New! Risk Taker! Keen! Confused!

[Jigs]

Hello Guys,
Nice to have found this site. I joined a few weeks ago, and have read posts on occasions to get some insight. OK. Here it is. I am new to the trading game. I have recently opened an online trading account, and want to invest, I consider myself a risk taker, and will not hesitate taking risks. I have bought some shares already (FTSE 250, Small Cap), but the activity is too slow for my liking (having to wait weeks to see any substantial changes), but I want to take my trading to a more active level. As in trade daily. I have briefly read about CFD, and spreadbetting, and vaguely understand it can be risky, but the returns can be much more than initially invested.

Now, what I am asking is, is some light on best option available to the likes to me!.. Here is what I feel are the options.. I would be very very grateful if you can comment on my options and suggest any others..

-Carry on investing in FTSE, i.e. buy/sell shares.. perhaps invest in AIM..
-Look into CFD, spreadbetting, if so..what kind of CFD's shares/equity/forex..etc..
-Any other investment products..futures/options...iam not sure what this is..or whether there is anything else, I can get my hands on..bearing in mind I want to be quite active on a daily basis..

I am sure, some of you must have been in this same situation in the past, and share the same mindset as me, so sharing your experience would be priceless.. Look forward to your replies..

 

[wasp]

US stocks... fast, high risk and big profits! You can probably spread bet them too.

 

[Jigs]

Hi wasp, thanks for this. I will enquire with my Online brokers, I dont think I currently have access to investing in US.. Do US stocks swing significantly..definitely worth a view, I'm sure there must be a currency benefit too (in medium/long run) - not my appeal though. What about far east..

 

[the blades]

Hi wasp, thanks for this. I will enquire with my Online brokers, I dont think I currently have access to investing in US.. Do US stocks swing significantly..definitely worth a view, I'm sure there must be a currency benefit too (in medium/long run) - not my appeal though. What about far east..

I'd second Wasp. US stocks swing much more, and are far more liquid, hence lower spreads. Look into an account with ineterctive brokers - I think it's $5,000 to open an account (can't remember) - then $1 to trade each stock.


You can spreadbet the larger US stocks through IG / CMC and probably others, but probably not the smaller stuff (you couldn't a few years ago, hence my transition from SB for US stock).

You could also hedge your currency exposure with a spreadbetor other, if you want to avoid another risk.

Cheers,
UTB

 

[Tileman]

Hi,
From my experience if your new to the trading game from what you have said you will probably blow your account,at least get a feel for how the market works before even considering committing any money and then start small.In my opinion daytrading US stocks with no market experience is not the way forward.

Regards
Graham

 

[Jigs]

Graham, thanks for the opinion on US stocks. I have bought some fairly reliable FTSE Small Caps, and strongly believe in doing some prior research in the company and the trend it has. I think I will definitely keep a close eye on US stocks before investing, seeing who swings significantly, market reputation..business model etc..

Guys, when you refer to US stocks, what are you refering to..(kinda new, hence need some clarity) Nasdaq/NYSE stocks only right?. only the purchase of shares right? , as opposed to the leverged products..

I also intend on looking into CFD. are you guys into this. I got a normal account with TD waterhouse. they seem ok. They also offer CFD, and US stocks, so will take a look, is there anything / or anyone else I should look at for this?

 

[wasp]

Run a search for the member 'Naz'... He is the main US stock trader active on the boards at the moment (I know of - apologies to others but he stands out the most as I think about it) and have a look at a few of his posts.

 

[the blades]

Hi,
From my experience if your new to the trading game from what you have said you will probably blow your account,at least get a feel for how the market works before even considering committing any money and then start small.In my opinion daytrading US stocks with no market experience is not the way forward.

Regards
Graham

Perhaps Graham, but I don't think anyone suggested daytrading, though that's clearly an option.

Cheers,
UTB

 

[Jigs]

What are the best products or shares to trade on an intra-day basis.. US stocks i gather from the info above.. Any thoughts on CFD'S, Futures/Options.. Commodities/Forex..

 

[Naz]

Hi Jigs,

The only way to trade and enjoy it on a daily basis is US stocks. Everyone else goes to sleep and gets bored, (you know I'm only joking guys

I was in Starbucks after an hours trading today all done and I'll pick it up again tonight for the next leg.

The range on MA today in the first 30 mins was 1,000 spread bet points, lots of the guys are on POT that's just fallen 1,100 spread points in the last couple of hours.

I'll attach a chart showing the DOW against a momentum stock from last Friday. You will notice that when the Dow bounced it made about 90 points but I have overlayed it with one of the hot momentum stocks for the day and you cn see it ran 1,100 points.

It's moves like this that have kept me day trading for a living for almost the last 10 years. If you click on the "NAZ" icon at the top of this post and then click "go to Naz's home page you" you can see all my chat in the News section. including a post today showing one of the US guys who made a days money in just 7 mins today.

Lots if us use Direct access, but the moves are so big now that the spread bettors/cfd traders can get in on the act as well.

 

[Mr. Charts]

http://www.trade2win.com/boards/us-stocks/10573-evening-trading-us-shares.html

jigs,
Have a look at this thread - lots of examples, worth reading imho.
Richard

 

[Naz]

Here are the comments of one of the spread bet traders who was trading POT in the last few hours, starting off with £2/point and moving down to £1 per point.

I attach his comments to me whilst I was trading. Nice trade well done.

Naz

 

[RPEX]

From my experience if your new to the trading game from what you have said you will probably blow your account,at least get a feel for how the market works before even considering committing any money and then start small.In my opinion daytrading US stocks with no market experience is not the way forward.

I'm inclined to side with this view at the moment, but that would be to suggest that short term day trading doesn't rely hugely on luck and a quick PC/Connection speed.

I think there's still a lot you can learn from trading ordinary shares on a small scale before moving on. You mention fundamentals like business models etc. i'm not sure if that matters as much for the type of daytrading you're looking at, although i know many US day traders sometimes focus on a single stock (where it is obviously handy to know about that Co.) I'm not sure what TD Waterhouse are offering you, but maybe getting more data would be useful, like Level 2 or direct market streaming prices, so you can get a better feel for the price action.

Day trading AIM and smallcap stocks sounds boring just reading about it. Besides, i don't think you can learn much from the price action on those type of stocks, you can learn a lot more about day trading and your psychology from blue chips.

One other thing: In your other posts you mention different types of instruments. I think there is some misperception here - you should get a grip of the underlying first i.e. whether you trade the AMZN CFD or future or spreadbet it, what matters is your view of the underlying be it short term or whatever. These instruments are merely "tools" - which you can adopt depending on your risk appetite (read: how much of your hand you want to burn in the process)(read: the degree of your conviction). You should get a feel for the uynderlying shares first, technical/fundamental/whatever, then look at what yoiur time horizon is (i.e. can you finance a leveraged position for 3 months?), the degree of leverage in £/point, the commission, the tax liability etc.

As for options, at this stage i don't think you'll be able to fully understand it (run before walk etc.). If you do your head may explode. Sure you may make a day's profit in 7 minutes but i'll bet it wasn't a shrewd intentional play, and it will probably be followed by loosing 3 weeks profit inside of an hour.

Like
Clubber Lang: I predict: PAIN

 

[Naz]

With the utmost respect to other traders but most of the comments I hear about day trading are from people that dont understand the modern approach to what we do.

Over the years day trading has changed in a big way, when I first started in the late 90's we were still trading in fractions? At that time just one style was being promoted, today like anything there are different styles. I happen to enjoy fast early moves but many leave that alone and let the market sort itself out for 20-30 mins before they join in. Just like the spread bettor I posted above, by the way his stock went on to run 1,400 points from his entry which was a simple break of the days low. I attach the move.

Others will join the market after work in the UK and this could be considered another style.

In recent years I've even designed some special charts to help the day trader and this could be considered a very gentle style, that's what that spread bettor was using in my above post. I'll repost here.

I'm also a UK swing trader as well, believe it or not and my day trading has helped me in that style of trading an awful lot. For instance a day bar to me could be a five min bar, a quick out of charcter move by a mm in an AIM stock and I'll pick it up and decide if I want to be a buyer, because they do the same moves in day trading.

With day trading you learn all the skills and discipline to keep you in and winning in this game. Look at my next post, it's five hours into the day and I've done 4 trades, my first two trades get me nowhere, my next makes me a 1000 points, the next is hard and I pack up. Here I'm using discipline to keep the amount of trading down. Yet still picking up a 1,000 spread bet points for the day.

I've developed a very easy stlyle for making sure I dont give away my early gains at the beginning of the day, I go to Starbucks so I dont over trade. I take a break and come back refreshed so my emotional feelings are in check and I can look at things rationally and not emotionally.

We may whoop it up and have some fun on our large moves because we know we get them an awful lot, but we are sensible traders who trade in a sensible way and understand probably more than most the skills that it takes to trade successfuly.

 

[Naz]

What we are doing day trading US stocks is not luck it's a skill that can help us in trading anything. We learn what really works and not what everyone else thinks works.

The momentum gives us great profits when our positions run and as long as we keep our losses small our overall account should be in profit. If it's a bad day we'll end up with some small losses and walk away from our screens.

Here is a mornings trading using one particular style, total 1,300 points or pips. The trades were
-2 +134 +609 +54 +234 +308 -6..............total approx 1,300 points or pips.

Look at the losses -2 and -6 against the huge 1,300 point profits, that is not luck, I knew exactly the moves I was playing.

With momentum helping me when I'm right, I can afford to get some trades completely wrong and still be up on the day. All I need to make a living is just 100 spread bet points a day. The momentum I can get on US stocks can give me that in just one trade.

Yes, I have taken one trade in a day, made my days money and walked away from my screens, because I know it's how much is in my account at the end of the day that matters not the amount of time I spend at my screens.

 

[Naz]

Its the same every day I just go where the action is. It wasn't rocket science to be looking at POT today, it was a monetum stock from yesterday. All I did today was play the bounce and what a nice move it was. Because it's a momentum stock it moves hundreds and hunreds of points instead of 20 points here and 30 points there.

I attach the screen shot of the move and my commentary to the guys when I exited, the time stamp is by my comments so you can see exactly where I got out. After that it's time for tea.

Most day traders would love to be taking 200,300,400,500 points/pips from a move, who wouldnt? but like anything it's those feelings which go on inside us that hold us back.

Today one of my students took on the same move as I did. He got out at 10.03 getting a little more than me. I attach his exit and the time stamp, so you can view it on the chart.

 

[Lee Shepherd]

Great trading Naz

 

[wasp]

Being a tight git, where could I find free charting for US stocks? Or is that not possible?

There is some on one of my metatraders but only a few on there....

Also, is there, or could someone post, a list of the stocks and their abbreviations/codes (or whatever you call them?!?!?!)

 

[wasp]

I have.......

AAPL
AIG
AMGN
AMZN
BAC
EBAY
JPM
MSFT
ONXX
LVLT
WFC
GOOG

with WHC Trader 4.0 - Water House Capital. Their YM and NQ futures etc are correct (and free) but I'm sure that only a small list.

 

[Naz]

Thanks Lee.

I use www.Tradestation.com and DirectAccessElite for day trading.
These are US companies and most guys use Tradestation or e signal for charts.
Some use Interactivebrokers for trading.

For swing trading the UK market I use Share dealing accounts, self select ISAs, SIPPs, CTFs / Selftrade Investments and Investment software - ShareScope - award winning trading software for charts.

Some of the momentum stocks at times are BIDU POT FSLR MA GS AAPL RIMM

For spread betting which lets me do the UK and most US stocks I use ClickGlobalTrading