Moving From FT To Day Trading
Q: I have a job totally unrelated to day trading, but having done a lot of reading, and trading (while at work), I will be using my rec leave to do just that - day trade - as a precursor to possibly tossing my job in and doing it full time. I feel confident about what I have learned about day trading, and myself in the process - but wonder about the psychology of doing so.
A:
Paper Trading? It's not the same. No pressure, greed, fear, filing are
not the same. One is better off not paper trading at all because you will get
into bad habits that are hard to break.
Reading Technical books for the mechanical part of trading and for the
sociological part, get a copy of Kenny Rodgers " The gambler" and follow those
a
What trading package do you plan on using for trading? If you are going to take
the leap, make sure your using the best trading tools available. Most packages
out there do pretty much the same thing - basic charts, news, simple order
execution. They do not provide advanced analytics that really enable you to
analyze the market moment-by-moment and help you see the bigger picture while
analyzing the Market Maker screens. You may want to check a program called
SPECTRE Level IV (SL4) at www.spectrenet.com/sl4. The program analyzes the
Market Makers who are actively trading stocks and derives precise information
and opportunities based on that and many other variables. If you read Farrell's
book Day Traders Survival Guide it describes how exactly these types of alerts,
strategies, and analysis are required to have a chance of success in day
trading. Yu's book (Underground Trading) also points out market maker tactical
analysis and how important that analysis is, especially when combined with the
bigger picture. SL4 can even extend out support and resistance trendlines on
multiple timeframes automatically onto a chart, so you can immediately see where
the stocks are trading on a moment by moment basis, and look to play off those
points as potential reversals, etc, by watching the other info. it's giving, and
also by watching how the controlling market makers (that it immediately informs
you by precise ranking for each stock) are acting (or reacting) at that price
level. It even gives you alerts as to when stocks are at or breaching these
trendlines in realtime, which is really powerful in identifying new stocks, ready
to make a move - especially when multiple timeframes all line up together. It
also protects you from being blindsided by larger-time frame forces, since it's
sometimes easy to get caught up in the smaller jiggles. Hope these thoughts
help you along! This is a tough game if you don't have the right edge and a
sound strategy.