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How long does it take to
learn to trade successfully?
What is the difference between Mentoring and
Consulting?
I would like to learn how to trade but hear
a lot of things about new margin rules making daytrading difficult. It
is still possible to daytrade successfully?
I would like to eventually become a full time
trader. How much can I make trading?
What is your opinion on penny stocks?
How many trades do you take per day?
I have heard that many chatrooms will often
"pump and dump" a stock and that many times when a trade is called it
can be difficult to enter because there are so many other people also
trying to enter. How is your room different?
What is Nasdaq Level II?
I often hear you referring to the NQ and
ES. Can you tell me what these are?
How are your charts set up? What studies
do you use, etc.?
What are the Nasdaq Trading Hours?
I
want to trade
online. How do I go about choosing a broker that is right for me?
The first thing to do is identify your objectives. The needs of a
trader depend on several things, including your account size, average
length of trade and even your location.
For
daytrading and swingtrading a direct access broker is considered by
most (myself included) to be a necessity. It is highly recommended you
do NOT use a broswer-based broker. My personal favorite trading
platform is provided by Terra Nova and is called Real Tick III.
I would like to trade part-time, but I still have another job. Is it
possible to trade part time and still be
profitable?
Yes. Your learning curve will tend to be longer
though. What I would recommend is quickly picking an area of the
markets to "specialize" in, whether it be swingtrading or trading in
first hour of the morning etc. This will allow you to become a
professional in one area of the market instead of jumping around where
you will be coming up against market participants with more experience
and knowledge than you.
What size of account would you recommend to new
traders?
Every broker tends to have different requirements
for a minimum balance to open the account. We feel that any trader
serious about learning to trade successfully though will start with a
minimum of 25K. This amount will allow you to take advantage of a setup
you like almost regardless of the stock's price. It will also allow you
to take positions with minimal risk to your overall account, allowing
for the mistakes that traders will always run into.
One thing that you must always remember when opening any trading
account is that you should do so only with risk capital. As such it
should only be a part of your overall portfolio and funds dedicated to
a more aggressive market approach. You should not attempt to day trade
full or part time if you do not have enough money to cover your basic
living expenses and other foreseeable needs for at least 6 months.
How long does it take to learn to trade successfully?
The average time it takes for a new trader to
start breaking even and turn their account around is about 6 months.
Prior to the time you should expect to "pay your tuition." Like any
profession, the more experience you have, the better your performance.
Those that start trading and are "instant successes" are merely
deferring their tuition and in many cases that interest is very high.
Do not be lured in to think that this will be a snap. You must have the
drive to learn if you are to succeed.
What
is the
difference between Mentoring and Consulting?
People often ask what
is the
difference between Mentoring and Consulting? In the old days you would
mentor under a master to learn the secrets of his trade. This would
often take many years and would come after a long apprenticeship. In
the trading world you can establish a mentoring relationship for as
little as a week with one of our online
mentoring seminars or as long as a several years with one
on one mentoring. During this time you will learn what the more
experienced trader can teach you.
With Consulting you spend a set amount of time with an experienced
trader and focus on one specific area that you need help with. This is
the laser method. It puts a lot of attention on a specific area for a
given period of time. Often these same areas would be included during a
mentoring program along with many others. The advantage of Consulting
is that it is offered by the hour and is thus much less expensive. A
few hours of consulting may give a trader that push that is needed to
make his goals.
I would like to learn how to trade but hear a lot
of things about margin rules making daytrading
difficult. It is still possible to daytrade successfully?
Yes. The new margin rules simply mean that if you
have less than 25k in your account you will not be able to use margin
to daytrade with. For more information on the pattern daytrader margin
requirements, please see our tutorial Making Sense Out of the
Day-Trading Rules.
I would like to eventually become a full time
trader. How much can I make trading?
It is impossible to state how any one trader will
do. Successful trading is a mixture of innate ability, personality and
the drive to succeed. In order to trade profitably you must be able to
control your emotions, accept personal responsibility for losses and be
willing to take the time to learn from your mistakes. Trading is not
easy. Most people do not have what it takes to succeed in this
profession. Among those who do succeed, their performance will often
fluctuate from year to year and the range in income is wider among
professionals than in any other field I can think of. So how much money
do I think you can make trading? I do not know. What I do know is that
we can give you an edge over other traders and that edge will often
make all the difference. What you do with it is up to you.
What is your opinion on penny stocks?
Not very high. They tend to be easily manipulated
and very dangerous to trade. Trading penny stocks is one mistake easily
avoided.
How many trades do you take per day?
Each moderator tends to give 3-10 positions a day
which set up, depending on market conditions.
I have heard that many chatrooms will often "pump
and dump" a stock and that many times when a
trade is called it can be difficult to enter because there are so many
other people also trying to enter. How is your room different?
First of all hype is prohibited in the Main Street
Trading Room. Our primary focus is on education and all stocks are
mentioned with that purpose in mind. Secondly, we only trade liquid
stocks with high average daily volume. On daytrades we prefer stocks
with an average daily volume of 750k/day and on swingtrades we prefer
stocks over 250k/day. Additionally, we avoid stocks with large spreads.
A spread is the difference between the bid and the ask. We also keep to
setups which are be easily explained to members and most positions
given are done so with ample time for discussion before they are
entered. If there is not much time before the setup occurs, then we are
always willing to explain setups and the reasoning behind them
afterwards to help members learn what we are looking for to aide them
in identifying the patterns in future positions.
What is Nasdaq Level II?
Nasdaq offers several levels of quote information
to its subscribers. Nasdaq Level I data provides the current best bid
price and ask prices, along with the trades that occur in each stock.
Nasdaq Level II expands this data to include the individual market
maker information for each stock. With Nasdaq Level II, for example,
you can see that the market maker, Goldman Sachs (GSCO), is quoting a
bid to buy 1000 shares of DELL at 24.76 and is offering to sell 1000
shares of DELL at 26.60. Nasdaq continuously compiles the various bids
and offers from all market participants to display the best bid and
offer data (Nasdaq Level I data). Perhaps the best bid price (i.e.
highest) for Dell Computer is currently from First Boston (FBCO)
quoting a bid of 26.35, and the best offer price (i.e. lowest) is
Merrill Lynch (MLCO) quoting an ask price of 26.50. In this case, the
Nasdaq Level I data will show a best bid/ask quote for Dell Computer of
26.45 bid and 26.50 offered.
I often hear you referring to the NQ and ES. Can
you tell me what these are?
In the live trading room we fairly often will look
to take positions in the overall indexes, or index tracking stocks such
as the QQQQ and SPY, rather than in a specific stock. As stock traders
we are often keying in on the indexes and then trying to find the
stocks that will outperform the index, however, with the leverage
offered by the futures market and the smaller contract sizes offered by
the "EMini" futures, taking a position in the index rather than a stock
can become quiet attractive for some people.
When
we
refer to the NQ, we are talking specifically about the NASDAQ 100 EMini
futures contract which trades on the Chicago Mercantile Exchange's all
electronic (think Island ECN) GLOBEX market. Each EMini futures
contract is 1/5th the size of the bigger ones which trades in an open
outcry "pit", and is equal to 800 shares of the QQQQ, which is a stock
traded on the American Stock Exchange, representing ownership in the
NASDAQ 100 index. The EMini NASDAQ futures (NQ) move in 1/2 point
increments with each point being worth $20.
When
we
refer to the ES, we are talking specifically about the SP500 EMini
futures contract that also trades on the Chicago Mercantile Exchange's
GLOBEX system. Each EMini SP500 contract is 1/5th the size of the big
ones traded in the open outcry "pit", and is equal to 500 shares of the
SPY, which is a stock traded on the American Stock Exchange,
representing ownership in the SP500 index. The EMini SP500 futures (ES)
move in .25 point increments. Each point is worth $50.
Over
the
last year and a half there has been an incredible surge in the
liquidity of both EMini Contracts. The advantages to a trader looking
to the EMini's is numerous. As mentioned above, a trader will have the
opportunity to focus on one market, allowing you to become more
specialized and also to not miss things that you may by flipping
through chart after chart looking for an opportunity in stocks. The
leverage available can be an advantage and a disadvantage both,
depending on how you use it. The best feature of trading the futures
though, in my humble opinion, is the HUGE tax advantage futures traders
enjoy over stock traders. If you are trading futures, 60% of your gains
are taxed as long term capital gains. For a successful trader this can
equal tens, if not hundreds, of thousands of dollars in savings.
Disclosure
Statement:
*THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL, YOU SHOULD
THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU
IN LIGHT OF YOUR FINANCIAL CONDITION.
How are your charts set up? What studies do you use, etc.?
TONI:
Weekly and Monthly Charts:
- Candlestick charts
- 5, 10, 20, 50, 100, 200 simple moving averages (sma)
- Volume
Daily
charts:
- Candlestick charts
- 10, 20, 50, 100, 200 sma
- Commodity Channel Index (P=15)
- Volume
Intraday
Charts:
- Primarily 5 and 15 minute charts. I flip to 30 and 60 minutes charts
briefly throughout the day to grasp the overall picture.
- Candlestick charts
- 20, 200 sma
- Volume
NASDAQ
Composite Index, S&P 500 Index
- Candlestick charts
- 5 minute up at all times
- Flip through other times frames throughout the day
- Volume
NASDAQ
100
Futures, S&P 500 Futures
- Candlestick charts
- 2 minute up at all times
- Flip through other times frames throughout the day
- Volume
What are the Nasdaq Trading Hours?
A. Regular Trading Session Schedule:
The
Nasdaq
Stock Market Trading Sessions
Regular Trading Hours from 9:30 a.m. to 4:00 p.m. eastern time
After Hours from 4:00 p.m. to 6:30 p.m. eastern time
The
Nasdaq
International Market Session
From 3:30 a.m. to 9 a.m. eastern time
SelectNet
Pre-hours Trading Session
From 8:00 a.m. to 9:30 a.m. eastern time
The
Nasdaq
Stock Market Regular Trading Session
From 9:30 a.m. to 4:00 p.m. eastern time
SelectNet
After-hours Session
From 4:00 p.m to 6:30 p.m. eastern time
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