In this website, the topic of active trading is centered on day trading stocks. When I first started trading in 1990, day trading wasn't really practical for the home based retail trader.
There were gadgets you could get for supposed real time quotes, but in order to make a trade you had to go through the painfully slow process of calling your broker and placing a trade and waiting for a confirmation of the entry or exit. Later on, my brokers started using new phone technology and allowed trades through touch tone phones.
Back then that was a big deal to me to be able to place trades using the phone without having to talk to a person. You could also get delayed quotes over the phone as well. At the time, I thought all that was pretty cool.
I remember thinking how great it would be, to be able to one day look at a computer screen to see stock charts on the screen and be able to place trades directly from the screen. It was very exciting for me, being someone who was interested in computers to know, that it was just a matter of time before technology made that a reality.
Commissions per trade back then was $35.00. And, believe it or not, I was using what was called a "deep discount broker". That was a new term in the business, that the industry was pushing. At that time, it really was a deep discount, because if I remember correctly, my dad was paying his full service broker, Merrill Lynch, around $250 to buy just one stock.
So up until that time, I was making short term trades that lasted somewhere between a couple days to a couple weeks; mostly using simple breakout strategies I came up with from reading Investors Business Daily. That was my bible back then and what really got me started in all this.
At that time, and for a long time afterward, I wasn't interested in reading about anything else...... except trading and the stock market.
Even though I was inexperienced, I actually did pretty well. Looking back, even though I was a complete novice, making money was possible, because I never allowed myself to take large losses and I used really basic positions sizing rules (I didn't know what position sizing was back then), by splitting up my account into parts, and not trading only one stock.
Day trading for the home based player back in the early 1990's was completely impractical. It didn't become practical to day trade until later in the decade, when computers, computer memory and modems became sufficiently advanced -- the web came along, direct access trading made it's debut, and the cost of commissions came way, way down.
From that point, it was game on in day trading for me and anyone else with a bit of computer savvy and a flair for risk taking.
Day trading became really popular in the late nineties, when the Nasdaq was making it's giant run to the top. Stock trading was a hugely popular topic of conversation during those years at parties and social gatherings.
Everybody wanted to brag about how well they were doing in the stock market. And most likely they probably were, since the Nasdaq and the Dow were going parabolic at that time.
I traded mostly long side breakout strategies during that period which payed off nicely, since the market was on a tear to the upside. The market during those years was very forgiving to any mistakes made by novices.
Any trades that they temporarily turned into position trades, because of a lack of stops, came back in their favor due to the enormous bull market of those days.
But then came March of 2000 and the party was over. The traders and the party goers that talked about trading, that didn't use proper stops, got swept away in a new market tide going in the opposite direction.
Some probably couldn't cope with shorting the market, and adjusting to the new reality of a bear market, but most likely the biggest problem for the ones that blew up, was simply not having any idea about the concept of risk and trading money management (position sizing). I include all that here on this site, so be sure to take a look.
Over the years, I've traded mostly stocks and ETFs, but awhile ago got interested in trading emini stock index futures and commodities such as ES and CL (S&P 500 and Crude Oil). Let me tell you, those are tough markets to beat. Hone your trading skills on stocks, before jumping over there, because the competition is steep and the stop running is brutal.
This site is focused on day trading stocks for beginners, but I'm certain there is day trading information here that can be used by people that have been around the block, but just can't get things to click.
Even if you're experienced with active trading, go through the entire site......you just might find something that can help you be a better trader.
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