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Teach Me To Trade

Teach Me To Trade

Why is trading stocks for a living such a great job?  The first obvious reason is that there is a huge potential for getting rich, plain and simple. Starting out trading my strategy, for example, might produce an average of $30 a day.  If you can, through practice and habit, be consistent about it, then it is just a matter of time and simple math to get you to make $500 a day with my system.  A beginning student of mine can achieve this by slowly increasing their profit target and slowly increasing the number of shares they are trading per day.  For example, the first week will be just demo trading or "paper trading".  The second week might produce a $30 per day profit target.  The third week might produce a $50 per day profit target. The fourth week might produce a $100 per day profit target.  And on and on.  Once you hit your personal target, eg. $200 per day profit target, then you need to just maintain this level by sticking to the rules and doing whatever it is that got you here over and over again.  This might seem tedious as the weeks turn into months, but isn't this better than your day job ?  My students trade only an average of 5 to 15 minutes a day.  Making a full time income trading those hours (or minutes in this case) is a true phenomenon.  

There are a few ways to increase position size (position size means how many shares of stock are traded during each trade).  One way is to simply buy more shares using more money.  That can be an issue for some traders because stock trading is a money intensive or capital intensive venture.  This means that a lot of money is required to trade stocks compared to other financial vehicles such as futures, options and forex.  The flipside to this, however, is it is generally hard to lose money fast when you are trading stocks as oppose to those other financial vehicles or instruments just mentioned.  So you have to take the good with the bad, right?

So what is one to do if he/she doesn't have the money to simple buy more shares as they incrementally want to increase their position size week by week.  One way to accomplish this is to use leverage.  Some firms will let you leverage your account.  For example, if you have $5,000 in your account and your online broker lets you leverage 6x, you now have the power to turn your $5,000 account into $30,000 worth of trading power ($5,000 x 6 = $30,000).  Sounds great, right?  It is, but the flipside of this is that your potential losses increase at the same proportion as the leverage, 6 times in this case.  So beginning traders should not, I REPEAT, SHOULD NOT use leverage with their account balance until they have become a Master Trader.  There are endless examples of traders with little to no experience blowing out their account in the first few weeks of trading because they just couldn't resist leveraging their account too much, too quick.  SLOW AND STEADY WINS THE RACE, as they say.  There is no rush, remember.  The market will be there tomorrow and next week and the week thereafter.

Another way to increase position size without using your own money is to use OPM, that's right, Other People's Money.  Wall Street, essentially, is built on this principle.  So don't feel bad in any way if you are using other OPM to help you get rich.  First of all, there is no risk to your bank account when using OPM.  Second of all, there are A LOT of investors out there who will gladly throw large sums of money at a consistent, profitable trader they can trust.  All you have to do is produce a consistent track record from your online broker's reports and you are in business.  Even better, if you can get your trading track record audited by a reputable third party (such as KPMG or PWC) or use a website service such as , then your path to OPM couldn't get any easier.  

Teach Me To Trade

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Teach Me To Trade

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