Day Trading Newbie

[Daveee]

Hey Guys & Gals,

I am a day trading newbie, have been on this site several times however never reallly did anything.

I was hoping someone could inform me where the best place to start is, whether that may be reading a certain book or participating in a class conducted by an expert or using certain programs

Any suggestions would be greatly appreciated :)

[Trembling Hand]

What are you trading? ASX stocks? Futs? FX? Bonds? etc

[kam75]

read Pit Bull by Martin 'Buzzy' Schwartz, a legendary Wall Street day trader. And don't waste your money on any damn courses.

[Daveee]

Hey guys,

Thanks for the reply, trading ASX Stocks

[Trembling Hand]

Hey guys,

Thanks for the reply, trading ASX Stocks

That's what I figured. You may want to first look at other markets. Better cost, spread and opportunities are in other markets. Though some may disagree.

[Krusty the Klown]

That's what I figured. You may want to first look at other markets. Better cost, spread and opportunities are in other markets.

Do you mean other stock markets or other financial markets?

[Trembling Hand]

Do you mean other stock markets or other financial markets?

If you want to trade Asian hours on an intraday basis you would be better looking at Futures rather than stocks. Much lower cost, and spread and no need to search for the action. I'm sure that there are some out there punting away on ASX stocks intraday but most that survive seem to gravitate towards futs or FX.

Whether thats SPI (ASX200) futs or other markets will depend on the person.

[MS+Tradesim]

I'm sure that there are some out there punting away on ASX stocks intraday but most that survive seem to gravitate towards futs or FX.

This is true. I daytrade ASX stocks when the market is right but the last two months has not been worth it, so I'm not even trying. At the moment head down, tail up practicing intraday FX trading. Extremely low cost, far higher potential than one would see in ASX stocks.

Davee, a few months back I put up a thread showing how I scalp ASX stocks (http://www.aussiestockforums.com/forums/showthread.php?t=15175). This is just my approach.

Also, have a look at Trembling Hand's Nothing to Something thread (http://www.aussiestockforums.com/forums/showthread.php?t=12683).

[--B--]

would you daytraders recommend forging a solid understand and experience of longer term trading before jumping in to futs or FX or very short term ASX Stocks?

[Trembling Hand]

would you daytraders recommend forging a solid understand and experience of longer term trading before jumping in to futs or FX or very short term ASX Stocks?

One of the often thrown around cliches is that you should be profitable on an EOD basis before trying intraday.

I couldn't think of a bigger waste of time personally.

Understanding of markets and how they move is the important thing (outside of knowing how to profit from them). Trading EOD will not speed up that knowledge. Through the 10 fold exposure to markets and their patterns intraday will give you a greater level of learning. Though if you are exposing yourself to distress rather than proper process it will just damage you faster than EOD.

[--B--]

One of the often thrown around cliches is that you should be profitable on an EOD basis before trying intraday.

I couldn't think of a bigger waste of time personally.

Understanding of markets and how they move is the important thing (outside of knowing how to profit from them). Trading EOD will not speed up that knowledge. Through the 10 fold exposure to markets and their patterns intraday will give you a greater level of learning. Though if you are exposing yourself to distress rather than proper process it will just damage you faster than EOD.

makes sense. i think many (myself included) are time limited at first by having a full time job and not being able to trade the aussie markets all day. i have certainly fallen into the 'ill just trade EOD after work' line of thinking.

im aware that FX and overseas futs are tradable 'after hours' and perhaps this is a direction i could take initially. however having already begun the journey of understanding ASX stocks and system design i question myself whether i should change direction now or carry on..

[johenmo]

One of the often thrown around cliches is that you should be profitable on an EOD basis before trying intraday.

I couldn't think of a bigger waste of time personally.

Understanding of markets and how they move is the important thing (outside of knowing how to profit from them). Trading EOD will not speed up that knowledge. Through the 10 fold exposure to markets and their patterns intraday will give you a greater level of learning. Though if you are exposing yourself to distress rather than proper process it will just damage you faster than EOD.


makes sense. i think many (myself included) are time limited at first by having a full time job and not being able to trade the aussie markets all day. i have certainly fallen into the 'ill just trade EOD after work' line of thinking.

im aware that FX and overseas futs are tradable 'after hours' and perhaps this is a direction i could take initially. however having already begun the journey of understanding ASX stocks and system design i question myself whether i should change direction now or carry on..

Thanks for the above. Been thinking the same thing. Will use the OANDA account now to "practice".

[Mr J]

im aware that FX and overseas futs are tradable 'after hours' and perhaps this is a direction i could take initially. however having already begun the journey of understanding ASX stocks and system design i question myself whether i should change direction now or carry on..

You'll save yourself a lot in commissions by avoiding stocks. I'm also not a big believer in having to 'know' any particular market, at least not for some methods. You can trade after hours for futures and FX, but it's better to just to choose a market that is within it's regular trading hours. E.g. an Asian market during our hours, Europe in the evening/night, and the US after 11:30pm.

[craigj]

as a fellow newby I recommend picking a few stocks that you like and watching how they trade each day.

AWE is one stock that trades consistently with a day movement around 10c most days. I have traded this stock a few times by buying and selling later in the day for a $350 profit

so try to hone in on a few stocks and learn how they move and check on candle charts to see past movements.

good luck

[Trembling Hand]

as a fellow newby I recommend picking a few stocks that you like and watching how they trade each day.

AWE is one stock that trades consistently with a day movement around 10c most days. I have traded this stock a few times by buying and selling later in the day for a $350 profit

so try to hone in on a few stocks and learn how they move and check on candle charts to see past movements.

good luck

This is why you should stay away from stocks. AWE has an avg range of 10 ticks!! You are going to need 2 ticks just to cover brokerage. You are wasting your time.

This is why people step outside their comfort zone and investigate real opportunities, futs and FX.

AWE for day trading........... forget about it.

[Mr J]

as a fellow newby I recommend picking a few stocks that you like and watching how they trade each day.

AWE is one stock that trades consistently with a day movement around 10c most days. I have traded this stock a few times by buying and selling later in the day for a $350 profit

so try to hone in on a few stocks and learn how they move and check on candle charts to see past movements.

good luck

I'm with TH, pretty horrible if the daily range is actually 10 ticks. Compare that to a range of 40+ ticks on futures, with each contract costing 0.6 ticks or less, and the spread usually being 1 tick. Then there's not just daily range, but how they move. I would imagine a future index has far more tradable movement than a typical stock.

[craigj]

you might knock my trading idea but it is a fairly safe stock with no debt

AWE range trades around 10c per day but in last 6 months the variance between sp high and low is around a dollar

a 10c range = 4% movement in sp

seems an easy stock to make some money with low risk

[Mr J]

I'm not knocking it. I know some people here trade stocks with low ranges in terms of ticks, but I would think it's usually a losing approach for most new traders. Maxmising the potential profit range and minimising the spread etc are usually critical.


a 10c range = 4% movement in sp

Okay, but I pay 1, maybe 2 ticks spread on the SPI (i.e. far less of may profits are spend on the spread), and I have many, many more possible entries and exits. My view is that the larger the range in terms of ticks generally allow for better profit potential, lesser risk, more profit potential and for a higher chance of success.

I'm not familiar with the stock so you may very well have a great strategy for it, but generally, I think markets that give larger daily ranges are generally more tradable. And if anyone asks, I consider that an issue of mathematics, not of trading experience!

[trainspotter]

Ummm Daveee ... you have been a member of ASF since November 2007 with 4 posts (if the info is correct) and have only tried to dip your toe in the water now?

Hmmmmm ..... any ideas as to what you would like to do in the future?

[Trembling Hand]

you might knock my trading idea but it is a fairly safe stock with no debt

AWE range trades around 10c per day but in last 6 months the variance between sp high and low is around a dollar

a 10c range = 4% movement in sp

seems an easy stock to make some money with low risk

Tell us what does your avg loss to avg win look like. You are really limiting yourself with the average win since it is only on your very best trades going to be 10 ticks. What is your 'normal' stop? 3 ticks? It doesn't matter a F what the % of share price move is, its the ability to get the odd out liners of 1:10 or even 1:20 and greater that will keep you in the game. Its all about R:R.

The other thing with picking just 1 share is you remove the biggest advantage of daytrading - repetition. How many chances do you get looking at 1 stock all day that only moves 10 ticks? Its forcing you to have a high win rate and blow MM.

Personally I wouldn't want to handicap myself in a game that already has a very low rate of success.

Would be interested to see your R:R stats, MM and frequency.

[wellborn]

Would be interested to see your R:R stats, MM and frequency.

really loved what you said ,

I am very new to day trading , and I started to day trading as a full time job , but after watching the stock market and also saw how huge is the brokerage with these low volatility and low liquidity stocks , I got really disappointed :confused:

can you please let me know how can I day trade futures and FX and which broker do you recommend ?

regards

[tech/a]

really loved what you said ,

I am very new to day trading , and I started to day trading as a full time job , but after watching the stock market and also saw how huge is the brokerage with these low volatility and low liquidity stocks , I got really disappointed :confused:

can you please let me know how can I day trade futures and FX and which broker do you recommend ?

regards

Drop your eyes 50mm

[SmellyTerror]

For folk looking at forex, and very new to it all, I recommend the Babypips school: http://www.babypips.com/school/

Not perfect, but a good grounding, and free.

In my (very limited) experience, Interactive Brokers (IB) is an excellent broker all-round. Get comfortable with the platform, set up some hotkeys, and you can hop in and out of trades very quickly and with a lot of control.

...but there are lots out there, so set up some demo accounts and go play.

[wellborn]

thanks for your patience to answer me ,
I started with IGM to trading cfd commodities like oil and gold but after a while I will try IB too

regards

[bullet21]

How much initial capital do you need to start day trading Index Futures? I know IB only require 10 g's but isn't that a bit low to cover variation margin.

[Market Depth]

I've day traded asx stocks for years. It can be done and you can earn a living from it. You need to be well capitalized to start though. 100K would be good for the 'Thick' stocks on the ASX, your banks, big miners and such. You first need to learn how to read the Market depth, or the tape, watch the spreads and wait and see which side the gaps are filled by. Practice this over and over and see if you pick the direction correctly. 'Live Charts' can be a little lagging, I tend to follow the tape,I never look at a chart, during the day. if you have limited funds the mids and smalls may offer some practice training, but they need to be liquid. You'll also need some stock filtering software to put you where the 'Crowd' is each and everyday. You need the crowd to make money. Volume is your friend.

As far as the FX goes, it's a good place too, but it moves fast, sometimes too fast, and if your slow merging onto a super highway, you'll get run over pretty quick. I tend to just short the FX, but you need to be patient, let all the speedsters run out of road and that's where I come in and go short, an entry to short is much easier, well for me anyway. It does take practice though, and you'll lose plenty, before you find the right side of the trade to be on, before it races away.

It's a funny experience to try, and learn, because you have to do the opposite of what you think you should do. When a stock starts to run up, you don't want to be trying to buy it. You want to be selling it to someone else who wants it. In other words you need to be in the trade before it runs, so when everyone rushing to buy, your standing at the top of the stairs holding yours out to sell. Understanding 'Market Depth' will give you that edge.