Personal Trading...just completely baffled
Before someone tells me to use the search bar, here's some context:
I started a 5/10k account a couple weeks ago, diversified for about a 6 month outlook (I don't day trade). Because Scottrade transaction costs are institutionalized larceny and the market isn't moving at all, I'm pretty much flat for the year. Given how little capital is involved, I doubt I'll have more than a couple hundred bucks (best case) by the time school starts up.
So, in order to get some more "income", I want to engage in more trading-like activities rather than investing. We're not talking about anything crazy here, spending cash at the most, and mostly just for the learning experience. I'm fairly risk-tolerant, even though I probably can't afford to blow the entire 5K (not trying to turn it into 100k, but doubling it with some unacceptably risky bets would be nice). Also, I won't be day trading--the opportunity cost of spending all day in front of the comp seems way too high, I'm not trying to skip class, and all that mental effort for what might be breakeven or even $1000/day (in the best case) just seems immensely boring to me.
Further, I'm a total and complete novice. Don't know how to size positions, don't know what a winning or losing "strategy" is, couldn't define or come up with a strategy if my life depended upon it, don't know any technical analysis beyond what support, resistance, and breakouts are, and God help me if I have to identify a chart pattern.
What style of trading would suit my objectives best, what kind of return can I expect if I do well at it given a small scale, and where can I go to learn? If I try to do something riskier (forex/options/futures), where can I go to learn more? Honestly, even for straight equities, what can I do to get a simple, barebones, teaching-trading-to-a-5th-grader start on the kinds of software I need, simple strategies to try, and things to look out for? For book suggestions, I'd prefer more "Trading for Dummies"-style suggestions instead of storybook-style accounts of people who made a ton of money off certain ideas, just because I need some grounding in the former before engaging in the type of thinking the latter might spur.
Finish your school, get a good job, then comeback and pursue your interests in the market.
Go through the school at babypips.com. It should be a good start for learning technical analysis and some other useful stuff. Use what you've learned and trade with paper money and then when you are consistent trade with your real money.
Edit: Not sure why this is a response to someone else..
Please don't try and day trade. Outside of purely getting lucky you are going to get crushed man, it's a tough game.
Haha I'm not (outside of little paper dabbling this summer), for the various reasons mentioned above. On the flip side, a dead market going sideways generates 7-8bps swings for me either way every two weeks--that's not ideal.
So if investing is too slow, and day-trading too time-intensive, is there a risky Goldilocks that can be picked up? Let's keep in mind I'm playing with fairly little capital here, but still would like to play swings that are a little more rewarding than a 6-month/1-year horizon.
investopedia.com
Explain how Scottrade commissions constitute "larceny"? $8 bucks a trade is nothing. If you're down for the year and blaming commissions, you're being delusional. Even in options where you also eat a $5-10 bid/ask spread per contract it shouldn't be that onerous. We're not talking about trading junk bonds with $500 of bid ask getting taken out of 10k par are we?
Chill I was just kidding around...now Schwab is where the real theft is.
All I'm saying is that I've been in the game for 8 trading days, having taken a grand total of 8 positions on 5k, and the TCs have thus taken a chunk out of miniscule gains. It really is beside the point.
Are you fuking retarded?
i think you'll do better with a few well thought out ideas that you hold for 6-18 months rather than trying to swing trade the market. Go to valueinvestorsclub.com and sign up for a guest account. Ideas will be a month old but for the most part the thesises (thesi?) are still pretty intact. Lots of high quality investment ideas on there. With 5-10k portfolio you probably want no more than 6-10 stocks in your p.a. It will be risky, but again as you said, your risk tolerance is pretty high here. You should be able to get comfortable with each of those investments with something like 0.5-2 hrs of initial research per name. Obviously you can spend significantly more time than that on any one idea, (and you should if you're really interested), but that's a decent research hurdle given the capital you're putting at risk.
Might want to give a look or two at
http://www.dividendgrowthinvestor.com/
Basic concepts, that with some knowledge on option writing into and out of positions is a pretty good foundation to start with.
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