Some Questions Please

[AbeSmith]

	Quote:	tony1d
	Reminds me of my worst trading nightmare. I once traded FOMC news, it was a bullish report and i immediately went long Market order of 2 YM contracts with a 15 pt stop, I got a horrible fill and on a quick retrace got stopped out. Once it reversed i went long market again, got a horrible fill and got stopped out again. Seeing weakness and a desire to get "revenge" i went short the market and you know the rest.... 3 trades in 5 minutes, 45 pt loss on 2 YM contacts or 450 dollars in 5 minutes. disgusted with myself, i stopped trading, walked away and of course came back right before the close to see the market base and run up 100 points into the close with barely any heat. I have not traded news since. I do trade market reaction to the news after the volatility settles down and i see a clear trend if it occurs, that works well. So, expensive lesson learned. By the way, i "punished" myself for breaking my trading plan and doing everything i knew not to do. I went back to the SIM, practiced my setups and didnt trade for about 9 trading days until i thought i was ready again. Started trading 1 contract until i knew my head was screwed on right. lesson learned...

That sounds horrible. Hopefully that will not happen to me. Oh...nevermind. It did. LOL. It was NMX a few weeks ago when there was a report that they were being bought...turned out to be a rumor and I got stuck with the stock and held on to it thinking that it would rebound, and lost alot of money. Classic newbie mistake. You read about these things in books, but they don't make as much sense until you actually make the mistake. Later when I reread some of the advice I read before in other books it made perfect sense.

[james_gsx]

They don't find out the information ahead of time, or they do and it's called insider trading.

But theres another way, doing your homework on the stock. Then those breaking news announcements aren't so much of a surprise. Most of the people with big money have news feeds so they find out about the event far before it hits CNBC. For example, I did a lot of homework on Jones Soda before their earnings announcement. Feb 27 came and the stock was sold off pretty fast, I knew it was cheap and I knew they would report a great quarter and I knew they would be reporting very positive info that could bring great future growth (bringing their product to places like walmart). So I went long ahead of earnings and made 17% over night. Will this happen everytime? Absolutely not, but I did my research and had a plan ahead of time.

Please notice the keyword there too, I had a plan. Not having a plan and trying to trade is like going into battle with no idea who you're fighting against, just blindly shooting at anything. You will get slaughtered. Remember when you trade, you are trading other traders and money just flows from one account to the other. You have to have this mindset.

I would start off looking at a lot of the IBD stuff and learn how to do technical analysis (if that fits your style, I know guys who make a ton of money and couldn't read a chart to save their life). That way you can understand how the market moves and why it does the things it does. You will be able to understand why certain stocks shoot up and why others don't. From there, figure out what fits your personality and trade that. People can recommend futures, forex, options, but you have to figure out what fits your personality and go from there, thats the only way you'll be successful.

Good luck!