newbie question

Discussion in 'Learn how to trade or invest by asking questions' started by Tom S, Jan 28, 2017.

  1. Tom S

    Tom S New Member

    hello,

    just starting to study basic day trading and will ask a question that (as of yet) I cannot find
    a good answer for. And i will admit that i'm completely and totally green in this.

    i think my focus would be on day trading only (equities) during the mornings with a starting brokerage
    acct of about 30k. I'm in the USA.

    since i'm totally green and don't know what i'm doing my obvious need is to eliminate as
    much risk during my learning process.

    i am mostly interested in momentum trading, closing out my positions at the end of each day.

    and i'm thinking of using a scanner such as the "momo" IOS app to find possible buy positions (long) in
    somewhat "real-time". (or an alternative scanner tuned for the best setups---i don't think momo is tuneable)

    anyway, let's say that there might be about 20 or so possible buy positions avail per day. (i'm seeing this in momo testing now)

    based on what i've studied so far,
    it seems like if you bought modest positions in these daily (bullish) momo picks and didn't invest more than about 2% of your trading acct combined on any given day and set ultra-tight stops (the minimum the broker would allow) and bought only after you verified in the morning that the momo stock was heading up when you bought, you could achieve profit on every position that was not stopped out. And i understand that i would be stopped out many, many times.

    and i understand that the brokerage fees on these stop outs would be a significant % of costs, but if you are investing only on bullish momentum trades and closing out all positions in the afternoon, seems like you could not help but have profitable days right out of the gate.

    and if you added some trailing stops as necessary to preserve the gains you'd could improve on this.

    am i missing something here?

    thanks!
     
  2. Acstudio

    Acstudio Well-Known Member won penny contest 44x won weekly contest 40x won weekly contest 41x simulator winner 20x

    Ye....there's a whole lot of stuff in the middle. The devil is in the details...haha. Think of it this way.....there are billions of dollars seeking out every edge of every second. You're up against people and machines doing the exact same thing and a bunch of stuff you've never heard of...you're up against people who are happy to take the other side of anything you want to do for a price. Study things like "efficient market hypothesis" or theory. Tom Sosnoff has some pretty good archived stuff on scalping in the Tastytrade.com archives. But anybody that tells you they can predict market movement is leaving out the part that there is always a counterparty that disagrees and you never know what kind of forces are at work under the surface.....ever. But hey....take a shot...keep it small....never think you know something. And if nothing else you will learn. But do watch some tastytrade....some good insight on how markets work from people that know.
     

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