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NickTW

First Post, New Trader, Help Wanted!

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Hello!

 

First of all, love the site. Seems like an incredible source of information and insight.

 

I'm looking to start trading, but hope to glean some insight and advice before I jump in head first. The reading has already begun - Trading in the Zone, Mind over Markets, Candlestick charting, etc. My biggest dilemma right now is the following:

 

1) I work full time on a taxable bond trading desk, ~50 hours a week, usually 6:30 AM - 4:30 pm M-F. I do not want my interest in trading to impact my productivity at work, but I do think the access to a bloomberg terminal will be beneficial. Is there a beginner-friendly market that I can trade before or after work hours without handicapping myself? If so, where's the best place to practice paper-trading this market, and what reading material would you suggest?

 

Thank you in advance for any responses, and thanks to Soultrader for creating such a great resource for aspiring traders!

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Hello Nick and welcome.

 

I don't know how much this is going to help...you are in Dallas and finish work at 4pm, so the after work option is going to be Asian markets (Tokyo open is about 4 hours or so after you finish work, I will leave you figure out the exact times) or the night sessions of the US and Europe markets. The FX markets are of course 24 hours, but even so the 4 to 5 hours after 4pm in Dallas are, generally, the lowest volume time of the 24 hours period.

 

The before-work option will give you more choice of larger, deeper markets, starting 4-5 or so hours earlier you would see the opening of the European markets and the opening of the European session of FX. As to how beginner friendly these are ... well ... trading physical stocks would be classified as a bit more beginner friendly than say the DAX futures. I am sure others more familiar with these markets will have better views.

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Couldn't have said it better mister ed :thumbs up:

The asian session in FX usually isn't worth trading, AUD and JPY have the most acceptable spreads and move a bit during that time. There are exceptional days but volatility is very low most of the time.

European markets should offer better opportunities for you, unfortunately I'm not familiar enough with asian futures/stocks to make any recommendations.

Edited by Sparrow

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Hello Nick,

 

A small word of advice would be to initially focus on considering a different style of trading (i.e., swing trading or position trading) because the natural course of day trading requires a significant amount of dedication, commitment and time.

 

Based on your available schedule, you can learn to trade one style and gain some success and experience and then migrate your success, hopefully with profits to a different style (i.e., more active day/scalp trading) as your schedule and lifestyle permits.

 

Trying to day trade with other demanding responsibilities could/will lead to some bad habits and unnecessary experiences no matter what markets you trade before or after hours. Professional and experienced traders know that distractions can/will impact your trading psychology and results.

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Maybe a direction to head would be chart patterns on a longer time frame. Maybe 5 day swings to 30 day positions. Trade entry would be small so stops and targets would have a chance to pan out without sweating during the day.

 

Take a look at Bulkowski's (sp?) work on chart stats. Might be an opportunity to build a system that is flexible around your schedule.

 

Caveat would be the current conditions of the market in stocks. FED, news, etc. make it more difficult at this time....but what is new?

 

FOREX paper trading small lots would also be a good ground for testing systems before leveraging in at 200:1.

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Thanks for all the responses everyone. I've got to be honest - like the idea of testing the waters in swing/position trading more than waking up at ~3am every morning. Did a little research on Bulkowski - quite a few books by this guy, any you recommend to start with?

 

Also a few more questions:

 

1) What kind of starting capital would you recommend for this kind of trading? Fewer trades per week would seem to lessen the pain from commissions, but I assume you're going to have to trade larger positions with less leverage.

 

2) Any recommended reading specifically on this style of trading?

 

3) Until I jump in and do this with real money, any platforms you recommend for paper trading realistically?

 

4) I have an account with optionsXpress right now, and because I'm an employee of a FINRA member firm, I can't get real time quotes (15 minute delay). Will this be the case everywhere? Seems kind of silly.

 

Thanks in advance for any responses, sorry for all the questions!

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Hello Nick,

 

Nice to see someone wants to actually do a little work for a change.

 

The problem with looking for a longer-term trading approach, is you are greatly reducing your frequency at which will learn at. Let me explain:

 

3 brand new traders, trade for a year:

 

1. Tries day trading. 20 trades a day x 250 trading days = 5000 opportunities to learn.

2. Tries EOD trading. 1 trade a day x 250 trading days = 250 opportunities to learn.

3. Tries Position trading. 1 trade a week x 50 trading weeks = 50 opportunities to learn.

 

Statistically it takes around 10 years to master a pursuit. The best way to speed it up is to increase your sampling rate.

 

At the trading firm I work at, the emphasis is just to get new traders trading, on a simulator, as much as possible. Hundreds of trades a day, every day. Developing a feel for the market. Understanding price action. Simply trying anything that comes to mind.

 

Mentally, you are constantly performing 'accept/reject' strategies in your head.

 

I would suggest to focus on day-trading ONE market outside of work hours. Because you are limited for time, you are going to need to 'compress' as much as possible.

 

Dr Brett Steenbarger runs a high quality blog - here is a link to a post with regards to 'practice trading' market data.

 

"Replaying the Trading Day: A Best Practice in Trading"

http://traderfeed.blogspot.com/2007/02/replaying-trading-day-best-practice-in.html

 

Hope it helps.

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Thanks for the post smw - seems like a really valid point. I noticed in the link you gave that Bonnie mentions that ensign allows you to replay trading days. Maybe that'd allow a bit of a hybrid approach for my current situation - swing trading with real money to work on money management/psychological aspects, and replay parts of a random trading day to get the repetition and practice in the evenings. I'm assuming the strategies used by day traders are similar to swing-trading, just on a different time frame - can anyone confirm/deny that assumption?

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Hello!

 

First of all, love the site. Seems like an incredible source of information and insight.

 

I'm looking to start trading, but hope to glean some insight and advice before I jump in head first. The reading has already begun - Trading in the Zone, Mind over Markets, Candlestick charting, etc. My biggest dilemma right now is the following:

 

1) I work full time on a taxable bond trading desk, ~50 hours a week, usually 6:30 AM - 4:30 pm M-F. I do not want my interest in trading to impact my productivity at work, but I do think the access to a bloomberg terminal will be beneficial. Is there a beginner-friendly market that I can trade before or after work hours without handicapping myself? If so, where's the best place to practice paper-trading this market, and what reading material would you suggest?

 

Thank you in advance for any responses, and thanks to Soultrader for creating such a great resource for aspiring traders!

 

After reading your initial question and the responses you've so far received, I'm still wondering why you're not trading something you know. Or are you not trading? What exactly do you mean by "work full time on a taxable bond trading desk"?

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Phoenix,

 

Fair questions. Let me elaborate a little on my situation.

 

1) I don't currently trade anything. Recent college grad, discovered a passion for finance soon after graduating college (management degree) and switched into that career path. Took a job as:

 

2) A trading liaison/salesman on a small bond trading desk. I help the trader with a lot of the mundane details, but have no say, input, or insight into the positions the trader takes. I've only been in the business about 6 months now - long enough to get my Series 7/63 and step more into a salesman role. Still young (24), and still trying to learn everything I can, and the equities market is something that really appeals to me for whatever reason. Trading seems to be a natural progression into learning more about how markets act - and as a result help me in my current job (the bond market and equity market appear to behave very similarly in most situations) and also allow me pursue a growing interest.

 

Hope that clarifies things a little...

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Thanks for the post smw - seems like a really valid point. I noticed in the link you gave that Bonnie mentions that ensign allows you to replay trading days. Maybe that'd allow a bit of a hybrid approach for my current situation - swing trading with real money to work on money management/psychological aspects, and replay parts of a random trading day to get the repetition and practice in the evenings. I'm assuming the strategies used by day traders are similar to swing-trading, just on a different time frame - can anyone confirm/deny that assumption?

 

Yes, Ensign is a charting package that allows for replaying of trading data (among other things).

 

Others may have other suggestions, however in my opinion I would ditch the position/swing trading. Is it something that is much easier to move into once you understand how a market works intra day.

 

money management / trading methodology intra day is completely different to position trading/swing trading.

 

It is common to want to make money while you learn to trade, however the blunt reality is that the focus really needs to be on losing money slowly.

 

I would suggest:

 

1. Work out your goals. What do you want to achieve.

e.g. move into a trading position, trade your own capital, etc.

 

2. Choose a market

 

3. Practice trading it. Learn everything you can about that market. Ideally a market where, if you are choosing to trade your own capital, something where degrees of leverage are available.

 

E.g. studying the S&P 500. You can trade the SPY minimum size share lot to significantly reduce any chance of blowing your account. When suitable, you can then trade the S&P 500 e-mini contract.

 

The general way people fail in trading is trying to go head-on into it trying to trade too many things, under capitalised & overconfident. Avoid that and you should be fine.

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Phoenix,

 

Fair questions. Let me elaborate a little on my situation.

 

1) I don't currently trade anything. Recent college grad, discovered a passion for finance soon after graduating college (management degree) and switched into that career path. Took a job as:

 

2) A trading liaison/salesman on a small bond trading desk. I help the trader with a lot of the mundane details, but have no say, input, or insight into the positions the trader takes. I've only been in the business about 6 months now - long enough to get my Series 7/63 and step more into a salesman role. Still young (24), and still trying to learn everything I can, and the equities market is something that really appeals to me for whatever reason. Trading seems to be a natural progression into learning more about how markets act - and as a result help me in my current job (the bond market and equity market appear to behave very similarly in most situations) and also allow me pursue a growing interest.

 

Hope that clarifies things a little...

 

Well, assuming that there's no one there who'd be willing to act as a "mentor", much less a coach (even if you'd want that from anybody there), don't be embarrassed to take baby steps. If you're interested in the equities market, at least in part because it appears to behave in a similar fashion to the bond market, then consider an ETF that's equity-based, such as the QQQQ, DIA, or SPY. You won't have to devote your weekends and evenings to stock research, you won't have to sweat out those portions of the day when you can't watch whatever it is you traded (you're going to have difficulty getting a feel for how the market behaves if you're not there), and you can trade any of these just as you'd trade their e-mini equivalents, in the event you ever want to try futures; that is, you can daytrade them (which I do not recommend), swing trade them, or take positions in them. Plus the amount you risk can be much smaller, and you can scale in and out of positions, if that appeals to you.

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Just my opinion... there are no easy / beginners markets, everyone out there is trying to take your money. The previous posts suggest to start with swing trading and work your way into day trading. Great suggestions, however the pace of swing trading versus day trading are completely different. Please keep in mind that swing trading allows you to make decisions and analyize your positions after market hours. With day trading decisions must be made on the fly. Paper trading is a must until you are comfortable with the order types, and by all means have a trading plan and stick with your plan until you are disciplined enough to follow your rules. Good luck

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