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Thread: The Fine Art of Scalping

  1. Default The Fine Art of Scalping

    Example if you make $400 per week after taxes thats a modest $12-15 an hour approx you would be adding $100 a week and buying stock into a stock position once a month with $400.

    By years end you will have contributed $5,200 and with a 9% yielding stock like BACPJ you will have made (if the money was in the account all this estimate is off) $468 on your initial investment and by the next year you will have over 13k to trade with.

    If you made a more normalized income of $800 a week now you will have made almost $1,000 on your savings and have saved $10,400.

    Note: That's just based off of the dividend alone but I believe the market is up a year from now and so is BACPJ and GEG so in tern youd make even more money.

    You spend that time paper trading and reading and you should be ready to go in a year or two thier is so much to learn after years of investing im still learning every day.

  2. Default

    With paper trading you don't have the emotion involve with real trading. I think a better strategy is to back test strategies using your set of rules and then FOLLOW THE RULES with real money in small share size. Back testing a strategy is pretty easy to do and you can get some instant gratification if you're not patient enough to sit on the sidelines with a paper and pencil.

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    I didn't paper trade before I started, maybe I should have - I dunno. The only paper trading I did was to learn the actual physical technique of shorting a stop with Scottrade.

    You did alot of research before you got in though. It seems to have paid off for you.

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    trading stocks in not at all on the same level as being responsible for saving people's lives. it doesn't require the same level of expertise as, say, being a surgeon.

    we like to think we're doing something really spectacular by trading stocks, but the truth of it is... it's not terribly difficult. you can learn all the "rules" in a day of study. what's important is the experience.

    i consider it more like a game of tennis. you almost always start off playing against your competition and work up. sure, you might do some drills here and there... but hitting tennis balls against a wall just isn't the same. you learn by playing.

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    I will agree with doublereed when he says to trade in small share size while learning or trying a new strategy. Trade 1 share at a time. If you can't afford the commssions to trade 1 share at a time, then you cannot afford to be trading. Calculate the success of your trades without commissions, and when they prove to be positive, then, and only then do you move the share size up.

    Back testing a strategy is just as useless as paper trading, (as it is really, just another form of paper trading). Without real money on the line, any testing, or simulation in trading is a waste of time.

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    People say that paper trading is useless because it doesn't account for emotions and the fact that placing limit orders and stop loss orders in public view affects the market as professional day traders and the institutional computers make buy/sell decisions based on your orders.

    However, I use cooltrade robotic stock traders and all of my trades are done emotionless and the whole system runs in what they call "stealth mode", which hides my orders. it even allows my profits to run higher and wait for a small pullback in price before submitting the close order.

    I believe paper trading is fine for getting a good idea of how your strategy will work when you go live, as long as you don't manually trade based on gut feelings.

    CoolTrade Robotic Traders

  7. Default

    If you're a racecar driver, you first want to build the fastest car possible. You can THEN worry about learning to drive it. Sure, there's a chance that you'll never be a good driver and that building that car will have been for nothing. But if you DON'T have that fast car, you have NO chance of winning, regardless of how good a driver you become.

    Backtesting is for building the car. You can learn to drive (trade) it later.

    I disagree with the notion that trading is all "black box" or all "emotion." I believe that most legitimate trading is a wide-ranging mix of both "mechanical" AND "discretionary," which is NOT the same thing as emotion. Emotion is generally something that should be avoided. Those trading largely on emotion are probably not successful traders, IMO.

    As for virtual trading, my feeling is that it can be somewhat useful both for "building the car" and for "learning to drive it." It's definitely not perfect for either, but that's not the same as being completely useless. Yes, the big missing element is the emotional part--as in it's lacking the emotional roadblocks present in REAL trading. And new traders should be aware that the game will be much different when real money is on the line. But I still see nothing wrong with using virtual trading to get somewhat of a "feel" for things before jumping in with the sharks.

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