I have started paper trading in July and did great. Then, in August, I started to trade with real money and broke even or had small losses in the first month. Soon, in October and November I had my worst months. I am now down almost $6,000 and it's so frustrating.
I overtrade so much that I have stopped making notes about my trades. I decided to write this for myself to put down on paper, so to speak, everything I think about my trading. So... this is what I am doing wrong and I know it:
1) I scalp and nothing more. I do not have enough patience to let my trades work. This problem with scalping and overtrading came to me so naturally as I would have a bad trade in the morning and then for the rest of the day I felt like I had to "make up for it". Every time I have a tiny gain - I just want to lock it in.
2) I use SureTrader and the fees are awful! After yet another scalping type day of trading I would look at my P&L statement and it will look good - green. Then, you look at your actual winnings just to see that you have nothing but loss again... Plus, SureTrader is the only one who lets me overtrade as I don't have enough money to be a day trader with any other broker.
3) I have studied all this time and at one point was a member in 4 different chat rooms. I have studied with Tim, Nate, Jason, and Jeff and they all warned their students about the mistakes you will make so that you don't make them. So.... I studied, and I still make these mistakes. I am simply more comfortable with scalping and that's all I know. I understand now that I scalp because I don't have any confidence. This is a huge issue and I am just about ready to quit along with the other 95% of traders who don't succeed.
To get better and finally start making money trading I MUST:
1) I have noticed that most of my green trades happen in the morning. I will usually have one to three trades between 9:30am and 10:30am. I would say about 80% of the time I will do good within that first hour. Of course, at the end of the day I will have a loss because I have traded through the day with little volume. This has to stop. I need to turn everything off and walk away from my computer after the first hour, regardless of the morning trade outcome.
2) Since I am only comfortable with momentum trading (or as I call it scalping), I will probably just stick to that (for now at least). It is really not that difficult to scalp in the morning - the volume is there. Like I said, most of my gains come from morning trades.
3) I am part of only one chatroom as of this week. This should help a lot.
4) Study more, again and again. It has to stick sooner or later...
That's all I can think of right now - Will be adding more as I HOPEFULLY make this transition into a better trader.
If anyone happen to read these pathetic notes, please feel free to share your thoughts.
I'm not a profitable trader I had my first break even month last month after 5 months of losing and I think you need to stop scalping all together. You will be getting destroyed by commissions and it's just not good ROI. Limit yourself to two trades per day MAX. Sometimes there may be no great play for an entire week! If you do this you'll at least break the downtrend you're currently in.
Is it possible that the only reason you're scalping is because your scared of losing? I did that when I just started trading. The second and stock did what I wanted, I got out of the trade to lock in profits. And the second a stock dipped I sold out of fear.
I lost a lost of money like that. To combat that I now trade with a 500 dollar position size on robinhood. That's right, position size not risk amount. I'm trading with this little to help curb my fear. I'll be OK when I'm down 30 bucks but not when I was 300. Maybe something you could try instead of paper trading which takes out all the emotion?
Thank you all for all your comments. Much appreciated!
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