A Passionate Intraday Trader.
A visitor's post to the "Your Trading Journey" page:
I've been trading from January 2009, never paper traded, I've paid lot of dollars every single little lesson that came from the market. I'm not a beginner anymore, but I'm not yet where I decided to get: being consistent and earn a living with trading.
I trade US equities only, I'm Italian and my working hours are terrible! My initial trading equity was 20,000 euro, recently raised to 50,000 and 10,000 to use margin.
I started reading books, I was hungry of knowledge about this world, that could really give me freedom and no roots. I programmed many indicators discovering some of them already existed as the Keltner Channel or some oscillators.
After 2 years of trading and a lot of readings I can say that books are nice, but you - talking to a newbie - will learn on the trading arena most of all and you will truly understand the content of those books after you've been trading for a decent time. Trading will tell you what kind of person you are too. Psychology plays a BIG role in this field. Interesting maybe, my trading evolution is parallel with my cognitive psychological work. As soon as I improved as a person, my work improved.
At the moment I have zero trust in indicators cause I consider them just a manipulation of prices and volume, two elements much more clear in their natural shape. I've created dozens and they all resemble each other. I use only moving averages, my own set of channels based on volatility and an indicator for the bar range on the market index. I follow the DJI.
My opinion is not that indicators are meaningless. My opinion is that you should choose a set of them and use them consistently - not jumping from one to the next or trying to find the one which predicts every low and high,you'll find this one but its accuracy will be very limited to a certain period - learning their shapes, their curves, their messages. It's like knowing a person, step by step, to create a unique complicity.
"Let profits run" is the phrase I should have never listened, "cut your losses" is more useful to me.
Every time I allow them to "run" I take a pullback and psychologically I'm usually not able to see a profit falling to zero and even against me. My advice here is this: if you make a profit, don't let the market take more than your gains IF you're not calm enough to bear the zig zags in what could be a daily wide range bar. A lot of times there's time to take a profit and be back in when a pullback comes.
Little bites at the end of the month make a big bite.
I am making money collecting little bites. Sure, this needs an high percentage of accuracy and I've got it, I'm wrong 20% of the times. Yet, this has not been enough to make money. Why? psychology. Fear to risk, fear to lose, fear even to win. Some words read only yesterday from the very first book i read more than 3 years ago: "people here don't need to show something, to prove something, to thrill themselves even if thrill is necessary; they're here to make a profit".
I said I'm using margin, I do cause I know what I'm doing...otherwise, stay away!
An interesting lesson among the long term ones is that "value" is not enough to drive a stock. I'm reading about how good would be investing in RIMM since price was at 60, now is...20? I've recently observed carefully small caps...rising fast, falling faster. If you want big and fast, be fast to take something.
I use a good software which allows me to program lot of stuff, has nice graphics - my eye wants beauty! - and alerts, lists, almost everything I could need.
I've read this site and the blog and I have finally found someone who speaks about trading, all the strategies are like the ones I use. The problem is, in my opinion, that controlling many stocks - each day a lot of them met the patterns - could make confusion and drive to make nothing. It happened and still happens to me, look here, there, like this, that and when I look at the clock it's gone half an hour.
For my style I have chosen to limit my observed stocks to 200 recently. " lists for nyse, 2 for nasdaq. I use the list of DJI too to spot easily the relative strength. This concept...relative strength...remind that: it changes even in intraday.
To complete my disordered description I add that my results and my accuracy improved terribly since I started using multiple time frames, daily, hourly and intraday 5min. and 1 min. This is what I read in my early times: "convergence of signals". An intraday breakout is good, if it corresponds to a breakout of a pullpack on the hourly chart is great, if it corresponds to a breakout of a daily level well...it's your piece of gold ;)
Last thing that could help newbies is: what rises too fast will pullback and what falls too fast too. So, if you want to buy, force to wait if it's rising fast already, if you're wrong and it falls down, try to wait a pullback too for a better exit. This has been true for me, I've seen lots of trades with losses caused by these fast movements sold almost always on the lows of them. It's frustrating. I use this concept to trade both sides now, buying the rally and shorting the pullback. Sometimes the stock is too strong to pullback but in that case it's possible to exit with a decent loss.
Definitely, I'd like to write and share too much, but something among my words I hope will be useful to someone trading his way to freedom, like me.
Barry's reply: Thank you very much for that very detailed description of your trading journey. Maybe one day you could drop by with a photo of your trade station for my visitors and I'll attach it.
You said, "never paper traded, I've paid lot of dollars every single little lesson that came from the market." I think that rings very true for most traders, including me. However, I must say, that if today's day trading simulators existed when I first started, I would have spent many weeks paper trading first before risking real money like I had to, before I really had a feel for how things worked.