chulaihuey

Excellent and thorough discussion of some of the most important considerations in choosing a broker, thanks. I might add two other items: Capitalization: Brokers registered with the US's CFTC are required to report monthly on their financial status. That report can be viewed at: Financial Data for FCMs Number of Accounts: At one point in time I did some research trying to find out how many accounts various brokers had. The CFTC, again a US thing, requires a quarterly report on number of accounts. As best I could tell it was to be included in the broker's Risk Disclosure Statement. Attached is a sample from Q3, 2011. I was not always able to find the Risk Disclosure Statement, and as best I recall some I found and did not find the data.

My question is what the following sentence really means: "They know that many investors in the general public will fall for the "fade" nearly every time." So does "falling for the fade" mean that in an uptrend if there is a pullback the general public is taking this to be a trend reversal, and entering short while the smart money "knows" this is just a pullback and they are going long on the pullback's low. So the smart money is buying from the gen pops short selling. Do I have this right? Or am I all wet??? If I do have this right what are the signals then that this is a pullback to the prevailing trend as opposed to a true trend reversal?

The way I read it: "A market in an uptrend will likely have higher highs and higher lows. The opposite is true for a downtrend. Lower highs and lower lows tell you when the market is in a downtrend."

Tams, thanks. I had a different understanding of MFA/MFE. I thought it was what a trader could do in a best case scenario. It is not necessarily what I am making now, on paper, or real. Not sure I can explain it that well, but here is an example. Let me know if I understand this correctly. If I go long some asset at let's say a price of 100 and it goes up to 110, but I miss that best price and sell out at 105 then my win for the trade was 5 (105 -100), but the MFE (Max Favorable Excursion) for the trade was 10 (110 - 100). So what this analysis lets me do is see how much better I could be doing. Do I have this right? Also, the software I use does not have an MFE/MAE output, so I am trying to create a spreadsheet with this calculation in it. It would help if I could see someones data organization (column headings only) for the output so that when I create the spreadsheet I could have all the data needed. If that is something you could screen cap and include, I would appreciate it. If not maybe just tell me what platforms you know of that have this output and I will research them on my own, Thanks.

... 2. what is your MFE to MAE ratio on each trade? .... Tams, Where do you get your MFE/MAE data? Does the platform you use provide it, or do you have a spreadsheet app? If a spreadsheet can I get the template? Thanks.

Instead of using TOS's Paper Money have you tried the OnDemand function? It allows you to backtest a strategy. I am not certain, but I think Paper Money does exit on a touch of price, whereas OnDemand is more like realtime trading and requires a move thru price to trigger. That is something I have been meaning to verify, but for now its an idea worth trying.

I found it interesting in one of the recommended readings a poster included the definition of the word plan. Among the definitions one stood out for me: "method for achieving an end" So for me that means an important aspect of the plan is to have an end, or in my mind a goal. It is way too simplistic I think to have a goal that states make money, or be profitable in 6 months. I am personally inclined to be much more specific with amounts and time horizons. I also think the goals have to be both reasonable and adjustable. If after 6 months I have only met half of my income, or wealth target, that does not mean I was wrong, only that I need to now adjust my assumptions and targets, and possibly my plan as well. I think a goal or set of goals are a very real part of any plan.

Hi Jeremy, Welcome to the wonderful world of day-trading. There are way too many topics to list all of the things one needs to familiarize themselves with before going live in the markets. But, two things I feel are essential are: Creating a Trading Plan Learning to analyze price action The internet is a treasure trove of knowledge, both good and bad. Half the fun is the search for the good info. Best of luck..... Barry

I agree with others that 5k is a risky starting value, and in the US will not allow active day trading. If your platform has a stock screener option you can "look" for stocks that meet your criteria, like price range, beta, volumes, etc. If your platform does not have a stock screener try this one, its free: Free Stock Screener

Thanks for starting this topic. I am trying to learn Auction Market Theory as well, so I cannot add much right now. I am reading Auction Market Theory now as an introduction and to better understand it. I look forward to posts in this thread and will add if and when I feel I have something useful to contribute.

I am a new trader, and I have to say that at this point in my development the only real edge I do have is to be disciplined enough to stick to my trading plan. Before when a stock I was holding went down I hung on and "hoped" for the best.....Now I get rid of it like a hot potato, as long as that is in my plan. I agree that I do not want emotions getting in the way of my trading, but for me that takes discipline. Just my opinion.....

I am a beginner as well and have found a 'paper trading' account to be very useful. The broker I am signed up with also has chat rooms and through those I was able to get the information (and confidence) to put trades on using the eMinis. I am by no means ready to go live, but I am very quickly learning what not to do, and since it is "funny money" my funds are still intact. I have heard that going live is much different than a paper money account, but it is affordable. I did look into mentors and could not believe how much money they wanted. If I needed a mentor to learn to swim or ride a bike I would have ended up walking to the pool to drown.

Thanks for the pointers. I did read one of O'Neil's books over a year ago, I should dust it off and read it again. Will look at the Journal and Log posts as well. I am just getting started looking through the Traders Lab site, I am very impressed! Thanks for the help!

I am a beginner as well, so I find this thread very informative. I used to use Fidelity as my broker, but found that you could only get access to their advanced tools by trading 120 trades per year. So I opened an account with TD Ameritrade. There is no minimum trading limit to get access to their tooling (Strategy Desk). I have not been with them long, but I like the fact that they offer seminars (free) and webcasts (free). They are biased, but not to the point of being obnoxious. And, I don't get the impression they are trying to sell me on anything, they truly seem to be just trying to create smarter investors/traders. It is to their benefit after all. A happy customer will most likely stick with them and bring more money to them. Alteast that is my current theory. I have been trading for about 2 months. I call myself a swing trader, since I am willing to let my trades run multiple days as opposed to jumping in and out in a single day. There are two things that are becoming very apparent: I need to create a Trading Plan. I need to paper trade and stop jumping into stocks that "look good" to me. Two examples of my ineptitude: I bought into the XLF ETF when it was at 18. My reasoning was that it was selling at 1/2 price from its high of 36. Well now it is selling below 7. WHOOPS!, fortunately I committed very little money to it. I bought INTC on Friday when it was at what "I thought" was a perfect entry. I put a stop at what "I thought" was a perfect point as well. Well the market knew exactly where I put my Stop, traded down to it, stopped me out, and then went back up. OUCH, this is starting to hurt.