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Khaosphere

From Poker to Daytrading

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Hello,

 

This is my first post since I am a perfect newbie in the world of trading. I have been a poker player for the past 5 years and I will begin to swing trade and day trade next week. I am Canadian and I live in Montreal. I will mainly trade on the Toronto exchange and NY.

 

I have been studying this idea for quite a while now and I decided to try it for real. I read 4 interesting books about trading (reminiscences of a stock operator, the visual investor,trading for a living, secrets for profiting in a bull and a bear market), opened an account on a discount broker website, etc...

 

The most fascinating thing I have noticed so far are the huge similarities betwen both activities:

 

- the rake in poker is like the commissions in trading

- the psychology is quite the same

- what someone wins is what someone loses (minus the commissions)

- tilting can happen both in poker and in trading

- in both activities, emotions must remain calm in order to avoid a bigger mistake later

- there are huge swings in both activities

- new techniques (or playing style) are tested in a daily basis

etc,etc...

 

I'll let you know maybe every week how things develop but I found your forum very interesting and this is where I found the most information and well classified!

 

:)

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Hello,This is my first post since I am a perfect newbie in the world of trading. I have been a poker player for the past 5 years and I will begin to swing trade and day trade next week. I am Canadian and I live in Montreal. I will mainly trade on the Toronto exchange and NY.I have been studying this idea for quite a while now and I decided to try it for real. I read 4 interesting books about trading (reminiscences of a stock operator, the visual investor,trading for a living, secrets for profiting in a bull and a bear market), opened an account on a discount broker website, etc...The most fascinating thing I have noticed so far are the huge similarities betwen both activities:

 

- the rake in poker is like the commissions in trading

- the psychology is quite the same

- what someone wins is what someone loses (minus the commissions)

- tilting can happen both in poker and in trading

- in both activities, emotions must remain calm in order to avoid a bigger mistake later

- there are huge swings in both activities

- new techniques (or playing style) are tested in a daily basis

etc,etc...

I'll let you know maybe every week how things develop but I found your forum very interesting and this is where I found the most information and well classified!

:)

 

 

 

Yes, indeed - welcome to TL.

 

I have played a few hands myself.

 

There are certain dynamics at work in the markets that make it much better than poker:

 

The markets are like a heads up game where your opponent can never bet, never fold, never raise and must call your every bet. The trader can bet or not bet whenever he wants, fold whenever he wants and even raise his own bet whenever he wants.

 

There is no ante, only a very small rake and only when you decide to play a hand.

 

While it is indeed the "Big Game," you can sit in for any stakes you want.

 

And maybe best of all, the game doesn't get any tougher as the stakes rise. If you can beat ES for a 10 lot, you can beat it for a 100 lot.

 

As in Poker - Information = Equity

 

At the poker table everybody has access to the same raw data. All players can see the community cards, the pot size, every other player's stack size and the actions and reactions of all the other players. The players who can best calculate drawing odds, pot odds, implied odds, EV, an anticipation of the other players' actions and reactions and furhter process that raw data into action decision (bet, check, raise, fold, check-raise) support information is the favorite to see an increase in equity.

 

In the markets trade decision support information is derrived from ticks. Everyone has access to ticks and the trader who can best processe those ticks into higher quality trade decision support information is the trader most likely to see an increase in equity.

 

cheers

 

UB

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Hello,

 

This is my first post since I am a perfect newbie in the world of trading. I have been a poker player for the past 5 years and I will begin to swing trade and day trade next week. I am Canadian and I live in Montreal. I will mainly trade on the Toronto exchange and NY.

 

I have been studying this idea for quite a while now and I decided to try it for real. I read 4 interesting books about trading (reminiscences of a stock operator, the visual investor,trading for a living, secrets for profiting in a bull and a bear market), opened an account on a discount broker website, etc...

 

The most fascinating thing I have noticed so far are the huge similarities betwen both activities:

 

- the rake in poker is like the commissions in trading

- the psychology is quite the same

- what someone wins is what someone loses (minus the commissions)

- tilting can happen both in poker and in trading

- in both activities, emotions must remain calm in order to avoid a bigger mistake later

- there are huge swings in both activities

- new techniques (or playing style) are tested in a daily basis

etc,etc...

 

I'll let you know maybe every week how things develop but I found your forum very interesting and this is where I found the most information and well classified!

 

:)

 

Khaosphere, good luck with your Trading. I think you will have a real advantage having played poker for 5 years. I will be really interested to hear how you get on. I recently read about a pro poker player called Andrew Omara who recently started trading forex and his poker skills were a great help.

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Started trading today.

 

- Opened my trading account with 10k. (plan on adding 5k this week)

 

- 8 trades completed and closed.

 

- 4 trades profitable and 4 trades where I loss money.

 

- the trades were 7 long and 1 short.

 

- I managed a $56 net profit overall (after Commissions and ECN/SEC fees).

 

- 3 trades automatically filled due to a VTSO (virtual trailing stop order) placed maybe too close to the trading range.

 

Learning a lot, fascinated! :)

 

most of the time it's analysis and wait, few decisions to take very fast. love it!

 

Khaosphere.

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For now I try my hands on stocks, mainly high volume stocks with very liquid market.

 

I traded 8 different stocks today, the company are not really important since I use technical analysis intraday strategy.

 

Since I'm canadian, I started with stock on the TSX (Toronto Stock Exchange) but NYSE / NASDAQ will be added this week also.

 

I plan on trading also futures / options / gold / currencies in the future.

 

:)

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3rd day of trading completed:

 

- 13 trades completed and closed (26 transactions).

 

- 7 trades profitable and 6 trades where I loss money.

 

- the trades were 11 long and 2 short.

 

- I managed a $216 net profit overall (after Commissions and ECN/SEC fees).

 

- now able to adjust the VTSO not too close to avoid automatic fills when there is a small change of direction.

 

Still learning a lot, still fascinated!

 

most of the time it's analysis and wait, few decisions to take very fast. love it!

 

Khaosphere.

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Khaosphere thats a good start. I look forward to reading more of your posts. Got to say this is a great website for traders. I am looking forward to reading the price and volume threads. Khaosphere I really want to improve my online poker can you recommend and good websites or books to read.

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We run a series of hybrid propshop/hedgefunds and only hire traders with demonstrable poker skills/understanding as per the lower left paragraph on the back cover of the book as shown below.

 

CoversSpine.jpg

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Hello all!!!

 

Yes I'm still at it and I enjoy it more than ever.

 

I have completed my 104th trade (208 transactions) yesterday. I'm still walking up the learning curve but so far so good!!!

 

59 trades were with profits - 45 were losses.

 

Overall I am losing $467 so far. Why I'm losing if almost 60% of my transactions were with profits?

 

I identified 5 major points:

 

1- I tend to keep my positions a bit too long when they are not going in the direction I predicted.

 

2- The 1000 points mini-crash last week cost me $524 (I had 3 positions when it happened and all 3 hit the stop protection in a record time and my 3 positions were sold!). Too bad I had 3 long positions instead of short...

 

3- The transactions, ECN and SEC fees are astronomical. I paid more than $1,800 in fees so far.

 

4- I sell my winning positions too fast and I don't wait until the trend changes (yeah, at first I was excited like a baby to see 3-4 positions flashing in green, now I get used to it lol).

 

5- I transgressed the daytraders law that stipulates that we must NEVER keep a stock overnight. I did it 3 times and lost on the 3 positions I had. I thought that I would save the commission by keeping the stock overnight... it did cost me more than the commissions!!!

 

So this is it so far. I am learning the hard way in a very volatile market but I like it that way.

 

On the other hand, I made great moves and out of a $15,000 starting capital I was able to do many $200+ net profit transactions within less than 1 hour.

 

My best daytrader transaction was on NASDAQ when I went long of 1500 shares of JDSU (JDS Uniphase) at $12.15 on May 12 around 11h30 (on MACD and stochastics indicators on the NASDAQ index and the stock as well) and sold it just before 16h00 at $12.73 for a $844 net profit.

 

I can't wait for my first $1k+ profit from a single trade within the same day because I will not transgress the RULE anymore ;)

 

I'll try to find time to post more often on my 'daytrader initiation'. :)

 

I am very busy playing poker and also with my regular day job (part time thought) which is coaching weightlifting at my club in Brossard, Quebec as well as coaching the Canadian National Team since 1997. Here's my club website: http://www.clubfortius.com

 

And on poker side in 2005 I won a World Series Of Poker Series Golden Ring which was depicted in this blog:

 

PokerPages.com Poker News - Harrah's Showboat, Atlantic City WSOP Circuit Event 1

 

Okay... markets open in 1 minute, I have money to make!!!

 

Take care!!

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I have completed my 104th trade (208 transactions) yesterday.

 

3- The transactions, ECN and SEC fees are astronomical. I paid more than $1,800 in fees so far.

 

 

$1800 seems a little steep. Who's your broker?

 

.

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$1800 seems a little steep. Who's your broker?

 

.

 

That's $8.65 per transaction. If a transaction is a single contract then that's not right. IB is $2/trade. Mirus $2.20.

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Agreed with two posters above -- that does seem steep - I've seen plenty of people over time trade profitably if you could just take out their transaction costs - of course, that can't be done in total but it can many times be the difference between positive and negative on the ledger.

 

Keep us up to date on how you're doing -- interesting thread.

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I actually use Disnat (In Canada) and the price range is from $5 to $9.95 depending on the quantity and price of the stocks.

 

I checked the IB website and the trades starts from $1 (1 cent / share for canadian trades and 1/2 cent per sare for USA)

 

That seems effectively way lower than my broker!

 

Thank you for the insight, as I said in my first post I am a newbie in this field and learning the hard way!!!

 

Guess where I'm gonna call monday morning: Ib canada.

 

Thank you :)

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Blehhhhhhh...

 

Just went through the IB website and in order to open what they call a 'daytrading' account, there is a minimum of 25k needed. I have 15k lol. They say if their algorythm catches a 'regular' account which opens and closes positions daily too often (thats what I do every day), they will freeze the account for 90 days unless it has been identified as a daytrading account with the 25k min. Not good...

 

I'll call my actual broker monday and put pressure on them to give me a 'volume' rebate or some free trades every month since I make more than 200 trades a month...

 

Up until I reach 25k then I switch!!! me=wise newbie (obviously with your help guys!!!) ;)

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I believe the $25K is a regulator rule in order to allow daytrading account and 4:1 leverage. I don't remember the specifics but a few years ago it was the latest attempt to prevent something -- as if the daytraders were causing a market decline, etc., etc...you see where that got us. Anyway, I'm fairly certain that isn't IB specific but tied to the regulators they comply with.

 

However, armed with this knowledge you really should be paying far less than you are. And, I'm sure others here can weight in with other alternatives as well.

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I believe the $25K is a regulator rule in order to allow daytrading account and 4:1 leverage. I don't remember the specifics but a few years ago it was the latest attempt to prevent something -- as if the daytraders were causing a market decline, etc., etc...you see where that got us. Anyway, I'm fairly certain that isn't IB specific but tied to the regulators they comply with.

 

However, armed with this knowledge you really should be paying far less than you are. And, I'm sure others here can weight in with other alternatives as well.

 

To add to that, you would still benefit from switching brokers. From what I remember... you can make 3 day trades per 5 business day sessions when you are under $25k. That is probably how you're getting away with it now. Anyway, you can also trade forex and futures from an IB acct, so I'd advise making the switch soon.

 

Also, I can't help but wonder... did you come up with a solid strategy and test it (either sim or back-testing)? You'll probably hear it more than once on this forum about how important that is. After reading your posts, I was honestly surprised that you immediately opened up an account and started trading... day trading at that. In any case, good luck to you.

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I think a lot of new traders immediately jump to the S&P emini since it's the most popular by volume. Personally though I have found it more difficult to trade as a result of all this volume, and competition from very large players for fills at price levels. If I was recommending futures for a beginner I'd start with the Dow e-Mini which will move fairly lock step with the S&P, $5 per point, and a little easier to execute on your limit orders, or the Nasdaq e-Mini $20 per point. Just my :2c:

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I think a lot of new traders immediately jump to the S&P emini since it's the most popular by volume. Personally though I have found it more difficult to trade as a result of all this volume, and competition from very large players for fills at price levels. If I was recommending futures for a beginner I'd start with the Dow e-Mini which will move fairly lock step with the S&P, $5 per point, and a little easier to execute on your limit orders, or the Nasdaq e-Mini $20 per point. Just my :2c:

 

Well said Mad.

 

Some other reasons the S&P is tougher than some other equity futures are the cross currents that come from international hedging.

 

Because it is the most liquid of them all hedgers from around the world hedge their equity portfolios with this future. When the holder of a portfolio of DAX or FTSE stocks wants to hedge with ES he does the transaction based on prices and values on the DAX or FTSE and not on ES current prices which creates the same noise as US commercial arb trades.

 

 

cheers

 

UB

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I think a lot of new traders immediately jump to the S&P emini since it's the most popular by volume. Personally though I have found it more difficult to trade as a result of all this volume, and competition from very large players for fills at price levels. If I was recommending futures for a beginner I'd start with the Dow e-Mini which will move fairly lock step with the S&P, $5 per point, and a little easier to execute on your limit orders, or the Nasdaq e-Mini $20 per point. Just my :2c:

 

I agree 100%. New traders seem gravitated towards a contract based on volume and volume alone; however, they fail to realize they are also jumping straight into the deepest of all deep ends. There is a reason the ES has so much volume - b/c the biggest and brightest are there and ready to feast on you. In this arena, your competition not only includes other human traders but you are up against the fastest bots with the biggest pocket books.

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