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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: LemonFlavor who wrote (8840)	6/11/2000 11:18:00 AM
From: aldrums	Read Replies (2) \| Respond to of 18137

LF, I am sure there are other traders on this thread that can give you a better response to your questions than I, but while we're waiting for those answers here is my advice. 1. While you still have money left in your account, DO NOT TRADE WITH MONEY!! Paper trade only. 2. Start tracking your paper trades and equity curve in a spreadsheet. Start with a balance in your paper trading account that is equal to your current balance in your real account, and trade only stocks that you can afford with your balance. Make sure you also track commissions. Write down the Date, Entry/Exit time, stock, shares, buy price, sell price, and/or short price, cover price, stop loss, point gain/loss, $ profit/loss, commission, and Actual $ profit/loss minus commission. Subtract all paper trades from your account balance and keep a daily log of your total profits and losses. Review all your trades, especially the losers. 3. Make/take your paper trading as seriously as your real trading but don't worry about overtrading. Here is your chance to develop your own trading style. 4. Develop trading rules and NEVER break them, even while paper trading. Practice (paper trade) as you would perform (trade with money). 5. For heaven's sake do not worry about missed opportunities. Concentrate on current opportunities. 6. Do not trade with real money until you are making a profit paper trading. Expect your daily profit from trading to be only half (if that) of your daily profit from paper trading. Best of luck, Alex

To: LemonFlavor who wrote (8840)	6/11/2000 11:33:00 AM
From: TraderAlan	Read Replies (1) \| Respond to of 18137

LF, Stop trying to make money and instead concentrate on trading well. That's not the same thing. I really think that new traders should not even worry about profits for the first few years that they are learning. Worry about survival. Then when you finally survive, worry about making a living at it. Lower the beta on your stock picks to control risk and lengthen your holding period to compensate for the lost volatility. For example, I think WCOM and GBLX make great learning vehicles for newer traders. Your experience is common. The problem though is that your comments don't get to the point of why you are having a problem right now nor what you believe will effectively address it. I think that you know the answers to both of those questions already. The bottom line for many who started in the mania last year is that they don't understand market stages or how to adapt trading strategies as conditions change. Alan

To: LemonFlavor who wrote (8840)	6/11/2000 12:00:00 PM
From: Jon Tara	Read Replies (1) \| Respond to of 18137

"I will have a profit by 11:30 but then trade most of it away later in the day." At the risk of sounding trite: don't trade after 11:30! "Doctor, doctor, it hurts when I do this..." Quit while you are ahead. (SOUNDS easy! :) ) Also, I've adopted a "don't go back to the well" philosophy. I used to go back to the same stock several times the same day. It's pretty easy to take a nice profit and fritter it away and even turn it to a loss that way. Particularly if you caught a nice move that caught other traders unaware. Problem is, more and more traders are focusing on that stock, and as the day wears on it will get more difficut to trade. I will still go back to a winner (say I make a "perfect" sale at the top of a rally, and then it pulls back), but with the first subsequent loss, (which I will limit to a very small loss), I will walk away from the stock. Move on to another one, or quit for the day. Now, I know others here will probably say that you can trade any stock, any time. It just takes practice. I'm more pragmatic. If you KNOW that a certain pattern doesn't work for you, DON'T DO IT!

To: LemonFlavor who wrote (8840)	6/11/2000 12:29:00 PM
From: booters	Respond to of 18137

I have had the "Bad trades after 11:30" problem myself from time to time so I will address this while you are waiting for the real traders. When I look closely at my problem I usually find a simple answer. The markets are usually better between 10:00 and 11:30 or so and then slow down. I get bored,(sounds like you do to) and start looking for trades. I end up forcing them, trading moves or patterns I would never touch if there was something good going on. For me the answer was two fold. (1) I went to a longer chart period and therefore get less patterns (but more meaningful ones).(2) Sat quietly and enjoyed the warm feeling that came over me as I realized I was trading better instead of just trading (very good for ego and confidence). Sounds like you are off to a good start for the most part. boots

To: LemonFlavor who wrote (8840)	6/11/2000 8:49:00 PM
From: Dave O.	Read Replies (1) \| Respond to of 18137

One thing I didn't see you mention was playing the short side of the market. Trying to play only the long side as the COMPX corrected over 35% was tough ... can't force trades when the market is going in the opposite direction. If you're not currently one who trades the short side I'd suggest that you consider such ... that's a good part of the game. If you don't feel comfortable with that then look at paper trading shorts for a bit. Bull markets don't last forever. Dave

To: LemonFlavor who wrote (8840)	6/17/2000 12:58:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 18137

Sounds like you were all over the map as you were being buffeted around and confused by the market. I think your major obstacle is you! You need to develop better discapline and focus. And instead of abandoning a plan that worked for you, I think it is better to augement or change it. This may mean learning to identify the markets your approach works and only trade those markets. Attempting to be "right", which is what you are trying to do by making profits in all types of markets regardless of initial objectives, plan, and experience, is vain and unrealistic. I feel I can say this to you because I have been there. :-) Without developing patterns to your behavior that will allow you to work on your focus and discapline, you will always find yourself overtrading and gambling. Overtrading also can mean that you are attempting to scalp, which is also supported by comments later in your post. As mentioned earlier by a very reputable poster who scalps successfully, this is not a good approach to be used by the beginner. Scalping also takes a very high degree of the focus and discapline that you need to be working on. Perhaps later in your trading career you may want to try scalping. Additional observations: 1. IMO you will not survive your learning curve when you are undercapitalized or feel that you have time working against you, like needing to pay the bills. You should not be trading until these two problems are resolved. 2. One reason traders give profits back is they end up getting a bit overconfident. Once again, this is a focus and discapline problem. Another reason is that the market later in the day tends to slow down and congest leading to "false" signals. This is another major downfall of beginner (and experienced) traders alike, and that is being able to recognize when a market has changed, in particular when it is moving into congestion. Congestion can be a source of many "false" signals for the trader that prove not to be false when the congestion is recognized by the trader. 3. As far as the three areas you noted you need to improve in which is trade less, be more choosy, and possibly quit when you have a decent profit (in other words meeting your daily profit objectives), there is one most important thing you failed to mention. That is having a PLAN. You have referred to it as a trading style that you are having a problem settling on. Since you attempt to be trading without a well-defined and proven plan, you are going to lose you money. And changing ill-conceived plans on essentially the prevailing behavior of the market will move you down the road to disaster even more quickly. So my solution would be to STOP trading, reevaluate your personal situation to see if it is feasible to trade at all, and then develop a trading plan which can be proven before committed money of any significance. And certainly NOT use your failures to motivate you into day trading. If you cannot handle position trades due to a lack of focus and discapline, day trading is an entirely different animal that will eat you up alive and spit you out, leaving you to wonder what happened to you as you look at your empty account. I have seen many frustrated people go in this direction for similar reasons with the delusion that they will have more "control" in their efforts to solve their problems. But they fail to include one very important part in their thinking, and that is themselves. The real problem is to be found with themselves. Day trading definitely brings out the worst of a person in their approach to trading, for the success in this approach to trading counts much more heavily on the psychology of the trader themselves. While position trading is mostly finding a workable plan that a person can execute profitably in the market, day trading for the most part is all about the person themselves. And any flaws that can influence your performance will come out in full living color. Finding a workable plan turns out only to be LESS than half the problem. I hope this helps. You DID say that you did not want us to go easy on you? :-) The best of fortune to you! Bob Graham PS: There is a book by Mark Douglas you may be interested in that covers the psychology of the trader themselves that is very illuminating. I am attempting to find a complimentary book that goes into concrete and very workable ways in how a trader can modify their behavior.