I briefly mentioned here that I was able to make $3k/$4k per day - that figure isn't yet consistent, but will be shortly, I'm ironing out one or two hang ups with my trading style which can lead to massive losses.
I've already directly answered those who asked - but maybe this info will help other newbies - I really hope so.
First, please be very careful - you can get wiped out very easily.
Buy as many books as you can on day trading and read them BEFORE you start! Get "Hit and Run Trading: The Short Term Stock Traders' Bible" by Jeff Cooper. It costs $100 from Amazon.com. I just got it today after a 3 week wait. It is absolutely necessary to read and study it before proceeding. Don't worry if you don't do the 50 trades to save the $300 MB fee - that is peanuts compared to the money you will lose if you trade for trading sake.
I lost $100k about a week ago because I didn't understand certain things - and believe me, I'm no fool. I might have even known what I was doing wrong, yet I still did it. It happend very quickly.
For instance, you hear people say over and over again, if the trade goes against you, get out, take the loss and move on. They beg you to do that. But you think, "No, I only trade in stocks that are moving up, so if it goes down, all I have to do is wait a day or so and it'll go back up". And yes, maybe this works once or twice with a stock like DELL - no real problem. But then, you are in another stock, one you don't know too well, but it was flying up and you got in and made a few thousand dollars. This is nice! So, you do some more (remember, this isn't DELL - this is a stock you never heard of). Next you're in a few thousand shares and it goes down 10 points. This has never happened to you before. As far as you know, everything goes back up. So, you wait. Down another 10 points. You've got 3,000 shares, gone down 20 points. $60k!!! This one is ENMD - never coming back up.
My friend, don't say it can't happen to you. It happens every day.
For instance, in the last 2 days CFON went up nearly 300%. It is a junk stock. If people don't know this company, they might have thought it was going to go even higher. Today, it tanked from 15 1/2 to 10 1/2. Tomorrow, it'll go down to maybe 5 or 6. Maybe some played it correctly. Some longs may have lost $10k-$20k. But now a new one comes along: XYRB. Today it went from 3 to 8. Tomorrow it will go to maybe 15. The guy who played CFON thinks its the same. He will now short 1000 XYRB at say 10. It'll go up to 12. So, he'll short another 1000. Then it'll go up to 15. Its called "doubling up" instead of having to get back down to 10 to break even, by shorting again at say 15, the stock only has to get back down to 12 1/2 to break even. So, he shorts another 1000 at 15. Now, he has 3,000 XYBR short. And the price is rising each hour. He thinks it must come down, because CFON came down.
But, he doesn't know that CFON was junk. XYBR is for REAL! Next day, the price is $20!!! Now the guy gets phone calls from MB Trading - they need him to put another $30k in his account to cover the shorts.
A little knowledge is a dangerous thing. Don't rush into this. Slow down. Take your time. NEVER DOUBLE UP! If you made a bad trade and its going in the wrong direction GET OUT QUICK!
Thats all I can say. |
