Mad Bomber,
wow, good questions!, I agree with Bill and others, daytrading can be very dangerous and requires great discipline and support.
Since everyone is baring all, lol, I'll tell my story.
Started in late September with 35K. Spent the whole summer before reading every post on SI. I even developed notebooks on different subjects, etc. My knowledge of the stock market in general was good. Throw that out the window :); daytrading is a whole new set of skills and knowledge.
Also, I joined Ken Wolf's MTRADER trading room and watched for a couple of months before trading. So when I started I felt I was at a higher level than the average beginner and began trading with 1K shares. Almost lost everything. I had practiced demo (paper) trading but never really executed a stop loss. Not hitting stop losses cost me 13K the first two weeks.
So now I'm at 22K and very nervous because wife keeps looking over my shoulder. lol So what do I do? Short KTEL and instead of taking a quick easy 12K profit, I get greedy and hang on over weekend when news sends it to the moon and puts me 95K in the hole. Remember, I only had 22K in my account. At this point, I'm seriously thinking I might have a heart attack!!!!!
Well, Cyberbroker covered my ass big time. They kept my margin from being called and I got out with 9K 2 weeks later. I could have just as easily lost the 22K and been forced to declare bankruptcy!!!!
But, things, thank god, have changed since then. I am hitting my stop losses and have turned the 22K into close to 60K now. I feel I'm on the right track now and have had consistent profitable weeks for the last several weeks. However, I was very, very, very lucky in the beginning and very grateful to be on board with CyberTrader!!
Here's what I learned can make a successful daytrader:
1. Practice demo trading, including how you actually execute a stop loss, which buttons to push at what price, etc.
2. Get a good support system like MTRADER. Ken Wolf is an excellent teacher, plus guys like Bill Dywer have been very helpful with advice.
3. Get system in order before trading; i.e., computer, connectivity, etc.
4. When you start, only trade (like Bill suggested) in 200 shares for awhile, until you stop sweating when in a trade, lol If I had only traded 200 shares in the beginning, I would not have been at risk of losing everything.
5. You don't need the IQ of a genius, but you need to have some sense, be good at analysis of situations, and be very disciplined. The best traders I see develop a system or style of trading that works for them. For example, one trader like to only trade DELL. He knows that stock inside and out and knows when to get in and out. Others like high volitale stocks, traded with smaller shares. While others watch for high percentage trades which they can trade 2K shares at a time. Find a system that works with your skills and (most importantly) your comfort level.
6. Don't underestimate the mental aspects of daytrading! Whew, it can kill you. Make a bad trade. Learn from it and move on, don't wallow around in it. Don't play the shoulda, coulda, woulda. There is a stock everyday that if you coulda seen it, you'd be up 50K.
7. Hit stop losses, hit stop losses, hit stop losses!!!!!!!!
The key to daytrading in one sentence: Once you learn how NOT to lose money, you will begin making money!!
Good luck, you sound like you're definitely on the right track!
Brentsky
P.S. I can't say enough for having other funds of some kind to live on. I did and feel it allowed me to learn without forcing trades because I needed the money to live on. |
