First Day Trading at Prop Trading Firm

Long time no see.

Hey everyone, I know I disappeared for a while but I dealing with personal issues and didn’t have the motivation to post.

Long story short, at the end of August 2018 I got fired from by job and the whole process was mentally taxing. I didn’t know where I would make money now, and it put my trading goals at an abrupt halt.

I started driving Uber to pay for the bills , and kept applying to jobs every single day.

For months I had gotten no response from any employer and the depression was beginning to weigh me down even more.

Should I go back to school even though I would hate it? Should I go to trade school for construction or plumbing?

“But I love trading, I don’t want to do any of those things.”

One morning I went to the library to apply for more jobs and came across a job posting looking for equities traders.

I told myself “I’ve been trading for about to 2 years and involved in the markets for 3 years. i haven’t been successful but I do have experience. Just apply, you never know”

I wrote a heartfelt, detailed cover letter explaining my love and passion for trading as well as the experience I had accumulated over the years.

Email sent.

The very next day I got a call from the trading firm. He asked me to come in for an interview. I was shocked that after all these months of applying to jobs I never really wanted and getting no replies, the one and only job opportunity in the field that I actually wanted to be in replied to me the very next day.

I was nervous, but excited.

Next week I went in for the interview. I waited in the lobby and saw a room of people on computers. it didn’t look like much, but still happy to even have an interview.

The manager comes out from another door, and says “welcome, come on in. Let me take you to the Trading Floor”. I looked confused, because I thought the small room in the lobby was the trading floor.

He takes me through 2 different password locked doors, and boom.

A real trading floor with real traders. About 25-30 traders, screens everywhere, 4 and 6 monitor setups. I felt like was in trading heaven.

The manager saw how excited I got and loved it. He later told me I would begin training in about two weeks.

I thanked him over and over again. With a smiling face he said “Lets make some money. Lets trade some stocks”

Music to my ears.

I trained there for about a month and a half, hitting different goals assigned to us.

Yesterday (April 5th, 2019) was my first day trading my live account there.

I made $22 dollars. Some people will say that 22 dollars is nothing. I agree its not much, but for my confidence it was worth millions.

Just sticking to my set ups with tiny size, I just had to start building my confidence first.

Its not a race, its a marathon.

I will keep everyone up to date on my progress and my journey, here and maybe a YouTube channel soon :).

Thank you for everyone who reads my posts and I hope they help you not only with trading, but through your marathon through life as well.

God Bless.

Advertisements

What 4 Reasons Cause Traders To Blow Up There Account?

881170928-612x612

 

The dreaded account blow up. There may not be a worse event in trading stocks than to to run your account into the ground.

On the outside we think “that will not not happen to me” or “they are stupid to let that happen”. Well it can happen much more easily to any trader than you think.

It is essential that traders are always in a position to take a trade. Blowing up an account not only means losing a great portion of your account value, but it usually means a trader can’t participate in any more trading activity, thereby letting other great trades slip away.

I’m going to share the 4 main reasons why traders blow up their account so that we can be more aware of the scenarios that we are in, and hopefully prevent a blow up from ever happening.

1.) Addictive Trading.

This can also be referred to as over trading, but on a more broad sense, any type of trading that is done compulsively, or with no control. This is dangerous because of how quickly the losses will sneak up on you.

My first blow up account was do to me over trading. The worst part of it was that I didn’t realize how much I truly lost  until it was all said and done.

In total I lost about $700 dollars on a $1,200 account, in one morning, over the course of 5-6 trades I should have never taken in the first place.

Over trading was one of the factors that caused me to blow up, but there was another factor..

2.) Revenge Trading.

This is the main factor that caused me to blow up my account, and also a major cause of many beginner traders blowing up there account.

For me, it all started with a trade I held overnight. I was up about $30 dollars and was trying to close my position (with a terrible broker) and it took about 3 minutes to fill. My trade then closed out with a -$30 dollar loss.

I was so upset that my I just went from green to red just based on a ridiculous fill time. So I quickly tried to find a trade I could get into to make up the loss that I just took.

Well I took another loss which made me even more irate, then quickly jumped into another trade, with more size to try and make up for both losses…

Long story short, a $30 loss turned into a $700 loss by the end of the day….

That’s the cost of letting your emotions rule your trading.

3.) Trading Too Much Size

This is the main reason that kills the account of an intermediate trader. Someone who has been somewhat successful with trading and is now consistent.

He or she thinks they are so consistent now that they should now increase the amount of size they use by a drastic amount. For example, 1,000 shares to 7,500 shares.

They often do this without realizing that increasing size by this much isn’t as simple as they assume it to be.

There is an huge increase with P&L gains or loss, which can shake you out so quickly because you are only used to seeing your unrealized loss at  -$100 dollars when the stock goes down $.10 cents.

But now you are seeing an unrealized loss of  -$750 dollars if you now use 7,500 shares.

There is also slippage. So you can fill 1,000 shares at $5.00 fairly easily. It gets harder to get the exact same price for all 7,500 shares.

All these things play a factor in blowing up an account because if you are in a position with much more size than you are used to, then there is a high probability that you will panic and let emotions begin to do the trading for you.

You see a huge unrealized loss and start to think, lets let it come back, and because its bigger size, each down tick adds on to that panic, until…….BOOOM, 50% -100% of your account is gone.

Some will say that sounds exaggerated and it sounds to quick.

That’s how quickly it can happen, my friends.

4.) Poor Risk Reward.

There is a reason why real traders say you have to have at least a 2:1 Reward/Risk Ratio. it means you can have 2 losing trades and make 1 winner and it covers the losses.

What happens when a traders Reward/Risk ratio is off. He/She is now fighting to stay alive.

So many new beginner traders do it. We cut our winners quickly because we are happy just to be in the green and we fear it being taken away.

And on the other hand we let our losers run because we don’t want to take the loss and we pray that the stock will turn back in our favor.

This scheme will ultimately only return bigger losses than your wins which , if not changed, will blow up your trading account over time.

 

 

 

 

 

How Stock Traders Can Make Millions With Minimal Trades

call-of-duty-ghosts-game

So this post is mostly to change the perspective of what we look at when we trade, especially the way we think of trading profits.

I’m going to put this spreadsheet out first, and then explain why I think its important to look at trading profits the way that its laid out in the spreadsheet.

2018-09-06

Now obviously there are going to be people who are going to say “THAT IS UNREALISTIC” and “YOUR GOING TO HAVE LOSES”.

Obviously your going to have losses when trading. Your most likely not going to be going all in on all your trades, and obviously your not going to hit your profit percentage every single time. 

I know, I understand. Now that that is out of the way, let me break down why I truly believe this chart is important.

When I  look at this chart, the number one thing that comes to my head is..

How little trades it took to get to those high profit numbers. I believe this is important because so many of us traders over trade, even when we think we’re not. 

The reality, it truly doesn’t take that much trades to get to the desired target you want.

I believe it is more about patience however. In that spreadsheet it shows that it took only 30 trades to get to get to to pretty ridiculous numbers, with varying percentage gains of course.

This is the power of..

Sticking to your setups, that also give you great risk reward. The reason why the numbers increase so quickly is not because there are a lot of trades being taken, its because when a trade is taken, the return is bigger than a usual day to day return.

So, you can try to take 10 trades a day and make $5,000 in a month, going back and fourth from winning trade to losing trade, which is fine.

Or, you can try and snipe those easy trades, those easy set-ups that don’t arrive as often as the everyday plays, but can provide huge returns.

I personally prefer sniping trades. For me, its less stressful and more rewarding. I don’t like being the trader who has to try and $.15 – $.20 cents on a position everyday. The sniper method is more calm and relaxed. Simply waiting for the opportunity

Would you rather chase around mice everyday to kill and eat?

Or would you rather sit up at the hill top with a sniper and patiently wait for a big herd of deer to cross your path. You don’t need to kill many, just one. Because that one will do much more for you than a months worth of mice you caught.

The other important aspect is having profit targets on every trade that make the “hunt” worth it.

Find plays that will pay out big if they go in your favor, and simply cut them when they don’t. Just because you have a bigger profit target in terms of where your exit is on the chart doesn’t mean you have to risk more capital.

You have the option to hunt “big fish” so you don’t have to stress about hunting everyday, Or trade everyday, as long as it fits your personality.

Obviously this is just my advice. If your personality is to scalp 50 times a day, I am not knocking that at all. As long as it works for you. I just think that a lot of beginner traders don’t truly understand that in trading, less can be more.

Much more than we think…

Why You Are Not Consistent With Stock Trading, And How We Can Fix It

bigstock-Time-management-businessman-7436741511

 

One the benefits of trading is that we can work from the comfort of our own home on our own time. We can wake up in our underwear,get a cup of coffee, and not stress about an hour commute in traffic on the way to a 9 to 5 job.

But having this much comfort and accessibility can also be a detriment to our trading career in the long term.

I have personally done this myself, and can attest to how poorly it cam affect your trading if your “freedom” is not tamed.

For example, when I got too comfortable with trading I would roll out of bed at 9:00 Am, rush to get everything set up, such as my broker and scanner platform.

At first I thought I could pull this off, but I quickly humbled with loss after loss. It was self evident that it was a direct correlation with me not having a plan prior to trading.

It was also do to me not having the same routine everyday that ensured consistency overall.

You can’t expect to live an inconsistent , out of order life but trade consistently and execute plans to perfection.

So in this post I am going to go over some questions that each trader should be asking of themselves to help ensure consistency and hopefully make you a better trader because of it.

What Time Do You Wake Up Each Morning?

If you cant answer this, it is a major problem, since the time you wake up is your first trial of consistency.

The time you wake up should somewhat reflect what type  of trader you are. For example, a lot of scalp traders can get away with waking up at a later time because they are less worried about pre-market and market sentiment. (I still recommend every type of trader know is familiar with both.

What Do You Eat For Breakfast In The Morning?

Diet will become a key role in how you trade because it can effect your mood.

Do you wake up and eat unhealthy foods riddled with grease, unhealthy fats and low nutritional benefits??

Foods like this will often leaving you feeling sluggish and fatigued (which has personally happened to me on many occasions.)

I would wake up and the first thing that would enter my stomach was left over pizza and a sugary soda. This automatically gave my body an insulin spike, and then when 9:30 EST time came (Market Open) I was crashed on the couch dead asleep.

In my opinion the food you eat in the morning should be on the lighter side, so that it doesn’t send your insulin out the roof and come crashing down later.

I usually start off with water and a smoothie made with bananas, different berries, a pinch of cinnamon and nutmeg, low sugar vanilla yogurt, almond milf and spinach.

When I drink it I feel full, but it doesn’t leave me feeling tired because it doesn’t have as much sugar as other fast food “smoothies”.

I also gain confidence knowing that I am continuously fueling my body with good healthy foods , and in return I know my body will pay me back for it.

Just the same as when you give your sports car the best fuel and tires available, the car will most likely give you optimal performance. Now you have more confidence because you know you get out what you put in.

Do You Exercise Before You Trade?

I love getting in a good workout before a trading session. Not something that is too taxing on the body that will make me tired throughout the day.

Enough exercise to get my body loose and gets the blood flowing.

For me personally it is a away for me to release any tension I may be carrying, as well as a release for emotional stress.

By the time I get home I definitely feel more calmed and focused on the next task.

Are You Taking The Time To Meditate/Pray etc??

Whatever your “thing” is, I firmly believe in mental exercise. This usually helps me with better decision making as well as sticking to my game plan, especially in high times of stress.

Do You Have A Consistent Gameplay Session? (Trading Plan)

By this I mean when its time to do your scans are you just picking high of day plays and that’s it?

This will usually cause inconsistency because there really is no in depth plan there.

A better plan would be to have a handful of stocks you selected either last night or pre-market, and decide first why these stocks are on your watchlist.

After you, you draw your trendlines. This makes it easier during the trade to see Support and Resistance instead of entering the trade and then trying to find support and resistance.

Then select which stocks have the best opportunity.

Now check if there is any news that will influencing the stock or will influence it later.

Set your profit target,entry point,and stop loss. Doing all of this will take tremendous stress off trading because you are almost making each decision mechanically.

Imagine trying to make trades on a whim, with barely any plan. You would basically be trading off of pure emotion which is the last thing you want to do.

When you ask yourself the 5 W’S (Who, What, When,Where, and Why), I want you to be able to answer each one of them with a distinctive answer for each W.

For example…

Who is trading them (think of volume, relative volume, float and short interest)

What stocks do you plan to trade? (Off of your watchlist or scans)

When do you plan to trade them (What time frame do you want to take action/entry price/exit price)

Where (At what price levels/where is support and resistance)

Why do you want to trade this stock (Why are you entering? Gap fill? Support and resistance play? Break out? News? )

The more you can answer these questions when asked of you as well as making your daily habits more consistent, the more you consistency trading wise should increase.

Have a wonderful day traders!

 

The Best Technique Professional Traders Use To Enter Orders

bigstock-152276516-678x381

I have no intentions of click baiting any body ever, so believe me when I tell you, this tip literally changed the way I traded for the better.

Most of the experienced traders use this tactic but as beginners its never brought up for some reason.

As a beginner trader or even intermediate trader we often get caught up with what broker to use, how much commissions are going to cost, which setups will be the best etc.

And those are all important factors to go over. But the step I’m going to talk about shocked me because it made so much sense but no a lot of people i followed would really use it.

To cut to the chase….Its Scaling In To Your Position.

Now some will say “OK, I’ve heard of that before, this isn’t new”. I am not here to claim that its new, only that its unspoken about.

Lets talk about why scaling in to your position is so important.

When we are ready to take a position we often think of entering how whole position at the exact price that we want. For example…

“I want to buy 2,000 Shares at $5.00 dollars  for a whole dollar break.” That’s all good and dandy, but the problem with this approach is that the setups that we are use to are not always exact.

So that price could actually go to $5.25 and then go back in your favor. However, most people would usually get shaken out well before it gets to $5.25, since there all in with there size.

I am going to give an example of a trade I did this week where I got stopped out because I couldn’t tolerate the draw down.

2018-08-31

As you can see above, I entered at $13.68 with half of my size because I got F.O.M.O (FEAR.OF.MISSING.OUT.) and wasn’t prepared.

I quickly shoved the order in, and because of that, when the price went against me, I had a big draw down for my position.

So I exited, just for it to top out $.20 cents above my exit and swing back down in my favor.

To make matters worse, it hits my profit target. This would have been a $500 dollar profit minimum, and a $1,000+ dollar profit if I had got my all my size in with a SOLID ENTRY.

Now, how should I have gone about this?

First things first, I should never have dumped half my size into the stock, especially at a price point that wasn’t close to the best price.

I should have started with 100-200 shares max. This would have allowed me to be involved in the trade but not sacrificing so much. I would be able to let the trade play out.

If I was only 200 Shares in and the stock hit 14.08 (where I originally stopped out), I would have been down -$80 dollars instead of -$200 dollars. This would allow me to continue to add as long as the stock was still showing signs of a reversal.

Second thing I would have done differently was start scaling in short on the pops, instead if on that dip. That’s was F.O.M.O (Fear.Of.Missing.Out) will do. All of your rules tend to get thrown out the window.

Remember, Buying dips or shorting pops will add to your profit and reduce your loses. See the post I had on that.

https://traderjournaljourney.wordpress.com/2018/08/30/1-tip-that-will-amplify-your-trading-profits/

Being able to scale in will give you a much better entry most of the time because you have multiple chances to get a better price. That’s the key.

You throw your starter order out, maybe its a good entry, maybe its not. It doesn’t matter, you have 3-5 more tries to get a better price average. That’s the beauty of it.

And because you have multiple tries, you will be less stressed and less tense about entering the position.

This is just the beginning of me speaking about scaling in, that’s how passionate I am about it.

Take care for now, and I hope this helped!

If you have any questions, feel free to leave a question in the comments, or email me.

Have A wonderful day!!

 

 

 

 

5 Ways To Tell You Are Using Too Much Size When Trading

tumblr_inline_nifr1kU03r1qjctb7

 

Either you just started trading or you have been at it for awhile and you are feeling confident. You have been consistent and you feel like its time to increase your total size count. Going from 100-300 shares to 1,000 -2,000 shares or something along those lines, right?

Because why not? If you can make $200 consistently then why can’t you start making $2,000 right away?

What are we waiting for?

This has come across my mind before, and probably any other trader who has had some success with smaller size and wanted to start making big money.

Unfortunately there are flaws with this type of thinking.  So much goes into increasing size, especially if its by a drastic measure.

Here are 5 ways you can see that you are using too much size

  1. If You Are Uncomfortable Hitting the BUY/SELL Button.                                       

This was a big tell for me in my trading. Its not just about being nervous about hitting the button, it was when i saw the perfect entry that i wanted, or perfect set up, and hesitated because I was afraid of putting on all that size.

But when I used 100-200 shares, there was no hesitation at all. This really because I new that i could actually tolerate the loss from a 100-200 share loss, if I were to lose. This leads directly to point number #2.

If You Cant Allow Your Stop Loss to Hit/ Adjusting Stop Loss.                             

This can be another indicator that you have on too much size. Having your stop loss hit is part of trading. No matter what, you are going to take losses over time.

If you enter trades with a predetermined risk set  and move the stop loss lower to avoid taking the loss, it often means you can’t stomach the loss because of the size you are using. Leading to point number #3.

If you are not Truly Accepting The Risk You Set.

Don’t lie to yourself and say that “you accept the risk” if you are constantly moving your loss and holding losses farther than anticipated. The reason us as traders set risk is so that we keep our losses small as well as keeps us protected.

Anytime you set your risk for a trade, YOU NEED TO TRULY BE ABLE TO RISK IT.

Which means, if you truly can’t stomach a $200 loss, you need to be using less size so that you have more room to less the stock play out. Using less size will also take a less emotional toll on you when you lose.

When you lose $20 on a trade, can you sleep at night? Most likely. Because you can live with a $20 loss and go into the next trade unfazed. That’s TRULY accepting risk.

If the amount you risk is NOT proportionate to your account size.                 

These are related to the other points , but not he same. If you see a quality trade, quality setup, perfect entry. It can be tempting to “go all in”.

However, even some of the best trading setup ups fail. No strategy is 100% guaranteed.  So what happens when your $10,000 account is now down $3,000 because you went all in.

And when it was time to get out, you only then realize how much of a loss to your account 30% is. So most people hold longer, and longer , and longer. -40%, -60% etc. All that work gone just like that.

If the loss if not proportionate to your account, think twice before sizing up so much.

You want to take the trade off as soon as the trade starts going in your favor.

This one is my favorite believe it or not :). Its my favorite because it shows me how backwards we think in the moment of having big relative size in a trade.

We hold and hold the loss lower and lower because we are afraid to realize the loss, but when we have a lot of size on and the trade works out on our favor, our emotions cause us to exit early.

The complete opposite of what we were suppose to be doing; Keeping losses small, Letting winners run.

We do this because as soon as we put on a trade that we feel is a lot of size, we are already fearful. So as soon as its starts to work out we think “thank God, let me get out before this turns against me”.

Again, ask yourself, “Would I be doing this i had 200 shares in the trade instead of 2,000 shares??” Answer, Most likely not.

4 Important Reasons for Trading Through Different Market Conditions

Sc652_0064

We often hear people ask traders, ” Are you a bullish or bearish trader?”. Almost everyone has a specific favorite between the two choices.

Some of us prefer the Bullish side (Long/Buy) because we like the idea of simply buying shares when we are ready to make the decision instead of worrying about “Is there any shares to short left?”.

Some of us prefer the Bearish(Short/Sell) side because we love the total collapse of a stock once it starts to fail. What ever the choice is, it is still a good idea to at least understand whats going on, on the other side.

What many traders don’t realize is that us as traders often will mistake our “preference” for the Short or Long side, with trading in a Bullish or Bearish market.

You start trading one day and after a while you convince your self that you enjoy buying much more than selling when in reality, the market conditions at the time are just better suitable for Long biased traders because the bullish market will give you more opportunities to buy and be correct.

It is important to understand your reasoning for choosing your biased, as well as trying to be a more well rounded trader.

Here are 4 Reasons why I believe it is crucial for all traders to trade through different market conditions.

1) You Truly Don’t Know How To Trade Until You have Experienced Different Market Conditions.                                                                                                                   

 I believe this wholeheartedly. Its very easy to pursued yourself into believe you are a top trader because you can make great profits in a market that is trending in your favor.

However, what is the common trend that happens to the type of trader who thinks like this? When the market turns against them, they don’t keep their money. They more times than not end up blowing a big portion of it.

Why? Because they think they can trade the same way through any market trend.  The truth is the best traders know when to step on the brakes, and when to turn on the gas.

This leads to point number #2.

2) You Will Understand The Right Time To Be More Aggressive, and The Right Time To Be Conservative With Trading.

This is one trait of great traders that many people seem to overlook. This is how the great traders you look up to are able to profit a lot for a certain time, and then suffer much smaller losses over time.

They realize that you can be 100% aggressive at all times, because the market changes. Its no different than Steph Curry or most great basketball player. They can often tell within minutes of playing that today is going to be “one of those days”.

A day where he can shoot more than usual, or attempt more outlandish shots because the first 5 shots he took were all perfect. So they may average 25 points per game but in this game they think ” I am going to go for 60 points” because they know this day, “my shooting looks better than average/ my shooting is far into my favor”.

This is no different than the stock market being in your favor. If you are a long biased trader and the markets are bullish, plus you are seeing stocks do ridiculous moves, 50%, 100%, 200% gains, this should be the moment you say, ” its time to be more aggressive” and size in a bit more than usual.

When the market is not in your favor, and only 1 or 2 stocks are barely making 25% moves, then this should be an indication to use less size than usual, because the likelihood of you losing on bullish opportunistic is higher.

3) In Can Make You A More Profitable Trader/ More Well Rounded Trader             

Well this should be obvious to most, but in case its not , its alright. Explanation incoming. If you can learn to make money in both a Bullish market , but ALSO a bearish market, it will instantly make you a more profitable trader, instead of being the trader that is only great in a Bull market but absent in a Bear market.

Another basketball analogy coming. The top NBA players are usually never one sided players. They’re almost never strictly offense or strictly defense.

Obviously there is your occasional one, but for the most part the top players are great at either offense or defense, but still really good at defense. Michael Jordan, Kobe Bryant, Lebron James, Shaquille O’neal, Wilt Chamberlain etc.

On top of that, because you they are not only top players, and that can play both sides (Offense and Defense) they are usually the players that get paid the most dollars (Lebron making close $80 Million in 2018).

Why?? Being well rounded means that you are present in the market, the  same way a multi-purpose player gets more playing minutes. More presence in the market means more opportunity the same way more playing time often means more points and other stats.

4) People Will Look To You For Advice More Often Then Your Competition. 

This is mostly for the traders who plan to open of services , blogs, YouTube channels, etc.

The more you know about different market conditions and the more you can prove that within any market you can not only survive, but make great money on either end, the more people will want to buy your product, ask for your advice, or recommend you to other beginners.

I use to watch a particular trader on YouTube religiously. Until I realized that when the market turned he was basically absent, which is fine, but it made me go search for someone else who was proving they could make money in a time when the YouTube trader couldn’t.

Your business side of trading will do much better if you can show customers that you are capable of showing them both sides of the game. Bullish and Bearish. Offense and Defense.