Hi CRICKET; I took a somewhat informal training at
Block in Seattle. Mostly you are going to be on your
own.
The best feature of the Block office are the low tickets
for small sizes. If you SOES into 100 shares, and SOES
out, the total (round trip) commission is $4. Commissions
for the use of an ECN are higher, and commissions for
1000 shares are typically about $30 round trip, unless
you use an ECN that spits out a lot of tickets, in which
case it can get expensive. Anyway, the low ticket
costs allow you to get your feet wet without sticking
your neck out.
Another thing I like is the DEMO mode. I used that for
a bit over a month before logging in live.
The Block office is in the north part of Seattle.
The suggestions that you not trade DELL or hold positions
overnight are for the same reason: Overtrading.
Overtrading means taking on too great a position for your
account size. For instance, if you have $50,000 (the
suggested account size at Block), then you need to
limit your loss on any one trade to no more than 1% or
$500. This means that you can take a 1/2 point loss
on 1000 shares, or a 5 point loss on 100 shares.
The problem with DELL and also with overnight positions
is the gap. DELL can rip against you, leaving you unable
to get out of a losing position for several dollars. Overnight
positions are similar. But overnight positions and DELL are
definitely high return ways to trade. DELL always moves
a reasonable amount.
My suggestion is to limit the size of your positions when
holding overnight or trading volatile stocks like DELL.
For instance, if you usually trade 1000 shares at a time
during the day, you should restrict your overnight positions
to 100 shares. One of the guys in the office bought MANU
when it sold off the other day. The next day it gapped
down another 19 sticks! Fortunately he only had 100
shares. This is a good illustration of the problem with
overnight positions. On the other hand, another guy
kept 1000 shares of YHOO overnight and made 10
sticks. (Or was that AMZN?)
Well here goes! Wish me luck! And strength!
-- Carl |
