Hi Ballsup, sorry to hear of your bad experience, and great that you giving another go, wish you the best to get back that loss and more... I'm a newbie too, a year ago was just watching in movies people trade and drooling over it (The Big Short anyone?
), by this June I have figured out how to register a trading account on CommSec, and managed to buy a total of 8 shares and sell 2 before end of October (not particularly day trading LOL). In the meantime I learned the meaning of such mysterious expressions like MC, FA, TA, cap and support (Google is still your best friend), and it was a light-bulb moment when I figured out what the colors and spikes mean in a candlestick chart
. In the last 2 months I have some more time to watch the market and actually trade, and even if I have made all the mistakes in the book and the Beast (market) is charging hard for the lessons it teaches, I have managed to not even preserve my capital, but to make some money, which I do cherish after seeing how easy is to loose it all. I'm a devout follower of the DT thread and kudos for the seniors for giving away so much insight and information. I'm yet to make a day trade, though not for the lack of trying. The shortest I have managed so far is an overnight hold and sell in the open with profit, but since that was within 24 hours, I consider it a day trade
. So I believe I have a true newbie perspective when I share my fragile newfound wisdom, and all the more experienced peeps please feel free to correct me, afterall, my perspective is just that, a perspective, and everyone's style and risk tolerance is different.
1. First of all, if you don't know yet what you do, do not try to win big and don't picture yourself in your beach side mansion you'll buy in just a few months with your trade wins. Casino is better for that kind of dreaming. The first aim is not to have more, but to keep what you have while you learn the trade (literally). So it does not matter if brokerage eats up most of your profits in the beginning, if you have low capital, do not bet big, play with small parcels and spread your bets in multiple stocks, and when you have a good history of winning more than loosing - or being stuck for lack of willingness to cut losses -, then you can slowly raise bets.
2. Do NOT try to day trade in the beginning!!! Sorry folks for saying so, I know it is a DT tread, and this is indeed the ultimate aim, but it is a skill that must be learned first. Most peeps here have years of experience and when they see a stock starting move on news, they are able to judge with reasonable accuracy and within minutes whether it is a worthwhile bet or a few pips pump and dump, because they REMEMBER its history. You and me, and many other newbies cannot remember for something we haven't yet experienced, so if we move we move on a tip, and even if its right, you are in blind and it is pretty easy to lose money on a runner if your entry is high and the thing just does not move up, and you are stuck while you watch it retrace. So watch first and act later when you are sure, and never cry for the one that got away, the more runners you watch the more you learn to recognize the patterns to spot it early and judge how much is in it.
3. Do NOT cut losses. At least not in the beginning. I see now that this is a great DT skill to be able to cut losses on a losing trade you misjudged so you have the capital to work another (hopefully) winning one, but to benefit from cutting loss, you first have to be able to day trade effectively. Again it is easy to loose money and interest fast if you see your capital shrinking. My best lessons are learned on stocks I got stuck in while either buying on a hype, or catching a falling knife. I have monitored them constantly in the hope they go back up, and I have learned a great deal on the behavior of the market reacting on news, FOMO, or rumor, and especially manipulation. PS.: I'm still stuck in a few but I got out of most of them by now and with profit. Winning a long fight after being stuck for a while does not only boost your bank balance, but also your confidence, so hold out, even if you sit on the sideline and just watch weeping great runners flying by with all your capital tied and your portfolio in the red. I do not say this must or will happen, but if it does, do yourself a favor and do not get out with a loss, if you have spread your money well, its likely some of those bets will start moving up and you can make a profit.
4. Listen to the calls, but do not act on them blindly. DYOR should be your primary motto, as even though most peeps are very decent and helpful folks here, some can have ulterior motives to hype stocks and even for genuine calls no-one sees the future and even the best intention can turn out bad. Besides, those who are able time entry and exit on a stock can win a trade on a call which can also turn out to be a looser bet if you do not get that timing right. Skills to learn and experience amassed first is a must.
5. Do not succumb to emotions. Hasty decisions out of fear, hope, greed, anger, and downright rage, are your enemies. Do not forget the market is akin to a beast acting on instincts, and a vast majority of those playing the beast transcend these very emotions into it. If you are able to identify these emotional motives in a stock, then you will be able to predict its movement with quite good accuracy, but if you act on your very same emotions, then you will just follow the heard and give your money to someone who is able to make decisions with a cool head.
Sorry for the long post, not a frequent writer, and I also mean this post to thank all of you contributing here for the great info, sharing of experiences, and in general for the feeling to be part of a like mined crowd, even if mostly just as a silent listener. Happy new years and a great 2018 to everyone!!
