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Jess,
Just a couple of unsolicited pointers. I take it you are trading the EMini
through IB. If this isn't the case I would strongly suggest you do so as you
will get a much better deal with regards to fills and have a much less steep
$ learning curve. You can always jump up to the big S&P after you start
making money in the EMinis. If you don't start out making money then you
have saved quite a bit in tuition cost and can still move up later if you so
choose. Use limit orders - especailly for entering a position. Start with 1
contract and work your way up after you have earned your way into another
contract. Leverage in the S&Ps is much higher than in individual stocks. Get
out of your losers fast, and bank your profits fast too (in S&P). Follow
your game plan but start off slow. Focus on the larger moves. Be patient and
don't try to take too many trades at first. Give yourself lots of time to
get going. One trade a day for a while may be plenty especially if your one
trade is a loser. The worst thing you can do is try to make it back by
trading bigger or more often. Ending with a loss after a day's work is OK.
This will teach you patience and discipline. Keep it in perspective - it is
just like tuition in trader's college. Definately don't try to do too much
too soon. You can lose it a lot faster than you can make it. Focus on taking
your best trades only at first, then work into doing a bit more after your
account is increasing and your executing is improving. Do everything you can
to maintain your confidence in yourself. Also, be realistic about what is
happening and take responsibility for the good, the bad and the ugly.
Trading takes a long time to be profitable - don't give up and don't expect
to be a Market Wizard after a month or a year. You may lose money for quite
some time before you can finally start making money. Limit your losses by
trading small and infrequently so you can preserve your capital and
confidence in yourself.
Since IB is internet based, I would set up a program on your trading
computer to ping them at regular intervals to make sure they are still up
and running so you don't trade while they are out (don't initiate a trade
while they're down). There are freeware programs available that will do
this - look on www.TuCows.com - search for Ping or under internet tools. I
would also do a trace route on them to make sure that you have a good
connection between you and IB. You can get a good trace route program at
www.analogx.com in the Network downloads. If you don't have a good
connection, get a different ISP or you will have ongoing difficulties. Make
sure you've got battery backups on your computer(s). Keep good records and
don't let the bookkeeping fall behind. IB makes it easy by posting the
account balance essentially in real time. Have a plan for backup order
placement in case your computer shuts down on you or some other unforseen
occurrence happens.
Take long walks - get away from the screen. Don't think you have to be glued
in front of it all day long. Trade when the liquidity is best - I would
avoid Fridays altogether for a whil especially preholiday Fridays. Most of
all, try to have fun and stay relaxed. Forgive yourself for your mistakes
and try to learn from them as well as your good trades. A loss isn't
necessarily equivalent to a bad trade. Sometimes some of your best trades
will be losing ones where you limited your losses from getting really big.
Trimming a loss short is like money in your pocket and is as good as a
profitable trade. Keep your money secure and don't let your pride get in
your way when you need to get out of a trade going against you.
When you are about to do something irrational that might put your account in
serious jeopardy, get away from the trading screen. Be your own best friend
and take yourself out of the game when your emotions are in control and
rationality has left you. Take the day off. This may not apply to you, but
remember that trading is a skill and until you have traded under live
conditions and developed that skill, you are a novice and are subject to
emotional pitfalls that you might not even be aware of currently.
I sincerely hope you do very well. I wish I'd had this advice given to me
when I was starting out, so I hope it is of benefit to you or some other
trader who is looking to make a go at the S&P. You mentioned that you are
doing well in your stock trading. Remember what made you successful there
and try to apply it to the S&P trading you will be doing. The S&P twists and
turns a lot more often than most stocks so it may be a bit of an adjustment
for you at first so take it easy and good luck. I can't recall how many
times I have looked back on a move in the S&P and said "if I hadn't seen it
I would never have believed it could do that." Be aware of the limit rules
and price levels. The info is on www.cme.com
Patrick White
----- Original Message -----
From: "Jess O'Leary" <jesso@xxxxxxxxxxxx>
To: <omega-list@xxxxxxxxxx>
Sent: Saturday, July 01, 2000 6:41 PM
Subject: Is IB ok to get started?
I do well with stocks, but after much learning and papertrading I'm going
to also start trading the spoos. It seems that Interactive Brokers is one of
the most popular brokers for this, does anyone have a better suggestion?
I do see people bitching about various problems with IB, but overall it
seems that they are about as good as it gets, for someone like me who
is just getting started with futures. I'll probably start the account with
50k.
If anyone has a better suggestion for a futures broker please let me know.
Thanks,
Jess
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