Newbie

[pta_user]

Hello, all, I just wanted to start off with my background. I am new to trading. It all began in October, 2006. After working hard on a couple of projects at work, I was given some free tickets to “Get Motivated” seminar in Michigan. Since my company does not give out many monetary rewards, the was my reward.

From there, one of the guest speakers was from Investtools. Does everyone know the Number one Rule of stock Investing? Answer: Don’t lose money ! Anyway, it really was a motivating day and I went to the Free Investools Seminar.

There software combines fundamental analysis as well as some black box Technical analysis. The TA portion is very interesting, concidering they where able to program buy/sell signals on all Three charts, the security, the stockatics, as well as Volume?

My question to you is… Is it possible to generate $1000 every couple of months with $6000 in initial capital? I consider myself a part-time trader, meaning that I have a full time job. I am leaning to swing trading or aggressive long-term trader.

I found it hard to believe that I could use Investtools successfully, considering they wanted $2000 for the class and $60 a month for the data feed and access to their proprietary DB and the Buy / Sell signals. That would wipe out my capital right off the bat. However, I really liked their 5 Phase Approach.

Phase I : 6 out of 9 Fundamentals
Phase II: 2 out of 3 Analysts buy or sell (Zacks Rating)
Phase III: TA 3 Buy signal (Price, Stockastics, Volume) Black box Green or Red Arrow.
Phase IV: Following Big Money (is money moving in or out of the Sector?) Proprietary Red, Yellow, Green chart).
Phase V: Insider Trading

I added Phase 6
Phase VI: I added the leverage of Options. Covered Calls, Puts, etc… because of my limited Capital.

Anyway, I am programmer by nature and I like the use of Technical Analysis.
I gave myself a semester to see if I could learn Options and the Stock market. So far, I have been inundated with the internet and all the software out there.

I am in the process of opening an account with IB or Trade King. I feel comfortable with the Trade King ( new broker as of 2007) because they specialize in Options and they are affiliated with OIC.

I have read Technical Analysis from A to Z (Achelis) as well as Trade Options online (Fontanills). Both are excellent reads. I just purchased Metastock 10 this weekend.

Thank you for listening. Remember we all have to start somewhere….

Regards
PTA (Part Time Associate Trader)

 

[pssonice]

NO, it is not possible

dreams never come true and live is mare

 

[pta_user]

I am assuming that I would need more captial to start off with?
realistic min to start off with would be ???? (20,000)?

Thanks for you reply.

 

[ktomko]

Of course it is possible, however not very likely. This depends entirely on the type of security you are trading. You can make $1000 a day trading that size account on futures. More likely you would lose $1000 a day. Purchasing stocks you would need to be very talented to bring 15-20% a month after costs. Again, not likely. I would suggest not buying any blackbox software, if you don't know what it is doing, you will likely quit using it in the middle of a drawdown. Might I suggest "Technical Analysis of the Financial Markets" by John Murphy. "Trading for a Living" by Dr. Alexander Elder, and "Trade your way to Financial Freedom" by Van Tharp. This will be $200 well spent for you. If I could start over, I would have saved myself a lot of money by getting some of these basics down and then paper trading them first. Otherwise you are likely to just volunteer your $$ to others. FYI it's "Stochastics"......good luck!

 

[damianoakley]

Hi Pta,

$1,000 every couple of months using $6,000 is basically doubling your money in a year - ie - 100% profit.

This is possible, but not easy - especially if you are a beginner trader. Personally my best ever year was 108% profit, but most years I am happy if I have made a 50% return.

It depends what sort of trading your personality can cope with. If you are willing to spend a number of hours a day in front of the computer daytrading, then maybe doubling your money in a year is realistic, but if you've got a job and life to work around, then end-of-day trading and a 50% return are more realistic.

In your very first year of trading, you should be happy just to breakeven, but if you are sensible and have a good plan, you could safely do 25%-30% in my opinion.


Thanks

Damian

 

[nunrgguy]

Sorry to dig up an old thread:
50% per year - is that taking compounding into account too or not?

 

[damianoakley]

Hi,

The 50% I am talking about is achieved by leaving my money in my trading account all year and making one big profit withdrawal at the end of the year.

So, if I started on the 1st January with $100,000 then I would be happy it had grown to $150,000 by 31st December.


Thanks

Damian

 

[Hoggums]

Does everyone know the Number one Rule of stock Investing? Answer: Don’t lose money !

That's probably the worst piece of advise I have ever seen. If anyone said that to me I would walk away.

It sounds like that chap had been caught up in the hype of Investtools. Making $1000 from £6K using unleveraged funds in 2 months is pure fantasy.

 

[nunrgguy]

Hi,

The 50% I am talking about is achieved by leaving my money in my trading account all year and making one big profit withdrawal at the end of the year.

So, if I started on the 1st January with $100,000 then I would be happy it had grown to $150,000 by 31st December.


Thanks

Damian

So that's roughly just over 0.8% per week if compounding weekly, which is reasonable and very good going I might say.
If success continued at that rate while keeping the money in the account, risking no more as a percentage of the total account as before, compound returns would begin to grow.
I know I'm pointing out the bleeding obvious but I think that the reasonable and realistic growth along with keeping risk under control and not gambling as you've illustrated +compounding = great results.
6000 compounding weekly at a more conservative 0.5% for 5 years = 21000 for example