Just Starting Off

RotorWash said: "Hi, I'm thinking of getting into day or swing trading. I was wondering if any of you could offer a little advice. What online trading service would you recommend? E*trade, Ameritrade or do I need direct level II access to make it work? My current plan is to paper trade for six months or more until I've proven to myself I can come out in the green. Do any of these services let you make virtual trades like that or do I have to just keep track on paper? What sort of minimum capital do I need? I think I could front $5,000 or so but $10,000 would be a stretch. Am I better off not trading with such a small sum? i.e. Would commissions eat a whole in my pocket before I could stand to profit any? Any other advice you could offer would be greatly appreciated. Thanks, Steve"

Darren said: "for daytrading you'll need a specific daytrading account and level ii. swing trading is a lot less stressful for beginners."

byronio said: "At Scottrade.com you can start a margin account with $2,000. With that account you can do 3 day trades within any 5 day period. With a $20,000 account you can do unlimited day trades. I don't think you can do simulated trades there for practice. I believe you can make decent money. It is $7 to buy and $7 to sell, plus a half a percent of the total dollar amount of your purchase if the stock is under one dollar. If you have a $2,000 account, every one percent gain in the stock price represents $20. Of course, you have to factor in the $14 needed to do a complete trade (buy and sell) as well as the spread between bid/ask, but you can get good at picking stocks that offer good upside potential with limited downside risk. But it's like Blackjack, you maximize your gains and minimize your losses, so you can actually make more bad picks than good ones and still come out ahead. If you can improve your picks, so much the better. Also like Blackjack, you have to have a betting strategy as well as a playing strategy. The thing is to preserve your money to ensure a certain number of trades. Limit your losses strictly. Take the emotion and wishful thinking out of the equation. Set strict rules, only trade on the cleanest setups, and don't break the rules you establish. I'm new at this, too, but have been profitable while I learn."

RotorWash said: "The way I understand swing trading is that it's similar to day trading only you hold your positions for 1 to 4 days. I'm guessing it's not as important to have an instantaneous response to your sell or buy orders but the principles are the same. What sort of up and downs can you expect over 1 to 4 days? 1-2% or 5-10% increase and decreases. I'm looking to specialize in just one or two stocks, what should I look for in terms of volume and volatility? Would you recommend trading in GE or the S&P Spider stocks or are those not volatile enough? What service is best? (Scottrade, E*trade, Ameritrade) Are they all more or less the same? Do they all offer candlestick charts and real-time quotes? Finally, if you were starting-off, who would you go with and what kind of capital would you bring with you? In other words, how can I learn to swim without first getting eaten by the sharks?"

Justin said: "[QUOTE=byronio]With a $20,000 account you can do unlimited day trades. I don't think you can do simulated trades there for practice. [/QUOTE] So the 3 business day thing for finalizing trades is just ignored by Scottrade if you start an account at 20,000 dollars? How does that work exactly? Do they just not care about you buying and selling on money that isn't exactly finalized yet just because you started with more money? I looked on the site and did not see any information about this."

AlfredSokol said: "[QUOTE=RotorWash]The way I understand swing trading is that it's similar to day trading only you hold your positions for 1 to 4 days. I'm guessing it's not as important to have an instantaneous response to your sell or buy orders but the principles are the same. What sort of up and downs can you expect over 1 to 4 days? 1-2% or 5-10% increase and decreases. I'm looking to specialize in just one or two stocks, what should I look for in terms of volume and volatility? Would you recommend trading in GE or the S&P Spider stocks or are those not volatile enough? What service is best? (Scottrade, E*trade, Ameritrade) Are they all more or less the same? Do they all offer candlestick charts and real-time quotes? Finally, if you were starting-off, who would you go with and what kind of capital would you bring with you? In other words, how can I learn to swim without first getting eaten by the sharks?[/QUOTE] The first thing you have to do is have a strategy for your capital. How much capital to start, etc. Specializing in one or two stocks may be a really good idea, because it will give you a good idea of the technicals and how the stock "acts" on news. Scottrade, E-Trade and Ameritrade are all relatively equal and could easily be used."

thezster said: "[QUOTE=RotorWash]Hi, I'm thinking of getting into day or swing trading. I was wondering if any of you could offer a little advice. What online trading service would you recommend? E*trade, Ameritrade or do I need direct level II access to make it work? My current plan is to paper trade for six months or more until I've proven to myself I can come out in the green. Do any of these services let you make virtual trades like that or do I have to just keep track on paper? What sort of minimum capital do I need? I think I could front $5,000 or so but $10,000 would be a stretch. Am I better off not trading with such a small sum? i.e. Would commissions eat a whole in my pocket before I could stand to profit any? Any other advice you could offer would be greatly appreciated. Thanks, Steve[/QUOTE] Level II is cute, but not necessary. Paper trading for experience is a great idea.... though I've a few addages... and one of them is "as soon as you think you've got the market figured out... you get killed". You can get started with low dollars as you mentioned.. However, you need to be able to buy blocks of stocks large enough for a small change in price to make you money (or lose you money). My minimum is 500 shares of "anything". Another rule to consider is: if you make 4 or more trades on the same stock in a week (this is loosely written), you are considered a "pattern day trader" by the SEC. This requires a minimum $25,000 balance in your brokerage account, assuming you're playing with margin (who doesn't). If you're playing with $5,000 - $10,000.............. I personally would suggest playing for the long term..... It's just not enough money to buy enough "solid stocks" (penny stocks are highly volatile and as such - very dangerous) to make any serious money. Personally, I play with 3 accounts....... my "Swing Account" with a base of $50,000......... My short term account (hold at least a week) of $250,000........... and my long term account (boring) of $20,000. Combined, I'm able to average about 30% return/year over the past 6 years...... And, as it ends up........ the "short term" account...... is the most profitable.... Good luck..... take the money and run............"

AlfredSokol said: "I think you're right about account sizes. My $5,000 account is just not big enough to make much money on."

thezster said: "[QUOTE=AlfredSokol]I think you're right about account sizes. My $5,000 account is just not big enough to make much money on.[/QUOTE] Then again......... I started 6 years ago with a 10,000 account with margin benefits...... Slow and steady was the key....... Today, for example, I bought 5000 shares of the big Orange Box..... And should have bought 5000 more. Quite a change from when I started.... Woulda/coulda/shoulda.......... My favorite Mantra!!!"

jellystone1 said: "Stocksquest or simustock are good trainers for buy and sell games. Simustock may be better for day trading and penny stocks. Seems to cover a broader range of equities with fewer trade restrictions. Looking at the replies it seems you might want to consider more than a couple of stocks in order to avoid the restrictions on trading the same stock too often. Might wish to check out some of the pickers as well. Everyone cusses Cramer at one time or another but his low cap promos do tend to go up after his show for a day or two at least. Also check the free picks from gopenny. Only started this myself but following up on a day trade basis on simustock up 56% in 10 days following these leads. Good luck!"

rotorite86 said: "I don't have a *real* account, because I am still in school (college) and don't have the funds for that. So, I have a portfolio on Smartmoney.com and Investopedia.com. On Smartmoney.com you can establish how much you want to start with (I did $15,000 to be realistic) and on Investopedia, unless you create a new game, its $100,000 initial value and up to 50% on margain. Smartmoney's forces you to enter your own brokerage fees, while I believe Investopedia charges a fee (not quite sure what is). I usually play realistically, as in not dumping a ton of money into one stock (Investopedia does not allow more than 25% of the total portfolio in one stock), so that I am not winning on trades that the average investor would never take. On Investopedia I have been at lows recently, around $98,000 value, but was around $110,000 just a few weeks ago before the market decided to crap out. Smartmoney I am currently in the hole for $710, though it is a new portfolio, so that isn't surprising. The charting tools and information available on Smartmoney.com is very good. When using Investopedia I normally go eslewhere for information because Investopedia isn't very good for that. However, for a beginner, Investopedia has a TON of information, free of charge. Obviously you have to pay for some stuff, but you can learn a lot for nothing."