In this website, the topic of active trading is centered on day trading stocks. When I first started trading in 1990, day trading wasn’t really practical for the home based retail trader.
There were gadgets you could get for supposed real time quotes, but in order to make a trade you had to go through the painfully slow process of calling your broker and placing a trade and waiting for a confirmation of the entry or exit. Later on, my brokers started using new phone technology and allowed trades through touch tone phones.
Back then that was a big deal to me to be able to place trades using the phone without having to talk to a person. You could also get delayed quotes over the phone as well. At the time, I thought all that was pretty cool.
I remember thinking how great it would be, to be able to one day look at a computer screen to see stock charts on the screen and be able to place trades directly from the screen. It was very exciting for me, being someone who was interested in computers to know, that it was just a matter of time before technology made that a reality.
Commissions per trade back then was $35.00. And, believe it or not, I was using what was called a “deep discount broker”. That was a new term in the business, that the industry was pushing. At that time, it really was a deep discount, because if I remember correctly, my dad was paying his full service broker, Merrill Lynch, around $250 to buy just one stock.
So up until that time, I was making short term trades that lasted somewhere between a couple days to a couple weeks; mostly using simple breakout strategies I came up with from reading Investors Business Daily. That was my bible back then and what really got me started in all this.
At that time, and for a long time afterward, I wasn’t interested in reading about anything else…… except trading and the stock market.
Even though I was inexperienced, I actually did pretty well. Looking back, even though I was a complete novice, making money was possible, because I never allowed myself to take large losses and I used really basic positions sizing rules (I didn’t know what position sizing was back then), by splitting up my account into parts, and not trading only one stock.