Your Questions About Successful Traders Make

Carol asks…

What does it take to be an independent stock trader?

Need experienced advice:

I’ve found stock trading on stock market simulators addicting the last year and more
recently opened a Scottrade account and bought and traded a few stocks. I’m seriously thinking of being an independent stock trader and am wondering what it is you experienced traders did to get started?

Background:
I have an abiding knowledge of Austrian economics and economic history and for this reason macro trends for medium to long term trading are what appeals to me particularly as it pertains to commodities and international indexes.This makes me more of a Jim Rogers/Marc Faber type. Day trading isn’t my thing though understand that TA is useful to know.

John answers:

It is a simple matter of the natural order of things to become an investor first, before trying to become a trader.

Developing a trade plan is the first step to becoming a trader. Without it, you have no specifics, and no idea where you’re going or how you’re going to get there. This plan will force you to define terms and focus on specifics and the intricacies and strategies of trading, rather than economics or the “why” of everything, for example. You are looking for actionable concepts, not opinion.

Second, test your plan on a simulator in both up and down markets for several months. If you can make simulator profits, you may be ready to trade with real money. If not, revise the plan. Without a plan, you’re just playing another video game.

To develop a trade plan, read the book, Rules of the Trade, by David Nassar, available through your local library.

What does it take? If you’re starting with less than $5,000, the odds are against you and you will not be “independent” for quite some time. Even though you’re trying to make money, your focus should be on risk, not profits. You must develop excellent money management skills and become consistent.

Http://www.investopedia.com/articles/trading/02/110502.asp

Before you start making decisions about a system … I would suggest initially exploring these sites and authors …

Http://www.iitm.com/ (Van Tharp)

http://www.hardrightedge.com/ (Alan Farley)

http://www.elder.com/

They each have books on amazon, which you can review before purchasing.

Also: New Trading Systems And Methods by Kaufman

About.com: ‘Becoming a Day Trader’
http://daytrading.about.com/cs/education…

About.com: ‘Day Trading’
http://daytrading.about.com/#b

AskMen.com: ‘How To Become A Day Trader’
http://www.askmen.com/money/investing_10…

“Which Is Better, Buy-and-Hold or Market Timing?”

“Do You Have What It Takes to Be a Market Timer

Droke, Clif – Technical Analysis Simplified

Kahn, Michael N. – Tech. Anal. Plain & Simple

Kamich, Bruce M.- How Technical Analysis Works

Lefevre, Edwin – Reminiscences of a Stock Operator

Lofton, Todd – Getting Started in Futures

Lowenstein, Roger – Buffet (Warren)-The Making of a Capitalist

O’Neil, William J.- How to Make Money in Stocks

Oz, Tony – How to Make Money From Wall Street

Rotella, Robert P. – Elements of Successful Trading, The

Schwager, Jack – Stock Market Wizards

Douglas, Mark – Trading in the Zone

Options as a Strategic Investment by Lawrence G. McMillan

If you are in the USA, you can get all of these books at your local library through the Interlibrary Loan system for free.

Richard asks…

How much does average Day Traders make?

I heard you can make millions day trading but is that true?

Also, how much do top traders make?

John answers:

There is no such thing as the ‘average day trader”.

There are no records maintained by any one as to how much traders make or loose.

Yes I know traders have made millions, but they are professionals.

What is a ::top” trader, a good trader is one who is successful and traders are not always judged by what they make, since no trader makes money on every trade they do. It more important for traders to protect what they have and have the ability to limit their losses.

So no one or any organization knows what traders make, and there is no “average” trader nor is there any record or title given to “top” trades/

Charles asks…

How can I become a professional day trader?

Would like to know what it takes to become successful and self-sufficient. Thanks.

John answers:

You can end up with a small fortune as long as you start with a large fortune. Day trading is for chumps. Trade over months at the very least by watching historical trading ranges and levels. Read everything and anything about the company, competitors and industry as well as the greater market.

Sharon asks…

How to become a stock trader?

Im a junior in high school right now and i as a career i want to work with the stock market. I feel like by the time i graduate college that the market will be solid again. Do you recommned this? Are there any paths i should take? Any degrees i should get? Economics? I want to be a stock trader? Ive been playing fantasy/virtual stock trading and have been doing pretty well. Are day trading and stock trading the same? And where would you acquire a large capital to invest?

John answers:

A stock trader basically is a trader for his own account. A stockbroker is a person that buys and sells stock on behalf of others. Yes day trading and stock trading are the same (OK, similar), but a day trader closed out or winds up each transaction before the end of the day. Where do you get the capital? Well, you have to earn it first, unless you are a mutual fund or hedge fund manager. Here you go:

http://www.ehow.com/how_4606121_become-stock-trader.html
http://www.qwoter.com/college/Trading-Psychology/becoming_a_full_time_stock_trader.html
http://www.prlog.org/10182795-how-to-become-stock-trader-investor-stock-market-101.html
http://ezinearticles.com/?Discovering-How-To-Become-A-Successful-Stock-Trader&id=880065
http://www.ehow.com/how_5135_become-stockbroker.html
http://www.all-about-stockmarket.com/become-a-stock-broker.html

Daniel asks…

How can I continue to learn how to trade equities?

I recently started as a swing trader, occasionally a day trader. There are so many resources out there that I am not sure exactly the best place to start and get the best information. Unlike fundamental analysis where there is a lot of equation based information, technical analysis is more of an art than exact science.

I am not sure where to continue to really learn effective information that will continue to help me be a better trader. Thanks.

John answers:

The best way to learn to become a better trader would be to model an already successful trader. Obviously that is easier said than done. If I were you I would try and decide what type of trading I wanted to pursue. Learn a few techniques and become very proficient. You don’t need to learn a lot of techniques to be successful, just learn a few very well. Don’t get overloaded and bogged down with the ton of information available. Just keep it simple and consistent and you’ll become better.

Good Luck!

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