Newbie to Trading

[Dander]

Hello all

First off, great forum, lots of useful info, thank you

Second off, I'm new to trading, I would like to make it my career eventually when I have gotten some good experience with trading however working out how to get there is a different story. I follow the financial news religiously, I'm a subscriber to the FT and WSJ (have been since uni), I have made good calls in the past on companies I feel with bounce back but that's long term rather than short term so this is, to me, a different ball game.

I have read that paper trading is a good way to start and I'm looking around and I can't seem to find a good site to go with (or does it not matter) and am looking for suggestions on that front.

Mainly I'm thinking of opening an account with IB (using my US LLC) and trading equities (DAX, NASDAQ/NYSE, LSE) on a part time basis, more towards investing rather than actual day trading, which I feel would give me the best opportunity to learn about trading if I weren't to go through the paper trading route first, which is best PT or Real?

As far as strategies go this is where I'm tripped up, I'm seeing so many different ones I can't for the life of me ascertain how to create my own strategy, as much as I'm analysing I feel I'm still leaning towards long term and not quite grasping the short term idea mentally so if anyone could help there, that'd be great.

Finally I'm on a MacBook and am expecting a new iMac within the coming days, I'm reading all sorts on the web about needing 'x cores at x GHz wih x RAM and x monitors', my new iMac is a 3.5GHz i7 Quad Core machine with 16GB RAM as well as the one monitor (as it's an all in one), would this be suitable for my long term goal for day trading as a career? I'm of course going to Boot Camp it and install W8 (in case anyone was wondering).

I'm going to continue to read the stickies and other posts but I'm hoping you wonderful people can also offer some advice :cheesy:

Cheers.

 

[dr.blix]

It's flat out gambling if you don't know how to trade, so prob not a good idea to use cash. And if you want to use cash and 'invest' in companies, then that wouldn't really be trading either.

Keep it simple, pick a couple of instruments, bash out a strategy as you go along based on what you're trading and the time-frame you're trading in.

Learn and have fun with a virtual trading account. Plenty of time so no need to rush.

 

[drtro]

I like trading 1 m charts on stocks with a lot of volume. Less risk per trade. With the right strategy, you can be highly consistent and those small gains add up.

 

[dr.blix]

That's interesting drtro. Can I ask how you manage to make a profit with just a 1:1 R/R?

Wouldn't that R/R demand a very regular positive outcome to each trade in order to ensure you're at least over 50/50 outcome profit wise?

 

[drtro]

That's interesting drtro. Can I ask how you manage to make a profit with just a 1:1 R/R?

Wouldn't that R/R demand a very regular positive outcome to each trade in order to ensure you're at least over 50/50 outcome profit wise?

1:1 risk reward intraday (1/5m). My setups longer term are different. I did the candlestick patterns for about 6 months in sim at 90% success. Since I began live, it's been about 77%. I have moving averages, price, and volume. I don't trade by any "magic moving average" method though. Just use them in terms for support and resistance. If I have an engulfing pattern at $100 with say a $0.20 stop making my profit $100.20 but there is a moving average at $100.10, I likely won't take that signal. It could hold resistance and reverse, make a stop loss move before moving higher, etc. Just too many variables that makes me not want to take the risk.

It really depends on the day. Like today, I made $0.10/share loss. Only traded once. I bought AAPL and had a 10 cent risk reward. Held it over a hour with no hits then it stopped me out for a range extension. Didn't feel today was worth trading anymore. Usually within 1 1/2 hours, I could have made 3-5 trades in AAPL. Tomorrow will probably be the same with BABA opening.

I mostly take engulfing patterns off peaks and valleys. Occasionally I'll take them out of boxes/triangles or any other breakout/breakdown pattern as well. It's just all candlestick math and chart patterns.

 

[drtro]

Actually made $0.68/share on TSLA just a few minutes ago. So today wasn't bad.

 

[dr.blix]

That's really interesting drtro, thanks for sharing.

Not wanting to sound like a pedant, but strictly speaking isn't there only one actual engulfing bullish candle (the last one) in your chart? The first three open above the close of the final red candle and not below the close. Or can the definition of engulfing candles change depending on TF?

 

[drtro]

That's really interesting drtro, thanks for sharing.

Not wanting to sound like a pedant, but strictly speaking isn't there only one actual engulfing bullish candle (the last one) in your chart? The first three open above the close of the final red candle and not below the close. Or can the definition of engulfing candles change depending on TF?

To me, engulfing means a higher closing high than the previous candle, or lower low for bearish. I guess it depends on who you ask. I've never had anyone question what engulfing means before. I also sometimes take equal looking bars if they are large enough. I'm not sure what the exact name is. Like these two candles. It wasn't engulfing, but it didn't make higher highs either, and it's momentum was almost as strong as the previous candle, but a reversal. I'll take candles like these on longer time frames as they tend to happen a lot especially on 15 and 30 minute. My stop would still be the high with 1:1 risk reward. I look at various candlestick patterns, but my favorite is engulfing or whatever you want to call it. It's always trustworthy unless there's some sort of moving average interference or some variable. That's why I like the peaks and valleys of range extensions that usually happen at the end of each 15 and 30 minute bar, but today didn't have much movement so I was stuck. Despite being in between 3 moving averages, I played TSLA before close knowing they wouldn't matter much in terms of resistance since it's closing bell momentum. Eyes were glued to Level II.

 

[lloydbee]

Hello all

First off, great forum, lots of useful info, thank you

Second off, I'm new to trading, I would like to make it my career eventually when I have gotten some good experience with trading however working out how to get there is a different story. I follow the financial news religiously, I'm a subscriber to the FT and WSJ (have been since uni), I have made good calls in the past on companies I feel with bounce back but that's long term rather than short term so this is, to me, a different ball game.

I have read that paper trading is a good way to start and I'm looking around and I can't seem to find a good site to go with (or does it not matter) and am looking for suggestions on that front.

Mainly I'm thinking of opening an account with IB (using my US LLC) and trading equities (DAX, NASDAQ/NYSE, LSE) on a part time basis, more towards investing rather than actual day trading, which I feel would give me the best opportunity to learn about trading if I weren't to go through the paper trading route first, which is best PT or Real?

As far as strategies go this is where I'm tripped up, I'm seeing so many different ones I can't for the life of me ascertain how to create my own strategy, as much as I'm analysing I feel I'm still leaning towards long term and not quite grasping the short term idea mentally so if anyone could help there, that'd be great.

Finally I'm on a MacBook and am expecting a new iMac within the coming days, I'm reading all sorts on the web about needing 'x cores at x GHz wih x RAM and x monitors', my new iMac is a 3.5GHz i7 Quad Core machine with 16GB RAM as well as the one monitor (as it's an all in one), would this be suitable for my long term goal for day trading as a career? I'm of course going to Boot Camp it and install W8 (in case anyone was wondering).

I'm going to continue to read the stickies and other posts but I'm hoping you wonderful people can also offer some advice :cheesy:

Cheers.

Hi Dander,
if you are relatively new and yet to develop your trading style then unless you have cash to blow, Virtual Trading is a MUST DO is it not. I trade fulltime and I still to this day virtual trade new ideas and the odd potential trade I see when I have no spare capital in fact every single week I would have something being virtual traded.

Being unable to currently create your own trading ideas or strategy is exactly why you should be virtual trading. It will help you develop your trade time frame as well as entry/exit ideas. Best advice, keep it all simple... very simple.

If your long term goal is to be a day trader (good luck with that) then IMO why would you not want to invest in your business of trading and run more than a single monitor. Having multiple monitors allows you to click and scroll less and allows you to instantly see more information as well as other potential trades. Trading faster can mean the difference between a losing trade and a big losing trade. Processors and Ram requirements depend on your platforms usages and how heavy it is.

Forget share trading and it's nickel and dime profits and come to the dark side... Options .

Lloyd

 

[dr.blix]

Eyes were glued to Level II.

Aah, I used to like Level 2 when I was trying to trade equities. I was paying for the live feed from the LSE and I loved seeing the orders coming up.

 

[Dander]

It's flat out gambling if you don't know how to trade, so prob not a good idea to use cash. And if you want to use cash and 'invest' in companies, then that wouldn't really be trading either.

Keep it simple, pick a couple of instruments, bash out a strategy as you go along based on what you're trading and the time-frame you're trading in.

Learn and have fun with a virtual trading account. Plenty of time so no need to rush.

Yes that's what I've been thinking, I'm going to go with virtual trading first for a while to get a good handle on it as that way I can make many mistakes and still be okay financially until I work out a good day trading strategy that suits me.

Thank you for your reply

Hi Dander,
if you are relatively new and yet to develop your trading style then unless you have cash to blow, Virtual Trading is a MUST DO is it not. I trade fulltime and I still to this day virtual trade new ideas and the odd potential trade I see when I have no spare capital in fact every single week I would have something being virtual traded.

Being unable to currently create your own trading ideas or strategy is exactly why you should be virtual trading. It will help you develop your trade time frame as well as entry/exit ideas. Best advice, keep it all simple... very simple.

If your long term goal is to be a day trader (good luck with that) then IMO why would you not want to invest in your business of trading and run more than a single monitor. Having multiple monitors allows you to click and scroll less and allows you to instantly see more information as well as other potential trades. Trading faster can mean the difference between a losing trade and a big losing trade. Processors and Ram requirements depend on your platforms usages and how heavy it is.

Forget share trading and it's nickel and dime profits and come to the dark side... Options .

Lloyd

Yes I don't have cash to blow so virtual trading will be a must, I like how you continue to trade virtually as well as with cash, that's a good thing and I'm going to steal it

I analyze stocks and workout what to buy and hold which is good I'd say but as far as day trading would go, not done that yet and must get on it. When you say to keep it simple, how simple is too simple?

That's true and I'll keep it in mind should I get to that point

Options eh, I'll check them out although I like the idea of equities but I'm not opposed to other investments

----

As far as online brokers to go with, I'm looking at Interactive Brokers but with a $10k opening I can't quite stretch that far at this moment in time which is unfortunate as they look like the one to go with, any suggestions on broker to go with as I'm looking at E*Trade and TD Ameritrade as well as Barclays Stockbrokers and TD Direct Investing although the fees are higher from UK brokers than US brokers, is it possible to open an E*Trade or TD Ameritrade account despite the latter not being for UK residents?

Also ITIN and W8 forms, do I fill and send them off before I'm with a broker or once I'm with one?

Thanks all for comments so far :clap:

 

[dr.blix]

Forget about a broker for now, you don't need one if you have a virtual account. And don't go near options until you've gone through a couple of marriages/houses and you're old and bitter enough to not care about being homeless.

What's simple? Price action. But most people agree that you should have 3 correlating signals (and not ones that essentially originate from the same source i.e historical indicators)

Start by learning candles (and understand the reason behind their forms). They encompass a lot of information.

You'll find that in tech analysis in general there's a lot of repetition (different indicators or systems [bars, candles, patterns] essentially saying the same thing), imo this is one of the things that makes it seem much more confusing than it might be. Hence focusing on one to start with.

Right now, treat it as a hobby that might one day be a SECOND income.

 

[lloydbee]

When you say to keep it simple, how simple is too simple?

As far as online brokers to go with, I'm looking at Interactive Brokers but with a $10k opening I can't quite stretch that far at this moment in time which is unfortunate as they look like the one to go with, any suggestions on broker to go with as I'm looking at E*Trade and TD Ameritrade as well as Barclays Stockbrokers and TD Direct Investing although the fees are higher from UK brokers than US brokers, is it possible to open an E*Trade or TD Ameritrade account despite the latter not being for UK residents?

Also ITIN and W8 forms, do I fill and send them off before I'm with a broker or once I'm with one?

Thanks all for comments so far :clap:

Very simple as in, trading off a Weekly and Daily chart with for instance with an RSI indicator, but for me simple is making money no matter what direction the trade goes. There is not a lot more satisfying than making money when it does not matter about stock direction.

[/URL][/IMG]

Using your LLC you should be able to get TD/Thinkorswim, Thinkorswim might look confusing at first glance but you'll soon get used to the amount of visible information. I haven't opened a new account for a while but when I last did I had to send the W8 after the application was lodged online. You should be able to access a Virtual platform after only supplying minimal information.

 

[Dander]

Very simple as in, trading off a Weekly and Daily chart with for instance with an RSI indicator, but for me simple is making money no matter what direction the trade goes. There is not a lot more satisfying than making money when it does not matter about stock direction.

Using your LLC you should be able to get TD/Thinkorswim, Thinkorswim might look confusing at first glance but you'll soon get used to the amount of visible information. I haven't opened a new account for a while but when I last did I had to send the W8 after the application was lodged online. You should be able to access a Virtual platform after only supplying minimal information.

Oh okay, I'll look into it properly soon

Cool, in that case would it not be better to set up a new LLC specifically for trading activities, something like a mini-hedge fund/family office (although I'm uncertain to the costs and minimums required of this and at this point it may not be worth it). I have sent off for an ITIN (which I didn't need before for reasons) which I'm hoping will make it easier in terms of opening a personal account stateside with one of the brokers there without using an LLC, we'll see

Thank you for your responses

 

[dr.blix]

Or you could just avoid all the red tape (and tax) and spreadbet with a reputable company like IG.