Day Trading

[SandyD]

Thanks BB

[Taita]

Anyone does day trading with their company's money?
I would like to do that, anyone recommends training school/course ?

Why not try Milton Keynes Casino instead?

[mrv]

I enrolled on a 3 day course, it will basically go through strategies and products. We will not actually trade during the course. I will also try to open a dummy account soon to practice in my spare time.

After the course I will decide if this is for me or not.

BB what kind of trades / strategy do you use?

As Taita has suggested, you might want to try the casino instead. At least you can expect a free drink after dropping few grand.

Don't worry about strategy. Don't worry about charts, technical analysis, indicators, fundamental analysis, press releases, trends, news, reports, insights, market gurus and their thoughts, Fibonacci, Graham, Gann and the rest. Don't spend more than 10 seconds thinking about all that. It does not matter at all. Could sound strange and counterintuitive, but it really does not matter. Not at all.

Now onto the things that do matter. It's you and your head. The name of the game is Loss Control. This is where most folks lose their fortunes. The reason they lost it all was not that they haven't received the memo, did not read last income report or forgot to check an indicator. The reason they lost is they were chasing their losses and tried to turn them into winners. And the reason there are so few people that make it in investing is that only few people have the right mindset. Ask yourself, do you have the guts to stop and close everything after losing 30% of your portfolio? Do you have enough minerals to close a position if it goes 5% against you? It takes brass to be able to do so, much more easier said than done. What about leveraged markets like forex or spread betting, how would losing 50% in 5 minutes feel? Some people physically throw up, once or twice I nearly did too.

What to do: pick a market that you understand, stocks are good, choose an industry sector that you can relate to. You must know some industry already from working in it, might as well trade it too. Open a demo account somewhere, plenty of brokers available, familiarize yourself with controls, buttons etc. Then deposit some money you can afford to lose, maybe a grand or two, and give it a go. Set a stop loss limit, like must close if the stock drops by >= 5%, try not to lose more than 2% of your total capital in one position, see if you find it hard to stick to those rules. Initially forget about making any profit, first year's goal is to be about zero. Don't overdo demo trading, all your strategies, plans and knowledge will go out of the window the first time you will see a real loss. Try to avoid discussing market, strategies with other people, especially brokers or those selling investment advice - you need to have your own view that works for you, besides, those chaps know the same nothing that you do. Good luck!

[BlasterBates]

The name of the game is Loss Control.

This is it!!!!!!!!

Absolutely. Yup you have to master losses, and it's hard. No doubling up to make back your last loss. No hanging on to trades going through the floor. The trick to making money is getting out of loss making trades "pronto". This is exactly where all your efforts have to be, and to be relaxed about it.

I do disagree about the demo account not being "emotional" but maybe that's my mindset. I do actually feel the pain. I've set a goal of making 10 grand from 50 grand demo account, i.e. get to 60 grand and it is extremely difficult. After a few weeks I'm learning to cheer when I end the day 200 quid down.

I've got an account which enables me to to risk (and hence gain) small amounts, no more than a few pounds on a large market movement, but I don't really see the point in shifting to real money until I have a strategy that works. I'm still floundering....but I haven't reset the account since the 27. April and I'm up !!!!!!! not much but I am up.

Eventually if I feel I've mastered it I will start with piddling amounts and if the strategy works gradually build up the amounts.

Anyways I learnt the 1-2-3 reversal pattern at the weekend, so I'm busy practising

1-2-3 – The Foundation of Potential Change in Trend | DaytradingBias.com


Also candlestick patterns

Candlestick Patterns | Top 10 Best Patterns For Traders

I'll delve into it more. I've got a long long way to go.....

[sirja]

As Taita has suggested, you might want to try the casino instead. At least you can expect a free drink after dropping few grand.

Don't worry about strategy. Don't worry about charts, technical analysis, indicators, fundamental analysis, press releases, trends, news, reports, insights, market gurus and their thoughts, Fibonacci, Graham, Gann and the rest. Don't spend more than 10 seconds thinking about all that. It does not matter at all. Could sound strange and counterintuitive, but it really does not matter. Not at all.

Now onto the things that do matter. It's you and your head. The name of the game is Loss Control. This is where most folks lose their fortunes. The reason they lost it all was not that they haven't received the memo, did not read last income report or forgot to check an indicator. The reason they lost is they were chasing their losses and tried to turn them into winners. And the reason there are so few people that make it in investing is that only few people have the right mindset. Ask yourself, do you have the guts to stop and close everything after losing 30% of your portfolio? Do you have enough minerals to close a position if it goes 5% against you? It takes brass to be able to do so, much more easier said than done. What about leveraged markets like forex or spread betting, how would losing 50% in 5 minutes feel? Some people physically throw up, once or twice I nearly did too.

What to do: pick a market that you understand, stocks are good, choose an industry sector that you can relate to. You must know some industry already from working in it, might as well trade it too. Open a demo account somewhere, plenty of brokers available, familiarize yourself with controls, buttons etc. Then deposit some money you can afford to lose, maybe a grand or two, and give it a go. Set a stop loss limit, like must close if the stock drops by >= 5%, try not to lose more than 2% of your total capital in one position, see if you find it hard to stick to those rules. Initially forget about making any profit, first year's goal is to be about zero. Don't overdo demo trading, all your strategies, plans and knowledge will go out of the window the first time you will see a real loss. Try to avoid discussing market, strategies with other people, especially brokers or those selling investment advice - you need to have your own view that works for you, besides, those chaps know the same nothing that you do. Good luck!

That Sir, is one of the best write ups on trading, I've read anywhere! I tip my hat to you

[ChimpMaster]

A decent post MrV. You have clearly been through the pain and agony at some point in your life and I hope you have managed to grind your way out of it.

In most cases, a person either has the character for trading, or doesn’t, and it’s as simple as that. Many don’t - and will lose all of their funds and mostly disappear.

We’ve always known that markets are manipulated, at the macro-level and by organisations. Sarao proved that it could be done from his own home. So an individual who wants to become a successful trader will always be fighting against a skewed and bastardised market. And conspiracy thinking or not, they are out to get you and every other investor because this is a zero-sum game and you must lose for them to win.

In a few cases, a person will eventually learn how to manage his head over his heart. It will often take years of trading heartbreak and headstress, and cost thousands if not hundreds of thousands of pounds. But if the pockets are deep enough then at some point this person will hit that brick wall and stop caring – with his heart – and start thinking with his head. And then it will take years for him to get back to his break-even level, if he does at all. The price of his 'success' will have been more than money: it will have cost him time, stress, relationships, life opportunities and an irrevocable change in his character.

Is it all worth it? I’d say no.

[mrv]

I do disagree about the demo account not being "emotional" but maybe that's my mindset. I do actually feel the pain. I've set a goal of making 10 grand from 50 grand demo account, i.e. get to 60 grand and it is extremely difficult. After a few weeks I'm learning to cheer when I end the day 200 quid down.

I've got an account which enables me to to risk (and hence gain) small amounts, no more than a few pounds on a large market movement, but I don't really see the point in shifting to real money until I have a strategy that works. I'm still floundering....but I haven't reset the account since the 27. April and I'm up !!!!!!! not much but I am up.

Eventually if I feel I've mastered it I will start with piddling amounts and if the strategy works gradually build up the amounts.

Demos could be emotional, but they are nowhere near as emotional as real accounts are, at least for average Joe. There is a special feeling when you're about to enter a live trade and you realize that you could lose more here than all your pub expenses over the last month or year. There is more than one mind game to play with yourself when trading.

Strategies are not that important. Show a man a price chart and he can tell if the price is going up, down or sideways, and that is all one needs. Some like to add lots of indicators, the flashier the better, but before adding one it should be understood what those lines or bars really mean. If one sees it like "I buy when the red line crosses the blue line", he might as well toss a coin. And the most important thing about strategies is that any strategy is only as good as the person using that strategy. This is why I would rather spend more time with small, albeit live account, than play with demo, as effort and experience put into psychological side is more valuable than watching lines cross. Being able to cut losses short and let winners run, no matter how cliche, is much more important than getting more winners.

There is one thing you could do with demo, that is to understand what type of trader you are. Some people trade for action, they need to be opening and closing positions all the time. Some can buy and check on it 6 months later. Some need to check the terminal every 15 minutes they have no open positions, and every 2 minutes they have an open position. Some need to have some profit, no matter how smal, every day, some focus on a few bigger kills per month, some go for one or two homeruns per year. Keep that in mind when choosing your strategy, as different strategies suit different trading styles and different personalities, choose poorly and you will be frustrated all the time.

As for strategies themselves - there are millions of them, free ones usually as good as paid ones - and always remember, trader makes a strategy successful, not the other way around. Personally I find support / resistance levels with a moving average to be more than enough, but that's just me. You are very welcome to try your own approach, and after a couple of months of live trading you will start to realize what you like and what not. Just remember the quote from The wolf of Wall street: "Nobody knows if a stock is going to go up, down, sideways or in circles." No advisor, strategy or indicator will tell you that. Use your mind and don't stick to one opinion too much. Good luck!

[BlasterBates]

Personally I find support / resistance levels with a moving average to be more than enough, but that's just me.

hmm moving average seems to me to be a lagging indicator, do you only trade when the moving average is in the direction of the trade ?

I tried it but deleted it from the chart, seemed to be useless.

Yes at the moment I'm using trading ranges, but too many "break outs" and wobbling around erratically for my liking. I also need to optimise the point at which I take profits. Still I'm working at it.

What sort of return do you get on your capital? Are you day trading or trading over days/weeks/months ?

[uk contractor]

Elliot Wave & Fibonacci Retracement are all you need for day trading. Master those in conjunction with each other but only lose money you can afford to throw away that belongs to you & no-one else!

[mrv]

hmm moving average seems to me to be a lagging indicator, do you only trade when the moving average is in the direction of the trade ?

I tried it but deleted it from the chart, seemed to be useless.

Yes at the moment I'm using trading ranges, but too many "break outs" and wobbling around erratically for my liking. I also need to optimise the point at which I take profits. Still I'm working at it.

What sort of return do you get on your capital? Are you day trading or trading over days/weeks/months ?

Each and every indicator is lagging, except those which repaint themselves. I use MA to see the general direction, together with S/R levels to gauge the potential of the move.

There is no 100% foolproof method. Range trading is great for ranging market (surprise surprise!), but spikes and trends kill it fast. Personally I find trend trading (following) to be a better option, as then profit potential is much bigger (a stock can grow 100x in value, but range box is only that big). UK contractor is suggesting Elliot waves and Fibonacci - I think it's great only in hindsight, but of little help while situation is developing. Again, to each his own, if you can make it work - great.

Now I have moved to swing / position trading, I might keep my positions for a month or more. Regarding return I will say I have gained more experience than money. My personality is not best suited to this thing, I tend to go for a fast fix, just like a junkie, and battling this trait is my way to success - or to the next trait to battle Another thing I have found (again, speaking just for myself) is that having big trading account helps (think 100k and bigger) - people, myself including, get tired quickly when they have to follow some strategy for 10% yearly gains, if those 10% (while still very good result) means 50 quid. This tiredness leads to recklessness, attempts to make it big quick, and then some tears over lost money. Trading lets you meet your inner self in more than one way, be prepared. As I have said, no one went bancrupt because of a lagging indicator