I’m 24, in college, and am interested in day trading. I am on my second book reading up on it. I am interested in technical analysis. I am very good at math so the concepts come easy to me and the charts do as well.
I used www.freestockcharts.com as a resource for practicing. It provides lots of features including indicators, portfolios, and tools to draw trend lines in.
I have paper traded 5 days so far. Here’s how I did.
1. +4%
2. +5%
3. +4.6%
4. -0.5%
5. +1.32%
With about 15 trades a day tops and a lot of starting capitol I think I could make good money. I know I’m very green so there’s lots to learn. I don’t even have money to invest with yet anyways.
How do you think I’m doing? Is my profit so far good or to early to tell? What can I do to progress faster at trading and get good at it?
Trading indicators are best used along with money management and good risk control, using trading indicators alone will not enable you to be a successful trader, even if you learn everything about day trading indicators the market is just too random and unless risk is controlled, over time your account will slowly get wiped out, regardless how good a “trader” you think you are.
This question was about day trading indicators and there have been some pretty good answers that should help in your trading, and especially in relation to day trading indicators, the answer has been posted in the categories listed below:
Related posts:
- is there anyone out there who trades the market, and not necessarily specific companies.(daytrading/marketmove?
- expert trader give me some tips on trading ?
- what is the best set up for daytrading in stockmarket?
- Forex trading advice needed!?
- What can you tell be about day trading? Day traders only, please.?
- Can anyone give me some tips on currency trading ?
- How can I market my investment advice on the internet?
- What is a good method to daytrading in forex?
- I am interested in day trading will you tell me if my ideas are realistic?
- Linear Regression Indicator: Calculation in Microsoft Excel?
You need to have a plan to follow. For example, I use a 10% stop loss strategy. For example, if the stock is at $50 per share, the stop loss option would automatically sell at $45. I automatically sell when the stock goes up by 3% ($51.50 in my case).
That is my strategy and I like my own plan. You need to figure out your own plan. Day trading is very risky so be careful!
Great work on your first week! Dont think it will always go this way, keep learning and play smart.
Also remember, without 25k you cant daytrade more then 4 times in 5 days or the sec will lock your account.
http://en.wikipedia.org/wiki/Pattern_day_trader
Day Trading: The problem with Day Trading is that you are trying to leverage a lot of money (your money and money that your broker will let you borrow 4x as in 4 times your amount) to get a small gain. Paper trades are not even close to Real Trades.
You are playing a game against, brokers with more money, more education, more resources, faster execution, better software and etc to manipulate the market. They probably even sold you the book that you are reading on “How to be a Day Trader”. They are raking in the money from both directions.
This is what I want you to do. Go to a place where they teach Day Trading. First off, they probably won’t even let you on the floor until you pay a few thousand dollars for their training. But if they do, at the end of the day, talk to the traders and ask if they made any money that day.
It’s kinda like gambling, the allure of easy money has such a strong appeal, but nobody wins. Did I mention that they have more money, more education, more resources, faster execution better software to manipulate that market?
It looks like you you’re doing ok, but it’s totally different when your trading real money.
Remember also that making money on small caps is very high return and high risk, but if you learn how to do it there isn’t a better return. It’s limited though because you can’t maneuver with to much money, you won’t be able to get it sold like you want and could take a big down.
Real trading is probably much different than what you did, because you have to get an order bought and sold. You some times get screwed by network problems or even electricity blackouts that stop you from doing what you need to do and get you killed financially.
I am successful doing it, and I can tell you that most of these people are CLUELESS. I trade small cap high risk stocks and I’m damned good at it. Those who are not lose in that arena, simple as that.
I do one big trade every so often, waiting for a good one. I also jump in and out of others that are cycling and make a few hundred here and there. During the trading day I work hard at it. I watch and study and play the opportunities I find if I can get in right. I don’t jump unless everything is on my side, and I still lose some, but I win more. Most people lose, because of their psychology involved which hurts them the same way as it does in Vegas, and laziness.
I have an unfortunate suspicion that your mind may already be made up on this subject, but I’ll offer a few critical observations, regardless:
Your 5-day rate of return is self-evidently unsustainable: during the course of a single business week, your total return was 15.1%; the corresponding annualized rate is 1.151^52=153,400%. With a 1500-fold annual increase in your investment, a $1,000 outlay would reach more than $2 billion in two years. Do you find this realistic?
Even the weakest form of the efficient market hypothesis precludes above-normal returns from day trading, and technical analysis is universally dismissed by economists and business-school academics as little better than astrology.
It is always easier to gamble and pick winners when you have nothing invested. While a paper trade could give you an idea, it will be a lot different when actual money is at stake. It also depends on what caused the profits/losses. If you had 1 winner and 4 losers, and the one winner was just really good that day, what caused the winner and losers? Did they perform as you expected, or better or worse?
If you really want to do this, start small at like 20k or something and go from there. Be willing to lose all your money, because no matter how smart you think you are or actually are or how good the information you have actually is, there will always be unknowns that will change the situation and cause the market to act irrationally.
Think of it this way, if you have 200k, to make 40k to live on, you will need to be making 25%+ (do not forget capital gain taxes and trading expenses) per year. A good market will increase at 6% a year. While it is possible, I suspect for you to do this, I would think the effort needed to glean the information from the volumes out there could be better suited to actually starting a business. Just look at horse racing, you have all this information available, everyone has the same information, and while some are better than others, there is no such thing as a sure bet. Remember Big Brown? Just be cautious, and have a point both up and down where you walk away.
Those are excellent results if you can keep it up, but when you’re paper trading, remember to buy at the ask price, sell at the bid, and deduct commissions on both sides of the trade. If you don’t have enough capital, the commissions will take a big toll on your profits.
Forex is another option. It’s much riskier, and takes longer to master, because it’s highly leveraged. But the main advantage is that you can start with $2,000 or less, and because you don’t pay commissions, only spreads, you’re not penalized for taking many small trades as opposed to one large one.
Remember that the two biggest forces working against any trader are fear and greed. When you’re winning, just keep doing what you’re doing, don’t try to take advantage of your winning streak. And when you’re losing, don’t let it bother you, just analyze why you lost, and try not to repeat it.
Too early to tell. The market goes through changes of trend (obviously) as well as between chop and trend. You should trade for a while so you know your skills are consistent.
*capital
15 trades per day is good though for your results.
Advice – develop a sound risk management system. A simplified version of mine is a set risk (starts at 0.5% paper and then 0.5% live per trade) and day drawdowns are at 2x risk (below) while risk increases are 6x risk (above). If you don’t understand you should do some research on R:R.
Get as many Technical analysis sources as you can – it will be a very very long time before you know enough that the majority of new material isn’t worth your time.
No money – Paper trade first for a while. You can also consider forex where the commissions are spread-based. Use sources like investopedia tutorials, trading books, trading forums (research past TA forums, sometimes you strike gold).
Getting better – try splitting your time between research and trading. I personally also do study/review time and also just sit back and watch the market on some days (rather than trade) because it helps me apply concepts better.
Forget it. Unless you have money you can afford to lose, you shouldn’t even be considering this.
It is pretty early to tell, but granted if you can sustain those gains, youre gonna be AWESOME, no joke.
You got the basics down, stick with technical analysis. A good book is Technical Analysis of the Financial Markets by John Murphy.
I also recommend reading up on mathematical finance/financial economics. I think with your background, it could help a good amount