to beginners: just my 2c on paper trading / trading small...
Remember that one should never think they will automatically start trading 500 or 1000 shares when they are doing it for real, or that they will test the system on 100 shares and then jump to 1000 shares as soon as they have a few weeks of profits.
In my opinion, getting bigger the right way takes time - like months. You can't be in a hurry to make money. I think I'm doing it the right way now (hopefully) - I *know* I didn't get bigger correctly in the past.
When I re-started daytrading this last year, I was doing 100 shares. At that time I was so paranoid that even losing 1/8 hurt. The reason was because I wanted to achieve profitability, and trading 100 shares limits profits too. I have traded much larger amounts of shares in the past, but I was with a firm and it wasn't my money :-)
When I started venturing into the more volatile stocks I would sometimes do 20 or 30 shares of CMGI, and exit the trade 10 shares at a time. Paying a flat per share commission helped matters. 100 still felt too big, up until around March. I've been increasing the size lately and have done 200-400 shares of stocks like ITWO, RFMD, and AMCC. Would have scared me before but now I'm comfortable, and only when I'm very confident in the market direction, and usually after I already am up on the day. 100 shares of anything (under $150/share price) now for me is a "probe" trade. 1000 shares of anything is too frightening for me, at this point. |
