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Trading stocks is making me bald

Discussion in 'Other Off Topic Forum' started by androza, Apr 5, 2004.

  1. androza

    androza Karting

    Nov 4, 2003
    86
    Good lord, how do people day/swing trade for a living? I've never done anything nearly as stressful or terrifying. I started around this time last month, and I'm just above breaking even. Currently, I tend to lose more times than I win, but I win much larger than I lose. How do you people manage it? I'm nervous even when I don't have any positions. Any tips for conquering this fear or just any tips on day trading in general? Oh, and anyone know where I can get a free real time chart, I use Bank of America, which has real time quotes, but I would really like a real time chart to watch my securities.
     
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  3. Juice It

    Juice It F1 Rookie

    Sep 22, 2002
    3,233
    Maryland (DC Suburb)
    Full Name:
    Jeff
    I hear you, you think its bad now, you should have been around in 99 when things could drop 15 pts in 10 min. Thinking I was Joe daytader back then was very educational to say the least. Not in a good way!
     
  4. allanlambo

    allanlambo F1 Rookie

    Jun 9, 2002
    4,363
    Maui
    Full Name:
    Allan
    In my experience i found it way too stressfull and never made any real money. Felt great to win, but then you lost. Just like gambling.
     
  5. androza

    androza Karting

    Nov 4, 2003
    86
    As long as I did exactly what I planned on doing, I make money. Whenever I step out of the bounds, and try to buy something from the 10 most advanced list on the NASDAQ, I lose. It drops seemingly as soon as I buy it, even though plenty of them (stocks on the advance list) increase in value. If they went up 10 cents a share, I'd be happy and run, but they just seem to drop.
     
  6. W00dEar

    W00dEar F1 Rookie
    BANNED

    Feb 24, 2004
    3,515
    LI, NY
    Full Name:
    Chris
    Judging from what you wrote, you really should not be daytrading.
     
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  8. JSinNOLA

    JSinNOLA F1 World Champ
    Sponsor Lifetime Rossa

    Mar 18, 2002
    15,223
    Denver, CO
    Full Name:
    John
    Androza.

    I think it might help you out to have your trading plan and boundaries written down on paper. Take that piece of paper and swear by it, without fail.

    Next, print out your plan and post it up right next to your monitor so it is always staring you in the face. DO NOT GO AGAINST IT!

    Also, make sure that you trading plan is clear and concise. Keep paramaters strict. You might want to pick up a copy of "Trading in the Zone" by Mark Douglas. He stresses the importance of emotional detatchment
    and sticking to your rules.

    I am about to begin FX spot scalping with real money in a couple of weeks, and I do get stressed out even on my simulation money. I found that I got really stressed on Thursday and had to take a 15 minute break to get a reality check.

    Best of Luck!
     
  9. androza

    androza Karting

    Nov 4, 2003
    86
    Pray tell, what is FX spot scalping? Oh, and what school are you in right now? I'm switching from a major in architecture into finance. Are you in the City?

    I'm picking up Trading in the Zone tonight, along with Market Wizards hopefully.
     
  10. F-passione

    F-passione Karting

    Mar 31, 2004
    173
    Orange County, CA
    Forget it.....trust me. I did it for a year and over $30K down the drain decided to quit. I never looked back and decided to focus on real estate. A couple of years after that and I had my first 360 and very nice equity with several RE purchases. I would have been out on my ass otherwise. I don't know anyone that honestly makes $$$ at it.

    Save your sanity and your money. It is extremely addictive btw.
     
  11. JSinNOLA

    JSinNOLA F1 World Champ
    Sponsor Lifetime Rossa

    Mar 18, 2002
    15,223
    Denver, CO
    Full Name:
    John
    I am trading currency fluctuations of the Forex Exchange(FX) rates between the Euro and the Dollar.

    Spot transactions are commision free. On my quoting software the price of the EurUSD is currently 1.2013-16.

    This means that if I think the price of the Euro will appreciate I am forced to buy at the Ask price of 1.2016. The Bid price is 1.2013. The Bid-Ask spread is therefore .0003.

    1 tic = .0001

    So in order to break even on the trade the price would have to read of as follows: 1.2016-19

    I currently am trading positions of 1-3 lots, which would require around $10000 of capital to sustain. There is a lot of potential for gain with spot transactions, but with that gain come risks.

    The spot transactions are on margin(i.e. loan). The dealer who makes the transaction possible lets you put down 2% of the money, and they cover the rest.

    So with my $10,000 I can effectively trade with $500,000. This greatly multiplies your gains/losses.


    If I make a trade for $100,000, each tic I make in profit nets me $10.
    So if I buy at 1.2016 and sell at 1.2020 I have made 4 tics or $40

    If I were trading $200,000 the profit would be $80

    The exchange rates are updated continuously, and exhibit a decent amount of variation daily.

    For a concise and clear explanation of the basics of FX trading I suggest you check out www.moneytec.com

    On the left-hand side of the main page you can scroll down and click on a tab called "what is forex?"
    It gives a nice bit of easy to understand info. Check it out and let me know what you think, if you want some more info I know plenty of other sources you could check out. Let me know what you think!:)
     
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  13. JSinNOLA

    JSinNOLA F1 World Champ
    Sponsor Lifetime Rossa

    Mar 18, 2002
    15,223
    Denver, CO
    Full Name:
    John
    I forgot to say a couple of things. I am reading Market Wizards right now and it is definitly a worthwhile read.

    Also, I go to Tulane in New Orleans and am a Finance Major. I am about to graduate this spring and will hopefully graba full time trading job after my internship experience this summer.

    Scalping is like daytrading on crack. There are plenty of times I hold positions less than 15 minutes.

    Check out these threads I started as well:
    http://ferrarichat.com/forum/showthread.php?t=13099&highlight=technical+analysis

    http://ferrarichat.com/forum/showthread.php?t=7685&highlight=technical+analysis
     
  14. racerx

    racerx Guest

    Nov 23, 2003
    879
    Daytrading is for someone with a sizeable chunk of change that can be gambled. I have made many good trades buying "story" stocks down low and holding until they were discovered by the public. Last year sirius under a buck, recently 2 others, 1 for 400% another for 100%. I would post them but would not want to hear about any losses. There are many diamonds in the rough to find and hold for awhile, but daytrading requires an awesome technology setup (multiple screens and services) and Mr. Spocks emotional detachment.
    T
     
  15. Fastviper

    Fastviper F1 Rookie

    Nov 20, 2003
    4,410
    Texas
    Full Name:
    Dash
    I day traded in 98 for a while, the biggest boom in history, I do not get stessed in business but day trading did it to me, I couldnt eat, I couldnt sleep, I felt better losing money in vegas, while all my friends were tellling me they were making thousands I was losing my shirt. Good luck and if you can make any coin doing it please tell us how.

    john
     
  16. Doody

    Doody F1 Veteran

    Nov 16, 2001
    6,099
    MA USA
    Full Name:
    Mr. Doody
    i violently agree with the suggestion to put a plan in place. what's your maximum % or $ loss. and what's your top % or $ gain. and live by it. i've sold at my top % gain only to see the stock continue to go go gopher - such is life. i don't dwell on it. have a plan and stick to it.

    people have a tendency to get awfully wrapped up and forget to take money off the table now and then.

    when i started i used to get stressed, but you have to get past that if you're gonna keep doing it - otherwise you'll kill yourself. set small brackets initially - say 5%. put it automatic buy/sell orders once you've got a position so they just trigger automatically if something happens. take your 5% gain and move to the next thing. or suck up your 5% loss and move to the next thing. when you're more comfortable - move the brackets out.

    and never forget that no matter how smart you think you are, you're basically gambling :)

    doody.
     
  17. cohiba_man

    cohiba_man Formula Junior

    Jan 23, 2003
    937
    Canada
    Full Name:
    John
    QUOTE:"Judging from what you wrote, you really should not be daytrading."

    Unfortunately I'd have to agree with this, without a cool, businesslike approach to trading and a SOLID plan, you WILL fail, and most do.
     
  18. bubba

    bubba Formula 3

    May 8, 2002
    1,025
    Hong Kong
    Full Name:
    PPPP
    Daytrading is indeed very stressful. But, if you look at the money as spare cash you can afford to lose, then no need to sweat over it. I set my gain targets low, so it's easier to reach and to cash out. But, in today's market, even modest targets can take a while to get to. But, don't despair, just be patient.

    The key is don't get too greedy. Once you hit your target, cash out. Like doody said, so what if the position you sold keeps going up, you've made your money and that's what counts. In today's low interest-bearing bank accounts, any gain you get out of stocks is much better than putting the money in the bank.

    My 2 yens worth.
     
  19. JSinNOLA

    JSinNOLA F1 World Champ
    Sponsor Lifetime Rossa

    Mar 18, 2002
    15,223
    Denver, CO
    Full Name:
    John
    Well, it is said that 90% of traders lose 100% of their capital in the first 4 MONTHS!


    I guess you could say that trading is like high stakes poker, you will get taken out if you let emotions cloud your better judgement. Discipline is key.
     
  20. racerx

    racerx Guest

    Nov 23, 2003
    879
    "Here comes the colonel with his sargeant
    there a'roarin, there a'chargin
    go go gophers watch em go go go"

    couldn't help it

    T
     
  21. Doody

    Doody F1 Veteran

    Nov 16, 2001
    6,099
    MA USA
    Full Name:
    Mr. Doody
    WOW! is that just an urban legend or based on some actual analysis? very scary if true!

    fwiw, in the past six months i've made much more money short than long. i belive the markets are irrationally high, and have been able to ride many of the down-spikes. predicting positive earnings surprises has stood me in good stead too, though i'm not sure it's not lucky guessing. big volatility around earnings - it's great!

    doody.
     
  22. JSinNOLA

    JSinNOLA F1 World Champ
    Sponsor Lifetime Rossa

    Mar 18, 2002
    15,223
    Denver, CO
    Full Name:
    John
    Doody,

    That figure is according to Mark Douglas in both "Trading in the Zone" and "Disciplined Trader"

    I have heard the same from other sources as well. Pretty scary stuff!
     
  23. Korr

    Korr F1 World Champ
    Silver Subscribed

    Dec 7, 2003
    17,184
    Full Name:
    Newton Earl Anderthal
    I have done this, and made completely decent money at it. When I say that I made completely decent money out of it, I don't mean buckets of money. A hundred here. A few more hundred there. I sometimes closed the week out with nothing in profit; sometimes I closed the week out with 2k in profit. Year end would come around and I was up maybe 15-17k over my normal earnings. Another year I made hardly anything.

    Not bad, not great, and certainly not at all glamorous. It was not a bad way to get some basically free cash. However, there are HUGE caveats.

    The first caveat is that this type of venture requires 100% discipline to stick to your plan. You MUST stick to your risk plan 100% with no deviation from it, otherwise you will lose your ass sooner or later. Not maybe, not IF, but you WILL lose your ass if you don't have the discipline to stick to your goals.

    Set your goals ahead of time, and set them in a modest fashion. Your first goal is to make money, duh! No, it isn't. Your first goal is to reduce how badly you lose money when you **** up. This is where your rules and trading discipline come in. Limit your trading losses to X percent a day/week/month. When your **** starts to sink and you are losing money hand over fist, the best way to lose even more money is to trade on emotion. The only way to get around this is to limit your loses ahead of time and stick to that plan like it is Jesus Your Savior. Discipline will save you, intuition and trading on emotion will not.

    The second caveat is that you shouldn't put any money into this that you cannot afford to lose. You can seriously lose a lot a money doing this, and fast. By fast, I mean in a few trades. This business is not for the weak, the impulsive, or those easily swayed by stock shows on cable.

    Know what you are trading in. Forget the hot tips and stocks that are the most talked about. Is your particular kink aluminum siding and body panels for cars? Learn what Alcoa is doing or will be doing by reading trade magazines and websites. Keep your ear to the ground every day. Keep your ear to the ground all day, every day. Information is the herald of things to come, not hot stock tips from your broker friend or your neighbor.

    Trading is a lot like growing up. Learn to walk first. Then prefect walking. Once you perfect walking, try jogging. Jog for a year or so then try actually running.

    But never ever try to go from walking to running.

    My 2 cents.
     
  24. Ricambi America

    Ricambi America F1 World Champ
    Sponsor Owner

    I traded basically fulltime from 1998-2000 -- during the big boom, and did quite well. But heck, it was pretty easy back then. I used a company called On-Site Trading which cleared through Spear Leeds Kellog if memory servers me correctly.

    Trading, although profitable, was the WORST possible thing I've ever done for my emotional health. I couldn't sleep right, my guts were completly ripped up, and I stared at a Level II screen for about 6 hours each day (pre-open through noon usually...) To be sucessful in this game you need to totally abandon any idea of market research, company fundamentals, "story stocks", etc. Find something that's moving -- up or down -- and scalp 1/8's and 1/4's. Or whatever the decimal equivilents are. The #1 tip, bar none, is to set you stops, both in red and black. Greed kills. The second you hear that little voice say "it'll coming back, I know it will", you're screwed. Period.

    Now, having said all that, I was probably a lousy trader myself. For all the agony and suffering (and total cluster-**** that it did for my taxes), I ended up o.k. In fact, I still believe my current home was only affordable because of my trading Broadcom (BRCM) stock for 14 months. Long and short, I traded BRCM from about $40 to $260.

    Unless you're playing with somebody else's money, don't daytrade. It's not worth the agony and intestinal suffering.

    -Daniel
     
  25. androza

    androza Karting

    Nov 4, 2003
    86
    Its weird, a lot of the advice you people have given me are things that I'm already using. I only jump in and out of stocks, taking smaller profits on a company I know well.

    I hope I'm beating the trend, I've made it a month breaking even...
     
  26. TimN88

    TimN88 F1 Veteran

    Jun 12, 2001
    5,032
    Northeast
    Full Name:
    Tim
    That cant be true, but if it is i guess im lucky. I dont understand how people can lose so much money if they invest wisely in established companies. Its till possible to lose, im down like 4% in GE, but thats nothing to a penny that im down 50% in which i more than made up for in a penny that i was up 100%+ in (but now only 60% up). Overall im doing well. LAst week i was up about 7% in 1.5 months. I made some mistakes and learned from them too. Looking back, i lucked out.
    This week should be nice when earnings come out. I just picked up some shares of Alcoa (who actually does the aluminum for the 360 frame) today in anticipation of thursday when earnings come out. This looked like a good long term pick to me.
     
  27. JSinNOLA

    JSinNOLA F1 World Champ
    Sponsor Lifetime Rossa

    Mar 18, 2002
    15,223
    Denver, CO
    Full Name:
    John
    HOLY SHEET! I just realized my typo on the trading stat.

    The corrected stat is that 40% of traders(NOT 90%), lose 100% of their capital within 4 months.


    I apologize for the mistake!
     

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