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NeoTrader

Transition 9 to 5 to Daytrader

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Can anyone offer advice on making the transition from a 9 to 5 office job to a day trader? There are some obvious inherent problems with making the move like time for instance. The inability to trade US markets because of the job etc. Because I'm just starting out I am reluctant to try and play foreign markets but that may be the only option.

I'd be interested to hear from those that are now successfully day trading for a living and how they got there.

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There are two types of daytraders. First there are the Intraday position traders who try to catch one or more main swings of the day. Then there are the the scalpers who's average trade ls less than 3 minutes. Scalping seems to be the most difficult and many in the industry says it can't be done.

The previous thread dealed mostly with the intraday position type. I 'd like to focus more on the scalping. How much screen time is required to become a consistently profitable scalper ?

Brownsfan, we will start out with you first

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I think the transition is very difficult because you're going from full steady income to possibly no or little income with high unpredictability. This will play a huge role on your trading because of the stress to produce the goods. If you can do half and half or if you already have a system you can pull a minimum of what you;re already making on your regular job for a good 6 months, then you might be ready. But remember gotta have the savings to survive those 6 months (or more), that way the pressure from the bills won't pile up and affect your trading. Good luck.

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There are two types of daytraders. First there are the Intraday position traders who try to catch one or more main swings of the day. Then there are the the scalpers who's average trade ls less than 3 minutes. Scalping seems to be the most difficult and many in the industry says it can't be done.

The previous thread dealed mostly with the intraday position type. I 'd like to focus more on the scalping. How much screen time is required to become a consistently profitable scalper ?

Brownsfan, we will start out with you first

 

Good question OAC. You know, it's funny - I don't consider myself a scalper but I guess others would. What I mean is, I consider a scalper someone or program that buys on the bid and sells the ask. To me, that is scalping. I personally take bigger profits than this per trade, but much less than a 'position daytrader' would. Right now profits are ranging from 2-3 pts per ES trade. So I'm not sure that a 2-3 pt per trade goal is scalping or not.

 

Regardless, there is no substitution for screen time. How long it takes before you can make money at it is anyone's guess. There comes a time when you've been watching your minute/volume/tick charts so much that you just intuitively 'see' things - you see when volume is low, you see when a certain level is heavily defended, you see when your profit targets are too much or too little, you see certain trades failing more regularly than they used to, etc. etc.

 

I do not think you can quantify how much screen time is needed b/c it will vary person-to-person. If you watch a 3 minute ES chart with the utmost dedication for a solid year, you will see much more than the casual observer or the 'hindsight' trader. If you then continue to study that chart for another year, you'll have 2 years of screen time experience that simply cannot be purchased or replaced.

 

The bottom line is that it does take time. Much more than most are willing to dedicate to this. A successful day-trading biz will normally take much longer than the majority are willing to put towards it. I suppose that's where the 'most traders fail' garbage comes from. Yes, most will fail, but not b/c of a bad system or even a small account. Most will fail b/c they simply will not put forth the time and effort required. That's it in my opinion. If you go into this thinking you will conquer it in 6 or 12 months, good luck b/c you will need it. We are talking about YEARS. And it's just like many other high paying professions in terms of YEARS needed to see the success. The difference however is that you can start in this biz for as little as $2500 and a computer. To be a doctor or lawyer, there's a little more needed from you before you could even consider it. Not so with day-trading, esp in futures.

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Awesome, thank you for the responses. My apologies for the duplicate thread, I didn't see it in my searches. :doh:

 

I guess the main issue for me is getting that screen time. Can't exactly watch screens at work to get that feel. I guess I need to accept that this won't happen for me anytime soon.

 

The major irony is I am contracted to one of the major investment companies in the IT department. Maybe I could walk around on the trading floor and gain knowledge through osmosis.

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I can't emphasize how important it is to record your trade. That is the cornerstone of making profit. From there, review your trade and find the market that suits you well. Your style.

 

I'm a scalper making 250 to 350 trades per contract, trading 3 hour a day. Trading Dax. With 60-65% winners,there's where I make living.

 

I have a friend who can't scalp like me,cannot trade the contract I trade and yet, still make living from trading. The key is simple. Find something that suits you. Get the sense of confidence from the simulator. Keep a proper journal on your ideas and then you can go live.

 

Believe me,it doesn't take long. Many way to make living from trading. Find your own way, and you will be glad you did.

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Believe me,it doesn't take long.

 

I think this is an unfair assumption to make scalper. To tell a newbie that it doesn't take long is very misleading to say the least. Not only is scalping profitably in a consistent basis difficult, it can take many, many hours of screen time to master this trade. There are exceptions and you may be one of the them, but it's not fair to paint a picture that is not accurate for newbies.

 

Now, if you want to start a thread and share how you scalp so that we can have a group of scalpers here in no time, that's a different story. ;)

 

Many way to make living from trading. Find your own way, and you will be glad you did.

 

Very true - scalping works for some and position trading works for others. In order to find this out however, you MUST put in the screen time. In order to find your flow and what works for you, live screen time will be what is needed.

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It may take a few years to master that's what I heard. The idea is simple. Record your trade and replay it until you get it. A trader with 2 years of experience and a newbie who review every single trade that he made consistently until he got the mistake and do it for 3 months, will get the same experience.

 

We are lucky to have the tools. Just the will to make it.

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It may take a few years to master that's what I heard. The idea is simple. Record your trade and replay it until you get it. A trader with 2 years of experience and a newbie who review every single trade that he made consistently until he got the mistake and do it for 3 months, will get the same experience.

 

We are going to agree to disagree then.

 

Just reviewing the 'trade' is very ambiguous and not clear at all. Just reviewing the day through some playback method will not shorten the learning curve. That, in and of itself, is not enough. Just staring at the screen hoping to get it is not enough. Our biz requires a solid methodology that creates that 'edge' with proper money management and emotional control.

 

It's not as easy as just replaying your trades at the end of the day hoping to see something that gives you an edge tomorrow. I would say that all you are doing is curve fitting your trading for the day that just occurred. Who knows if/when that analysis will work again.

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Through what I've read and observed modeling the habits of successful traders is a good way to go. Not so much try to copy their technique but pay attention to the habits and attitudes that make them successful.

 

Scalper - are you referring to recording the trades you made then reviewing them for things like, why did I take this trade? How could I have done it better? Why did I exit etc... in an attempt to improve execution?

If so that sounds like a good practice.

 

Brownsfan - do you have any non system specific daily habits I could learn from?

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Simply get the screen recorder software like camtasia or ZD soft. Record the trade that you made in the simulator mode. You can record whatever you like while you are trading, i.e chart with indicators,time and sales,etc.

 

I learned from Nihabaashi, who recorded every single trade for every single day. That alone, is the cornerstone of my trading to profitability. The same thing will happened again and again. I can't remember every hammer that I took, every shooting stars that I shorted. That's when the experience needed got shorten.

 

Actually I'm a newbie and started like everybody. Read every thread, copy every strategy. And my search of excellence bring me to Dr Brett Steenbarger's book. Talking about your strength and focus on it.

 

How do I know my strength if I dont look at myself when I'm trading? The best way is to replay and take note of how stupid I was for didnt take this trade and from there, take note, if this signal appears, I will take it.

 

I have focused so much on other people's methodology and ignoring my strength and weaknesses. From there, I will drop whatever indicators that I dont use, focusing on what works for me.

 

That's how I made it, focusing on myself rather than focusing on other person's method. Just get the idea from experience traders and try it on your own. Others find MACD very useful, but not me. But I knew myself. This has helped me. I dont want to say how long does it takes becoz its really short. Everybody starts like this and when you finally got there, the only advice that you can give is simply that everybody can make it if he really wants it. No secret.

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Brownsfan - do you have any non system specific daily habits I could learn from?

 

Off the top of my head...

 

Find a style that you like - either many trades per day or a few. I do better with taking more trades with small stops and decent profit targets.

 

Study like there's no tomorrow. In the beginning you are going to go through so many things it's not even funny. Find what you like and appears to be working somewhat. You don't need to hit homeruns in the beginning. Singles are fine.

 

Do NOT risk any REAL money until you've 'played' on a simulator for many months.

 

This will take time. If you don't have time, it will be hard to get good at this.

 

Hold yourself accountable - to your spouse, significant other, this board, whatever. Just know there is another set of eyes watching your progress of lack thereof.

 

Only believe the numbers that you verify. Statistics and numbers are manipulated beyond belief in this biz, so only trust what you know to be true.

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"Simply get the screen recorder software like camtasia or ZD soft. Record the trade that you made in the simulator mode. You can record whatever you like while you are trading, i.e chart with indicators,time and sales,etc."

 

Great advice ...scalper on steroid

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