New member with trading questions!

[tradingatcollege]

Hello everyone! I am new to trading and have been using Robinhood for trading and optionhouse to view charts. I have been having trouble with understanding signs for entry and exit points. Any pointers? I am really looking for a mentor (AKA- someone I can ask questions when having difficulties.) but only have a few hundred dollars to be trading as most of my money is allocated to paying for college. Currently a junior going for Business Administration.

 

[EnlightenedJoe]

I have been having trouble with understanding signs for entry and exit points.

Yes, you and almost everyone else. The reason is very simple: when you buy something they have to move against you to see if they can make a profit. This is their business. Since you have no way to withstand what they are doing, so you lose.

People often say it's all psychology. Perhaps it is true. Your psychology does not allow you to win because you cannot understand their business.

One thing about business is that it is supposed to make a profit. So when they sell you something, they have to, at least try, to make a profit. I wonder if they will teach you this kind of stuff at college ?

 

[timsk]

Hi tradingatcollege,
Welcome to T2W.

First and foremost, whatever you do - do not under any circumstances neglect your studies to pursue whatever trading ambitions you may have. Focus on your education, and if trading beats doing sex, drugs and rock 'n roll in your spare time, that's okay - albeit a little strange.

Secondly, don't mind EnlightenedJoe - he's one of our more - how shall I put this - 'left field' members. That's not to say that you should discount what he says. Far from it. At the heart of his post is the message that you're up against 'smart money', i.e. investment banks, hedge funds and proprietary trading firms who will gobble up retail traders like us for breakfast. That said, everyone has to start somewhere and to continue in ones quest to become a profitable trader, one has to start with the assumption that it is at least possible. Difficult, yes, but not impossible.

Regarding 'pointers', I suggest you read the FAQs and Stickies here on T2W, starting with this one: I’m New To TRADING – Where Do I Start?. Follow the links - and your nose - and ask any questions you may have along the way.

Enjoy the journey!
Tim.

 

[NVP]

Hey there ......I admire your desire to enter this field......but there are some caveats...

Firstly you are under capitalised .....
Secondly you have other priorities to focus on
And thirdly welcome to one of the toughest and most misunderstood businesses in the world !

Read the beginner threads ......and please don't do anything rash

N

 

[tomorton]

Yes, you and almost everyone else. The reason is very simple: when you buy something they have to move against you to see if they can make a profit. This is their business. Since you have no way to withstand what they are doing, so you lose.

Hi tradingatcollege.

You will hear sometimes that somebody bought something through their broker at 125.00 and the broker caused the market to drop to 110 and they got stopped out and then price went all the way to 135. And so the market's rigged and aren't these brokers wicked! And if it wasn't for wicked brokers and evil banks I'd be a millionaire. And if I can't be a millionaire you've no chance either. And so on.

This game isn't you against the broker or the bank or even the market. Its predominantly a campaign to master your own emotions, logic and reactions. You yourself will be your most constant opponent. Get on with this campaign in order to win the war - form a trading plan, plan each trade on chart evidence, learn money and risk management to protect your capital, make small trades, keep losses small and take small wins and just survive until you can top up your account. With hard work you can survive the apprenticeship and be a master trader.

 

[jjames69]

you need to come up with a trading system, one that is mechanical, and reduces emotion involved, and learn money management.

in a nutshell, here is an example of a system i use, (chart below)

i like to key off classic patterns. heres an example of some recent trading opportunities on a nasdaq 100 bar chart. notice the 5 reversal patterns? i like trading the pattern breakouts. remember patterns are not confirmed until they breakout. also notice the moving averages crossed over near the pattern breakouts by the vertical lines. when those two moving averages come together(i use a 20 and 40ma), they indicate a reversal or continuation pattern may be forming. the two indicators on the bottom are breadth indicators, the mcclellan ocsillator, and the Percent of Stocks Above 50 Day Moving Average. breadth weakness or strength helps confirm a patterns validity, and overall market internal strength.

when a trade-able pattern forms, as soon as price breaks above support(or resistance) decisively a limit order is placed, along with a stop order just below support, in case the breakout fails. a limit order may also be placed at the desired price target area. or some type of a trailing stop may be used.

i daytrade, so i'll have several trading opportunities each week. same principle just different time frames.

open a paper trading account and practice while you are in school.

be advised a large percentage of traders fail.

here's some info to get you going,

lots of good and free info on this site. i subscribe for about $11/month.

http://stockcharts.com/articles/

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns

here's a couple good books i favor,

http://www.amazon.com/Encyclopedia-Chart-Patterns-Thomas-Bulkowski/dp/0471668265

http://www.amazon.com/Technical-Ana...F8&qid=1462910704&sr=1-1&keywords=john+murphy

and money management

http://www.swing-trade-stocks.com/money-management.html

cheers

 

[EnlightenedJoe]

Hi tradingatcollege.

You will hear sometimes that somebody bought something through their broker at 125.00 and the broker caused the market to drop to 110 and they got stopped out and then price went all the way to 135. And so the market's rigged and aren't these brokers wicked! And if it wasn't for wicked brokers and evil banks I'd be a millionaire. And if I can't be a millionaire you've no chance either. And so on.

This game isn't you against the broker or the bank or even the market. Its predominantly a campaign to master your own emotions, logic and reactions. You yourself will be your most constant opponent. Get on with this campaign in order to win the war - form a trading plan, plan each trade on chart evidence, learn money and risk management to protect your capital, make small trades, keep losses small and take small wins and just survive until you can top up your account. With hard work you can survive the apprenticeship and be a master trader.

tradingatcollege: better still, ask timsk how it is done. He runs a trade forum and said he knows about trading. He should be able to demonstrate how it is done. How hard is it ? Of course, all the others can help too. With their combined forces, they can surely beat any bank or broker ?

What I am putting forward is that the banks and brokers are in it for business which mean they don't give you their money lightly - otherwise what is the point of doing business ? No matter what people say, they have no way of telling you in the most vague manner how they can do it, much less show you how to do it. So they tell you that you have to learn it yourself and when you lose it's your psychology that needs work. You will get this in every forum you go - everyone say they can do it but they can't show you in the vaguest manner that they are doing it. You can usually shut them up asking them to call out a trade. They'd never dare.

Here's a special technique to test people's claims. If they call one out, place a tiny real trade on it, as tiny as you want. After that, you can watch people squirm. The markets have that special effect when real money is involved. In fact, this is a good way to learn about the markets and how business is done in them.

 

[darktrade]

...but only have a few hundred dollars to be trading as most of my money is allocated to paying for college. Currently a junior going for Business Administration.

Focus on your studies and let no greed distract you. Market makers will be happy to take the money of anyone, professional or student.