Shanghai]

Shanghai, I know I have a system. That doesn't necessarily make it a good one unfortunately. I think I need a little help on my stops. Any advice?

To improve on your stop placement (and many other areas of trading) then the best thing I can suggest is record keeping. It's dull and doesn't appear to achieve much but it's vital. As you day trade it probably isn't possible for you to record each trade but maybe 1 in 5 or one in 10 (and of course not just winners).

There seems to be a problem with the forum at the moment that doesn't allow me to post attachments but recently I reviewed my records of an account I set up to test a new strategy. I posted this in another thread. The actual account didn't really go anywhere and I made a 1.2% loss in 6 weeks. But I went back and reviewed my records of all the trades I made and concluded that my stops had been placed too far away. I tested the same trades assuming that I have placed my stops closer (1ATR) and by buying and selling at exactly the same place my profit would have been 5.4% in 6 weeks. Now if you compound that over one year, what seemed to be a poorly performing account could have turned into a great account.

My point is really that I could only have discovered this if I had kept good records so I would encourage you to do the same.

 

[timsk]

I was trading mostly citigroup (NASD:C). At the end of the day I was down about $200 and I can see why but don't really know how to fix it. My two biggest hurdles right now I think are fear and greed.
Can any professionals out there give me any advice? I know this isn't something to be mastered in a day or even a couple of years but anything would be helpful at this point. Maybe someone can shed some light on how you go about picking stocks the day before.

Hi dtcracker,
Welcome to T2W.
Like Splitlink, I wouldn't describe myself as a pro', far from it in fact but, like him, I am a survivor. There's good news and bad news in response to your comments about fear and greed. The good news is that you're not alone. Essentially, the markets are fueled by these two little nouns. Traders who fail to control them tend to be controlled by them. That's only bad news if you're in the latter category, but it's good news for those camped in the former category as it provides lots of opportunity for profit.
The bad news is that to detach yourself from fear and greed and to observe them impartially without engaging your own emotions is, arguably, one of the holy grails of trading. But, like all holy grails, it's a tad elusive and many fall by the wayside in their attempt to master it.
A couple of questions if I may about your first day trading: how many trades did you make and what percentage of your total account does the $200 loss represent? You may not be comfortable revealing the answer to this second question on a board like this, in which case, what were the share sizes of your trades?
Cheers,
Tim.

 

[Summit8222]

When I started trading I started with a prop firm (Bright Trading) and was fortunate that there were 4 other traders who all started within 6 months of each other and we are all still trading today. So that really helped that none of us really had an experiance and were all willing to share. To find a group today I would suggest either posting on a board like this, or a general interest meet up board and try to meet people in your area. It will probably take a lot trial and error but you will get lots of information.

As for how do you know if the people you are trading with are giving good advice, remember, what is working for another trader may not work for you, and vise versa. In this business success is measured in Dollars, so people who are willing to show you there yearly P&L are the people who you want to work with long term.

Remember to, as you start out any of this information that you recieve, trade it with as small size as possible first to see how it works for you.

 

[new_trader]

NT, if you don't trade on what you think what do you trade on? Feeling?

A very good question. You should only ever take a long or short position when you are 100% certain that it is the right thing to do at the time you do it. This does not mean that your trade has 100% chance of winning!! This does not mean you go long because you think prices are going to advance or going short because you think the market is going to decline. Your decision is based on good reasoning and a sound methodology acquired through hard work, study and practice. Don't focus on making money, focus on being right. The money will follow.

 

[new_trader]

Well, I'm pleased that you are going well, NT. I based my comments on my own shorting procedure since the beginning of June and have no complaints about my results. In fact, anyone going long has been going against the main trend which,I have learned, does not suit my own style of trading.

To each his own.

Regards Split

Yes, each to his own but your comments don't make much sense to a day trader...well they don't make sense to me. A day trader who is biased before making a trade is apt to make bad trades. I bet I could show you a daily chart for the ES and you wouldn't be able to tell me whether it was during a bull or a bear market. Like I said, if it's raining and you need to go out you don't stop to think what the climate is before getting your umbrella....do you?

 

[Splitlink]

I don't know why they don't make sense to you because I think that, looking at EOD charts of the main indices, I am getting a down signal. Still, as I said, we are all different. I know that I was biased, as you say, towards shorting today and, for what it's worth, I am biased tomorrow as well.

Today I did not enter any trades until lunch time, when I shorted the SP500. My plan was to sell into strength. I think that the result was satisfactory. I acknowledge that a lot of day traders bought the indices this morning and made money. Congratulations to all of you who did. But I try to trade my plan and that does not include trading against the main trend.

Good trading

Split

 

[dtcracker]

timsk, Thank you for the advice. I don't mind answering any questions about my trading. I don't think I have much of a chance to grow if I can't entertain a dialogue with those more experienced than me. I made quite a few trades that day. It was around 25. Too many I think. Most of them were washes after accounting for the broker and ecn fees. Some were in the money. The $200 was 2% of my trading account. That is actually my stop for the day. So no more trading after I lose $200. I was trading 500 shares at a time.

Summit, Thanks again. I'll look around for one of those groups. Maybe I'll get lucky and find a good one. It never hurts to look.

NT, that is a very good point that I will have to keep in mind. I know I have the hard work and studying part down. Hopefully the methods and reasoning will follow. If you don't mind me asking what is your current methodology and reasoning that makes you 100% certain that you are right? Sorry in advance if that is too personal of a question.

Split, Another good point. One that Jack D. Schwager states as a rule in his book Stock Market Wizards. You have to trade your personality. I have heard both new_traders and your arguments before. Some say if ABC index is down only look for shorts and some say it doesn't matter at all. As for what I believe. Well I truly believe I'm not experienced enough to decide which one fits me right now. Hopefully learning the answer won’t be too expensive.

Well For those of you still interested my second day of trading is over. The results today were the same yet quite different. It was another losing day but this one would have been a winner but for one mistake. It started out fine. I was calm. I had a plan and I was sticking to it, and it was working. I was up $250 or so. I opened a long position around 11:24 market time, and I'm guessing because of the hour the stock started to side shift. I wasn't getting close to my mental stop loss or my profit target and everything was generally slow. I walked away from my screen with no stop loss order set because I figured I could run to the bathroom and be back and everything would be the same. WRONGE! When I came back the stock was down hard. I panicked. Oh **** what now. I knew what to do. Get the F out, but I didn't. I sat there in a state of hope. Hope, that like some mythic phoenix, my stock would come screaming out of its own ashes. In reality I wasn't stagnant for long but it was long enough. By the time I got out of the position I had lost all my previous profit and was actually negative overall. So another lesson learned. One that I knew, but I guess I had to learn it the hard way. I could only imagine if I had come back and my internet was down.

I do have a couple more questions though.

1) What kind of investigation is possible as far as when a company is going to make a news announcement and how can you stay on top of the news in a stock you have a position in?

2) What kind of research is available the day/hours before the market opens to determine what stocks will be making moves instead of just moving sideways?

I don't know if I worded that last one right. I'm basically looking for a way to determine what stocks to be looking at throughout the day.

 

[timsk]

Hi dtcracker,
A very candid response to the questions posed. Unfortunately, they confirmed my worse fears.

I made quite a few trades that day. It was around 25. Too many I think. Most of them were washes after accounting for the broker and ecn fees. Some were in the money. The $200 was 2% of my trading account. That is actually my stop for the day. So no more trading after I lose $200. I was trading 500 shares at a time.

I'm the first to admit that my maths is poor, something of a handicap in this game. Even so, by my calcualation, you've got about another 48 days of your trading career left which will see you through to mid September, at best. While you're forward testing your strategy (which is what anyone does when they go live with real money for the first time), I suggest you cut your position size drastically. I'm forward testing a new strategy myself right now and I'm risking 0.1% of total equity on any one trade. Not 1%, but 0.1%! This is why I'm a survivor and you won't be, unless you cut your position size. True, commissions become more expensive, but that's a price well worth paying, IMO.

I suspect you're also overtrading. Presumably, you have a scalping type strategy where you expect to be in and out of trades very quickly. Nothing wrong in that in principle. However, as you yourself have pointed out, commissions and slippage etc. will really criple you unless you're very, very good. Cutting the number of trades will, I suspect, help a lot. Two simple ways of doing this are:
1. reduce the universe of stocks in your watchlish
2. trade a slower timeframe (fewer trades with a longer duration)

. .I could only imagine if I had come back and my internet was down.

This can and WILL happen. Only last month I had a power cut mid trade. Even though I have a UPS - it failed too! It took at least 5 minutes to get through to I.B. on the phone and it cost $30 to have them close the position for me. Be preparared, this will happen sooner or later.

I do have a couple more questions though.
1) What kind of investigation is possible as far as when a company is going to make a news announcement and how can you stay on top of the news in a stock you have a position in?

2) What kind of research is available the day/hours before the market opens to determine what stocks will be making moves instead of just moving sideways?

I don't know if I worded that last one right. I'm basically looking for a way to determine what stocks to be looking at throughout the day.

1) MarketWatch - Stock Market Calendar - Financial Calendar - Finance Calendar
This provides scheduled news announcements. Breaking news about individual stocks is tougher. Your data provider may offer something as part of your package; failing that, you're looking at a subscription based service of which this is probably the best known:
Briefing.com
2) This is where a service like briefing.com really comes into it's own for finding the stock whose CEO and Chief Financial Officer have gone awol and have been sited on a a paradise island that has no extradition treaty with the U.S. Or the pharma company that's just got approval to market a new drug with 100% success at 'curing' baldness. Otherwise, it's good ol' fashioned T.A., spending your mornings trawling through stocks looking for patterns that suggest a major breakout is imminent.
Enjoy!
Tim.