Scientist turning Trader yeah I'd like to be a Millionaire....someday
OK, I want to be a millionaire soon, but I am going to be realistic. I have been paper trading and have a small trading account with a somewhat obsolete broker (many times my orders do not get filled, and this is not only during high volume times). Anyhow, I have some actual money that I would like to proliferate into a million over the next two or three years. I think that is a realistic goal starting with 300k.
I have been paper trading on and off for the last five years, started off keeping track of it all in an excel file, then I discovered the TOS paper option.
What is wrong with science, Dr, you say? Well it is unbelievably slow for my taste and I have been labeled a rogue by multiple bosses, accused of thinking outside of the box too much. I caused them to second guess their own hypothesis That and the events of the last few months have caused me to question my life, it's been um....Virginia Woolf like; here I come Dr. Phil! I know the grass is always greener, but I will give it the old college try before I quit my day job.
I wanted to write a journal to help me keep track of what I am doing and most importantly get some feedback on my methods. Right now I am waiting for the arrival of my cash into my new IB account. I decided to go with this brokerage mainly because it appeared to be the most widely used broker among us non professionals trying to erg out a living.
Over the next few days I am going to be contemplating my entry strategy for this pile. I have to admit my last actual pile did not do so well, the bulls, the bears and the scammers all had a bite, now it's tied up in small caps that are not moving anywhere at all. I guess it can just keep on sitting there for now.
The biggest lesson learned with this small account -> Set rules and FOLLOW them rather than giving into those seagull noises in the back of my head "mine" "mine" "mine" (yes, I have a son). I have managed to get a handle on that and now I am kinda stuck in some loooooong term positions. I can certainly deal with the loss of 1k better than 100k, just have to keep rule in mind.
That aside, I do not think it a good idea to start off shorting, although I do find negative trends easier too predict for one reason or another. What are people into for midcap industries? I don't want to get my fingers in too many pies to start off, would it be advisable to start off with indices and big high volume guys like AAPL?
Also, I currently have a higher end run of the mill laptop, is it advisable to go over the top and spend 5k on one, some alienware? Or what the heck, I could buy another house and fill it with servers?!? No really though, have people found processor speed to make much of a difference when you are relying on the speed of your wireless router and cable connection then the broker and so on? Can I watch TV while I trade(just kidding, I think)?
One last note, if anyone is curious about clinical trials I don't mind helping to analyze the science behind the product being tested, in trade for good advice; obviously
Thanks for taking a look! Will update very soon, look forward to your advice, comments and defaming
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If you have that big a starting account, you may want to set aside a relatively small amount (maybe 10k) for practicing and trying out day trading futures or forex to see if you like it. And for a larger account > 200k, maybe check out options. And very much recommended using a sim >100k account for practicing option plays first for about a year or so. Here's a thread of selling options on futures where the ideal account size needed to trade this way is > 200k.
The past shows on tastytrade have good practical option trading strategies. I would watch them over the CBOE.com videos if looking for free videos on learning to trade options. (full live access with a TDAmeritrade account). "the Liz and Jenny show" despite the silly intro has good examples such as short strangles & condors today.
Also there was a recent futures.io (formerly BMT) webinar on options.
Last edited by Cloudy; October 16th, 2012 at 04:19 PM.
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I have been working on which instruments I would like to use. I know that I will be investing in some stocks and I am thinking about getting into options, but I am going to have to do some research on timing before I get into that. I may set some aside for a little forex trading, I think that I am going to start off playing it a little on the safe side. I think that I am going to put some money into stock backed mutual funds and try a little bit of day and swing trading on for size. I have read blogs and books, that range from tape reading to charting out patterns. The candle stick patterns I get, but as far as the moving averages are concerned does one use those as tools for intraday trading? I suppose that you would look at more closely fitted curves in order to use it for that. Tape reading is kind of a new thing for me, one would need to have access to L2 data feeds in order to see the DOM, right?
I am still working on my paper trading and trying to get the differences in Forex orders down. I didn't realize that there was one type that when the opposite order was placed it would not cancel the previous order out and therefore not end the trade. I can see how one might use that as they anticipated volatility over a range. At least it was just paper money that I was using. So, I still have another week to practice before the brokerage will release my funds, but have made 5k in my paper trading account over the last two weeks, which I do not consider to be bad.
All of that said I have been thinking a lot about price and volume this week. As I sat at church this morning next to my Grandmother reminiscing on my conclusion that I simply find persnickety people odd and somewhat difficult to deal with. I somehow ended at price patterns and volume patterns, who most affects those but the REALLY big spenders (it's OK to tell me that I am crazy and give it up at this point). OK, so I can keep in mind that that is public information, released quarterly. The oooooother thing I got to thinking about was that price matters -> so I want to know how the price is going to move before it moves -> well that is what I have been trying to do -> what am I missing here (other than complete sentences)?
Then the pastor was talking about dwindling church attendance and closing churches and yes while I know I should be thinking about how to help the organization out I was thinking that price and volume have such a direct relationship that there is no reason why they should not be considered together, and that in any situation they are directly proportional to each other and there must be an important factor that is not often considered. 'OK back to earth, time to pretend I can sing.'
I am home now perusing the WWW in search of some kind of answer, price and volume, price and volume, what comes up next, but a wiki on the NEXRAD (Next-Generation Radar) a network of 159 high-resolution S-band Doppler weather radars operated by the National Weather Service. Ok, this is cool I can get into this stuff, so they have this machine that basically evaluates the weather in 3 dimensions, precipitation, movement and acceleration or the change of rate in the movement (wind). Hmmm, three dimensions, we record these three dimensions in price, precip = price, movement of the price as a function of time and the rate at which it changes over time making the peaks and valleys of our beloved charts. So, how do we do this with volume? Well, we have the precip, esp detailed in L2 data, we have the movement of volume, the bar charts graphed as a function of time shown under the price, but we don't (or at least as far as I have noticed) really bother to think about the rate of change of volume over time. What if we did? What if we did that AND correlated it to the rate of change in time? Excel, here I come!
I think I have it figured out, I have attached a graph of the S&P 500 prices in blue from 9/26 to 10/26 overlayed by a Price per Volume for the day in orange (yes like a pumpkin). I wanted the average total price, but I could not easily find it, so I cheated and took the average of the high and the low of the day. The graph appears as though it could hold some valuable information, but to decipher that I will have to try this over many stocks over different time periods, scientists like to do it over and over, as the bumper sticker says.
At this point I can conclude that I would like to check out more of these comparisons to tease out some sort of meaning, and continue to learn valuable lessons from thread on this site, random searching/reading and paper trading. There is one other matter that I should take into mind and that is, maybe I should go to church more often and no I am not going to become a Scientologist. Hope you had a great Sunday!!!!!!!
Awwwww, darn I can't post an image yet. I will put it up in a couple of days. Wait there is a thumbnail in the preview, so I am not sure
"Whoah! Bessie is commin straight for us!!!!!!! Or is that a tsunami?!?"
I'm also an ex-scientist (geophysics) and following your journal with some interest, which interest stems from the fact with trading I've found it extremely difficult to make the transition from analytic thinking to intuitive thinking (i.e., pretty much everybody knows how to ride a bicycle, but if we think about it too much we fall down). In other words, not too much different than hitting the ground running out of school in science.
As a scientist I managed some degree of intuitive thinking in my field of research, and I've managed some degree of intuitive thinking about trading after a few years. Very interested in any corroborative observations regarding changes in psychology, or otherwise how you cope. I may be able to help with some big picture questions you might have about trading.
If you change the word "days" to "years" (or at least "months") you might have a chance. I wish you all the best, but remember you are fighting against professionals who do this day in, day out for years and years. It is not realistic to come into the market with an entry strategy you developed in a few days.
Also, you mention paper trading success. That is great - certainly better than losing paper money - but there are a whole host of reasons that will turn paper gains into real money losses. Paper trading success does not imply real money success.
Finally, since you are a scientist (I was a rocket scientist way back when, so I know a bit how you probably think), follow the Scientific method when figuring the market out. Come up with a trading strategy hypothesis, rigorously test it, then repeat about 100-200 times until you find something that meets your goals.
Good Luck! I look forward to following your journey.
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