The First Day of My New Trading Business

[Xiao si 10]

G'day folks....after 6 years of trading part time and recently resigning my full time job, i have finally taken the plunge into the world of trading full time as a business.

 

The next 3 months will be spent developing my business plan, trading systems and working to test, validate, execute and implement those plans.

 

I am lucky enough to be very well capitalized after several years of savings and swing/position trading part time. I have experienced the loss of my trading account on several occasions before realizing a better degree of success. My plan involves a swing trading account as well as the newer addition of intraday index futures and equities.

 

I believe one of my advantages is my strong work ethic and love of a challenge. A positive attitude and the ability to visualize my goals will come in handy as well. Most of all i know that i can succeed at this, and i will.

 

One thing i am clearly lacking due to my location, is a good trading mentor that i can correspond with frequently and emulate. Feel free to offer!

 

I'm looking forward to getting to know the community here and hopefully i can contribute with my relatively 'light' experience.

 

Cheers,

 

 

 

Xiao Si

(Pronounced shao seh)

[MadMarketScientist 11]

Congrats! Feel free to document your journey here with us - there are many full-time traders here that can help. Best of luck and see you around.

 

MMS

[Tradewinds 12]

Seems that you are in good condition to become successful. I'd be interested to know what helped you go from loosing money, to being profitable.

[Xiao si 10]

Seems that you are in good condition to become successful. I'd be interested to know what helped you go from loosing money, to being profitable.

 

The biggest single thing that i changed was to plan my trades better and not just trade anything....i got out of intraday FX because it was killing me and i could not find a system to trade it successfully intraday. The time frame was not right for me. Given my time constraints i got into swing/position trading, which was a better time frame for me and it allowed me to better plan the trades and be selective about taking trades that met my criteria.

 

The other big thing i've learned is to be patient, the markets and thier opportunties will be there another day. Wait for the setups to come to you, don't try and make something out of nothing.

 

Thanks for asking, good question.

 

Cheers,

 

 

Xiao Si

[MightyMouse 12]

Good Luck.

 

There is a lot of good information on this site.

 

Given that you are advertising that you have plenty of capital, there are a lot of experienced mentors here. Careful, since they will end up with the capital and you end up with the experience.

[Xiao si 10]

Careful, since they will end up with the capital and you end up with the experience.

 

Sounds like a Thai girl i knew once........

 

Xiao Si

[cash123 10]

Sounds like a Thai girl i knew once........

 

Xiao Si

 

You too :haha:

 

Good Luck

[TheNegotiator 13]

H Xiao Si,

 

Welcome to TL and good luck on your journey. If you have managed to do well with swing trading so far, are you planning to at least initially use this as the core of your trading methodology? I would say really all the things you mention like being patient and planning your trades well are really just the same in day trading. Maybe you just need to be more alert and flexible enough to move to plan B quickly in shorter timeframes. It really depends on how you trade though I guess.

[Marubozu 10]

Congratulations!

 

I would say that the biggest challenge you face could be as you pointed out... over trading and not being as patient.

 

I would recommend a second business or even a hobby that you can do at your desk or very close to your desk.

 

Get your self a second set of screens (if you have not already) and then you can be at your desk but not tempted to trade every opportunity that comes up.

 

Good Luck!

[MrMomentum 10]

Hi Xiao Si,

 

You indicated that you have decided to trade full time. (All the best with this!)

 

You also mentioned that you use a swing/position trading approach.

 

I was just wondering if this type of trading strategy requires you to trade full time. Do you feel it may fit better with part time trading?

 

Have you thought about how many trades you will be doing per week? Can your strategy be managed with electronic orders?

 

One of the problems with full time trading is boredom and loneliness.

 

Have you worked out a way to overcome boredom and loneliness when full time trading?

 

All the best,

[optiontimer 10]

I think you can find a whole list of available "mentors" in the vendors vendors vendors thread. Though from the sound of it, a mentor at this time is likely the last thing you need as he would probably inflict more harm than good. If I may offer a bit of advice it would be this:

 

1) carefully identify those aspects of your trading that have supported your success to this point.

 

2) don't let yourself or anyone else talk you into changing any of those supportive aspects.

 

Good luck!

 

-optiontimer

[nakachalet 10]

G'day folks....after 6 years of trading part time and recently resigning my full time job, i have finally taken the plunge into the world of trading full time as a business.

 

The next 3 months will be spent developing my business plan, trading systems and working to test, validate, execute and implement those plans.

 

I am lucky enough to be very well capitalized after several years of savings and swing/position trading part time. I have experienced the loss of my trading account on several occasions before realizing a better degree of success. My plan involves a swing trading account as well as the newer addition of intraday index futures and equities.

 

I believe one of my advantages is my strong work ethic and love of a challenge. A positive attitude and the ability to visualize my goals will come in handy as well. Most of all i know that i can succeed at this, and i will.

 

One thing i am clearly lacking due to my location, is a good trading mentor that i can correspond with frequently and emulate. Feel free to offer!

 

I'm looking forward to getting to know the community here and hopefully i can contribute with my relatively 'light' experience.

 

Cheers,

 

Xiao Si

(Pronounced shao seh)

 

xiao si.... <little joy....?>

 

i couldn't believe what you decided to do.... really?

 

.... :haha: The next 3 months will be spent developing my business plan, trading systems and working to test, validate, execute and implement those plans....

 

well.... most traders in other parts of the globe would surely not going full time on your premise.... for sure....!

 

to go on full time, a trade ought to have already solidly tested out trading plans, well researched and proven personal stats, well proven individual strategies and specific reward/risk ratio money management according to one's own willingness to throw away whatever....

 

on the other hand, i do wish you well though.... regardless whether you go on live and full time now or later.... ok?

 

best wishes and we are rooting for you and your effort.... may your returns be multiplied many folds.... :missy:

[nakachalet 10]

Sounds like a Thai girl i knew once........

 

Xiao Si

 

little joy, xiao si....

 

i think you'd better stick to testing out your trading plans before anything else....

 

it is disgusting to give away your yuans without even a good struggle....

 

thai girl? chinese girl? indian girl? american girl? french girl? whatever....

 

i am afraid, we won't have enough to make them happy for too long.... :rofl: :helloooo:

 

sticking to your trading first.... everything else that are important to your life will materialize eventually.... this i can guarantee all of you....

[nakachalet 10]

Congratulations!

 

I would say that the biggest challenge you face could be as you pointed out... over trading and not being as patient.

 

I would recommend a second business or even a hobby that you can do at your desk or very close to your desk.

 

Get your self a second set of screens (if you have not already) and then you can be at your desk but not tempted to trade every opportunity that comes up.

 

Good Luck!

 

i am just very curious just how do you explain over trading.... or what would you consider as over trading....

 

....I would say that the biggest challenge you face could be as you pointed out... over trading and not being as patient....

 

just when does a trader over trade...., pls?

 

would you consider trading 30 times overtrading, excessive trading, ruinous trading or crazy trading for that matter....?

 

before you take on this issue, pls do look at the attached and see.... if you agree that it is way too excessive and obnoxiously overtrading.... for any joe and jane traders?

 

AND ANOTHER POINT.... in mho, it is not a good idea to have anything other than your trading monitor in front of you when you are trading live and for a living....

 

anything else will quickly become a distractor and anything else will also drain your concentration and liquid resources away from you....

 

oh, well.... this is just a one man opinion, ok? Marubozu?

[nakachalet 10]

Hi Xiao Si,

 

You indicated that you have decided to trade full time. (All the best with this!)

 

You also mentioned that you use a swing/position trading approach.

 

I was just wondering if this type of trading strategy requires you to trade full time. Do you feel it may fit better with part time trading?

 

Have you thought about how many trades you will be doing per week? Can your strategy be managed with electronic orders?

 

One of the problems with full time trading is boredom and loneliness.

 

Have you worked out a way to overcome boredom and loneliness when full time trading?

 

All the best,

 

boredom....?

 

boredom and loneliness....?

 

hummm.... what do they mean.... in the life of a live trader.... pls? :missy:

[nakachalet 10]

I think you can find a whole list of available "mentors" in the vendors vendors vendors thread. Though from the sound of it, a mentor at this time is likely the last thing you need as he would probably inflict more harm than good. If I may offer a bit of advice it would be this:

 

1) carefully identify those aspects of your trading that have supported your success to this point.

 

2) don't let yourself or anyone else talk you into changing any of those supportive aspects.

 

Good luck!

 

-optiontimer

 

best advice so far....

 

keep it coming pls....

 

may i ask, which products do you trade, pls?

 

like your sound and down to earth advice.... :missy:

[Marubozu 10]

Hi Nakachalet,

 

Your right to pick me up on those things. Ultimately trading is one mans opinion vs another and that is what I love about it. I also very much enjoy the banter and differences in opinion that come with it.

 

I could agree that having another hobby or business may distract you. For me trading and running multiple businesses is about creating financial freedom as apposed to be the worlds best trader. My aim is to make money from home and I diversify by doing many different things.

 

Over trading in my opinion is not the amount of trades you place. It's more to do with ones ability to successfully place and monitor any number of positions. If you are able to place 30 trades a day and produce 30 winners, 5 days in a row and your placing 150 successful trades a week then that is not over trading, that is EXCELLENT TRADING! :-)

 

I think coming from swing trading to day trading you probably will find your self trying many different new strategies and jumping from chart to chart and your overall performance may decline, your stress levels may increase and your ability to critically think can become impaired, when this happens I consider that to be over trading.

 

Let me give you an example, I guess this is the reason why I responded as I did.

 

A friend of mine who is a successful swing trader decided he needed to spend two weeks day trading to make some quick money... He booked time off his busy schedule and then spent 2 weeks looking for opportunities to make money. As you probably already guessed this plan did not go well.. And this was genuinely a friend and not myself, altho I have witnessed similar behaviour in myself.

 

So week one he seemed quieter than normal and week two he seemed a little devastated. I guessed it was his trading activities, so I mentioned it to him.

 

Two things came out of our conversation.

 

1) He decided to buy the latest and greatest day trading strategy from some guru trader (I wont mention any names). Excited with what he had recently been taught he decided it was time to day trade it. So he was trying to put brand new methods to the test with no practice or back testing in an environment and time frame which he was not used too.

 

2) This is pretty much the end of conversation we had:

 

==============

 

Me: "What was your daily goal in profit/pips/points etc?"

 

Trader X: "I don't limit myself, I don't have a daily limit... I just trade."

 

Me: "Basically you have been placing trade, after trade, after trade, until you have one or two bad trades that completely wipe your profits and then you stop."

 

Trader X: "erm... well.... not exactly.."

 

Me: "Not exactly?"

 

Trader X: "Well yes, pretty much... I have had some good days though...."

 

==============

 

I consider that to be over trading. Placing trades relentlessly with no real plan, method or goal.

 

For me over trading is not about any number of trades but more about your comfort zone and about one's own ability to monitor, reflect and maintain a level of success across multiple trades and techniques in a smaller time frame where you have less time to action your methods and the chances of repeated wins or losses can drastically effect your mind set and cause you to act in ways which can actually be damaging to your account.

 

If your system requires you to be placing 4-5 trades per day that can be several hours between trades and it is easy to become bored or desperate to place trades, seeing opportunities that are not really there and receiving losses for that. If your system requires you to scalp the market 30-60 times a day then so be it as long as you feel comfortable.

 

You hobby can be trading related, you could read the entire Financial Times each day. I am sure it would take about 8 hours to read that thing from front to back and your knowledge about companies and markets would grow exponentially.

 

I would also recommend a daily goal, whether its £500 or £5000 and once you hit your goal stop placing new trades and simply monitor your existing positions and then get outside for some fresh air and enjoy LIFE! In an ideal world you will be finished by 10am every day ;-)

 

Life is not about Trading, Trading is about LIFE!

[Xiao si 10]

H Xiao Si,

 

Welcome to TL and good luck on your journey. If you have managed to do well with swing trading so far, are you planning to at least initially use this as the core of your trading methodology? I would say really all the things you mention like being patient and planning your trades well are really just the same in day trading. Maybe you just need to be more alert and flexible enough to move to plan B quickly in shorter timeframes. It really depends on how you trade though I guess.

 

What i would really like (my goal) is to be in a position to take advantage of index futures trading (Asian...K200, MHI, SPI) when there is some movement, so either on the open or during periods of global volatility. Then also if i can become reasonably good at intra-day on US stocks (much more intense in my view) with movement on and around the open then i feel i would have a well rounded plan that would present me with profitable setups in most market conditions. All of time i can still maintain my swing trading account as well as a longer term account that i trade. The latter two don't require the time as i outsource the trade picks so its more of a trade management issue.

 

Right now I'm learning to read the tape and i can tell you it is a very rewarding learning experience with only a little amount of screen time yielding some interesting and remarkable observations that repeat quite frequently. I'm also taking the tape reading course by the guys at SMB Capital.

 

Still putting my business plan together as well. It been a week of very long days, up at 7 am and then off to bed after midnight, trying to get as much screen time and work done on my plans and systems. A real eye cooker.:missy:

 

Cheers,

 

 

XS

[Xiao si 10]

Congratulations!

 

I would say that the biggest challenge you face could be as you pointed out... over trading and not being as patient.

 

I would recommend a second business or even a hobby that you can do at your desk or very close to your desk.

 

Get your self a second set of screens (if you have not already) and then you can be at your desk but not tempted to trade every opportunity that comes up.

 

Good Luck!

 

Yes, all of these are great points....my fiancee keeps me busy organizing our wedding and I've got Chinese to learn as well.

 

I have used multiple screens for 3 years now, I'm down to three from 4....no room in my new study for the 4th.

 

Here's an old photo of my setup. Much neater now in our new place in Suzhou, bigger desk and no cables hanging around.

 

Cheers,

 

 

XS

[Xiao si 10]

Hi Xiao Si,

 

You indicated that you have decided to trade full time. (All the best with this!)

 

You also mentioned that you use a swing/position trading approach.

 

I was just wondering if this type of trading strategy requires you to trade full time. Do you feel it may fit better with part time trading?

 

Have you thought about how many trades you will be doing per week? Can your strategy be managed with electronic orders?

 

One of the problems with full time trading is boredom and loneliness.

 

Have you worked out a way to overcome boredom and loneliness when full time trading?

 

All the best,

 

Actually swing trading was where i cut my teeth, intraday is where i want to be until my eyes wear out.....

 

Agree on the boredom....

 

Cheers,

 

 

XS

[Xiao si 10]

xiao si.... <little joy....?>

 

i couldn't believe what you decided to do.... really?

 

.... :haha: The next 3 months will be spent developing my business plan, trading systems and working to test, validate, execute and implement those plans....

 

well.... most traders in other parts of the globe would surely not going full time on your premise.... for sure....!

 

to go on full time, a trade ought to have already solidly tested out trading plans, well researched and proven personal stats, well proven individual strategies and specific reward/risk ratio money management according to one's own willingness to throw away whatever....

 

on the other hand, i do wish you well though.... regardless whether you go on live and full time now or later.... ok?

 

best wishes and we are rooting for you and your effort.... may your returns be multiplied many folds.... :missy:

 

Xiao Si is the nickname that my Chinese friends gave me based on my real first name...its means little...and then my name.

 

I'm lucky that in my current situation we can afford for me to take the time and confidently develop my plans and strategies. My previous career is still in demand here in Asia so i can always go back if i ever needed to but i am sure i'll be fine.

 

Cheers,

 

 

XS

[Xiao si 10]

Hi Nakachalet,

 

Your right to pick me up on those things. Ultimately trading is one mans opinion vs another and that is what I love about it. I also very much enjoy the banter and differences in opinion that come with it.

 

I could agree that having another hobby or business may distract you. For me trading and running multiple businesses is about creating financial freedom as apposed to be the worlds best trader. My aim is to make money from home and I diversify by doing many different things.

 

Over trading in my opinion is not the amount of trades you place. It's more to do with ones ability to successfully place and monitor any number of positions. If you are able to place 30 trades a day and produce 30 winners, 5 days in a row and your placing 150 successful trades a week then that is not over trading, that is EXCELLENT TRADING! :-)

 

I think coming from swing trading to day trading you probably will find your self trying many different new strategies and jumping from chart to chart and your overall performance may decline, your stress levels may increase and your ability to critically think can become impaired, when this happens I consider that to be over trading.

 

Let me give you an example, I guess this is the reason why I responded as I did.

 

A friend of mine who is a successful swing trader decided he needed to spend two weeks day trading to make some quick money... He booked time off his busy schedule and then spent 2 weeks looking for opportunities to make money. As you probably already guessed this plan did not go well.. And this was genuinely a friend and not myself, altho I have witnessed similar behaviour in myself.

 

So week one he seemed quieter than normal and week two he seemed a little devastated. I guessed it was his trading activities, so I mentioned it to him.

 

Two things came out of our conversation.

 

1) He decided to buy the latest and greatest day trading strategy from some guru trader (I wont mention any names). Excited with what he had recently been taught he decided it was time to day trade it. So he was trying to put brand new methods to the test with no practice or back testing in an environment and time frame which he was not used too.

 

2) This is pretty much the end of conversation we had:

 

==============

 

Me: "What was your daily goal in profit/pips/points etc?"

 

Trader X: "I don't limit myself, I don't have a daily limit... I just trade."

 

Me: "Basically you have been placing trade, after trade, after trade, until you have one or two bad trades that completely wipe your profits and then you stop."

 

Trader X: "erm... well.... not exactly.."

 

Me: "Not exactly?"

 

Trader X: "Well yes, pretty much... I have had some good days though...."

 

==============

 

I consider that to be over trading. Placing trades relentlessly with no real plan, method or goal.

 

For me over trading is not about any number of trades but more about your comfort zone and about one's own ability to monitor, reflect and maintain a level of success across multiple trades and techniques in a smaller time frame where you have less time to action your methods and the chances of repeated wins or losses can drastically effect your mind set and cause you to act in ways which can actually be damaging to your account.

 

If your system requires you to be placing 4-5 trades per day that can be several hours between trades and it is easy to become bored or desperate to place trades, seeing opportunities that are not really there and receiving losses for that. If your system requires you to scalp the market 30-60 times a day then so be it as long as you feel comfortable.

 

You hobby can be trading related, you could read the entire Financial Times each day. I am sure it would take about 8 hours to read that thing from front to back and your knowledge about companies and markets would grow exponentially.

 

I would also recommend a daily goal, whether its £500 or £5000 and once you hit your goal stop placing new trades and simply monitor your existing positions and then get outside for some fresh air and enjoy LIFE! In an ideal world you will be finished by 10am every day ;-)

 

Life is not about Trading, Trading is about LIFE!

 

Lots of great points here, and i can relate to trying intra-day trading after swing trading thinking it would generate some cash...dropped 5k in a week and stopped trading quick smart!

 

My systems will be based on repeating patterns i see on the time and sales in the futs, and on time and sales and level II for US equities. Already on the K200 i can see repeating setups at key numbers, i don't think finding setups will be an issue, but pulling the trigger where i can get the most bang for the buck will be! Overtrading will be where theres too much choppy action and i just can't catch a move because i'm trading something that just is not there, be patient and wait for the setups.

 

By the way, if you haven't looked at the K200 then its worth a look, lots of volume and movement.

 

Cheers,

 

 

XS

[Xiao si 10]

Today's has been a burner of a day on the K200, missed the open but after lunch the Koreans really got off to selling, after some news about Samsung hit the market it tanked. Lots of offers hit the tape and bids stepped up at key levels giving one lots of time to cover. Offers again outweighed the Bids and the selling continued. I find this much easier than watching US stocks intra-day.

 

Cheers,

 

 

XS

[Xiao si 10]

My first day on the IB SIM trading the SPI/MHI/DAX with Time and Sales, the Book Trader and a small intraday chart:

 

Trades 25

Losing trades 15 for -111 points

Winning trades 10 for 124 points

Net 13 points

 

Goal is 60-70% win rate with an R:R of 1:5 (got a ways to go!):doh:

 

 

Several key things learned about the order flow on these markets today. Once you start to see the order flow you can tell when to hit the offer or bid and you can almost 'feel' the sense of selling (or buying) pressure, or lack of it. You need some good trending markets and some volume to learn this. I can see how the likes of Tudor Jones, Livermore etc., made and lost a fortune by the tape.

 

Anyway, I'm up for another two months of this before i can go live, so this is just the start.

 

With the end of day analysis you can start and look for areas to improve upon. For example i was way too slow getting out of losing trades. Some of this was platform setup, now fixed and some of the late exits were not sticking to my committed stop, this is a particular worry that i need to work on.:crap:

 

The experience will help me pick the right setups, and discipline will help me get out of losing positions earlier.

 

Cheers,

 

 

XS

Edited September 1, 2011 by Xiao si

[jackb 10]

You mentioned you're only beginning to learn how to trade intraday and that you've just begun studying tape reading. As you are undoubtedly probably figuring out, reading the tape of any one particular index is as complex and unique as it is for any one stock. Most choose to focus on one or two at a time and usually that entails a considerable amount of concentrated effort over a very protracted period (and whatever period you think that is, at a minimum triple it to get a better understanding of the task at hand).

 

It appears you've got a full plate of indices you're wanting to chase after. Is that your intent? Given your location, it obviously makes sense to be looking at Asia products. But then I saw the DAX listed in your screen shot. So now you're on to Europe. And I suspect you want a piece of US action, too? When I hear that, the term "work ethic" doesn't come to mind. Care to take a guess what does?