Getting your feet wet -- starting to trade

Prologue:

There has been from time to time questions asked by numerous people on this forum about what they need to get started in trading. Most of these questions have cropped up in different threads and in different times. Never have I seen a definitive thread which details the sort of investment you need to get started as a daytrader. Perhaps this is because mostly these questions have come from n00bs who have had no or a limited exposure to trading. So, I feel the urge, as an experienced n00b to clear the air once and for all, of course with input from the pros. BAV's post about software has been an inspiration, so let me thank him. Enough of beating about the bush, let's get on with the game now.

Pre-requisites:

(In no particular order of preference, and by no means a complete list)

• Capital
• Bank account
• Broker
• Internet Connection
• Software
• Hardware
• Data
• Books

Capital

Typcally, the amount you have to have. You use the seed capital to trade. Also, you need to have stashed away an equal amount (or more) to fall back on if you get wiped out.

Total Capital = Seed Capital + 2/3 x (Seed capital)
where Seed Capital >= 100K

Bank Account

Opening a bank account does not cost a fortune, and we allocate 1K as the tops.

Broker

Depending on which exchange(s) you wish to trade this can vary a lot. Again I would put a tag of 1K-5K here, but this needs to be revisited.

Intenet Connection

You sure need something that's fast. And you dont want download liimits -- this is one of surest ways to get screwed bigtime if you do. Airtel gives you good connectivity (across India) for about 1.5K pm. There is a setup cost of about 3K. Getting wifi of course is a tad more costly. Someone having wifi can update us.

A backup connection is a good idea for the rainy days. YMMV.

Software

Earmark about 6K-10K for something good. We'll revisit our budget later.

Hardware

Two machines, at least, prefereably inter-connected. You want high speed CPUs and at least one of them should have a good GPU (after all a good chart is worth a terabyte of data). One should be used as a trading terminal and the other as a backup, data server and whatever else you want to use it for.
Looks like you can get a decent bargain for two within about 60K-100K. A laptop and a desktop -- probably?

Throw in a UPS/inverter for about 3K. Some might want an all-in-one as well but is this required?

Data

Choose one with backfill. This will be around 5K a month. But there are choices.

Books

A subjective thing. But a small library is called for. A budget of 15K-25K hopefully suffices (most of the good books are from foreign authors/publishers and each one costs an arm and a leg). The ability to read softcopy significantly reduces this cost. But then its easier to take a book to the shitbox than your laptop.

Epilogue

The figures are subject to change. Once we have a satisfactory list, we can probably also work out the fixed cost and running costs. And then dive in!

Thanks skarpio for the thread.

For starting ,

1.A good computer and a back computer .
2.A good chair , if you have to sit for 10 hours a day , this is must .Users can throw more light on this .
3.2 internet connections of 2 different providers.I have BSNL 2mbps now (500 rs/month+telephone charges), searching one more now .
4.Power back ,this is must . A good 1kv inverter should cost ~12-13 k and give a back up time of 3-4 hours .

This is all I have to post now , once I experience the remaining will post as and when required .

A very nice list, however all these things matter only if the 'method' is in place.When you know how the market functions and you are consistently right, you can pullout multiples of the daily range while being wrong once every 20 trades using a dialup, 14inch CRT with a Celeron processor while sitting on a wooden chair.

Ah, such encouragement prods me on. There is difference in what you can do and what you do. Is that how you trade the Dow? But I don't want your answer, because you want me to start arguing, pull me up to your level and beat me with experience N'est-ce pas, monsieur?

But Sir, you have no mention of the 'method' or the budget for the 'research'. When the market is ticking rapidly against your position it doesnt really matter whether the nVidia graphics card on your desktop makes the chart looks pretty.

I did think of the method. The market strategy, the trader strategy and the working strategy (as CBOT would put it). But, I found it difficult to quantify. Let me reiterate the list is not complete. (You might have missed the disclaimer in the OP, but we'll not fight about it.)

Thinking about it and talking about it is not the same as doing it Sir. And I didnt know that CBOT published the strategy map? I am not saying that the list isnt good or not worth working on but its very common for people to put the cart before the horse.

True. But the method is subjective and I'll leave it there. Help me if you can, to attach a cost to it. I was thinking of things you need to buy. And no CBOT does not give you the strategy map but they do talk about trader strategy, market strategy etc here. Tihs is from cisco-futures, but I found it from one of the links on CBOT. I stand corrected.

Think of a number and multiply it by 100 times, thats a fair estimate of the costs involved to learn trading.It will eventually dwarf all other physical costs involved.

Scarpio,

I can only share one of my bitter experience here Frankly,Seed Capital HAS to be X * 4,
i was cleanly Wiped Out thrice (each time 2 Lacks).
At that time i had Grown up Son & Daughter at home,no body in Family came to know anything,only time i took Loan in my Life was the 4th Time.
Hence please dont ever be UNDERCAPITALIZED,at moments when you have nothing in Bank & running in Debt,i can assure you ALL TRADES WILL BE WRONG,it requires lots of will ,tears,blood shot eyes & deep scared memories,to lift you from that End Less Pit.
Humility at extreme within Self & Society,Mkt Humbels ALL.
Whenever still date i hear some newbie Lost Big,truly i get upset,somehow i cant wipe out the sadness,though i may not have even seen his/her face.
Frankly belive me,i slowly go to the wash basin,eyes bocome moist.No members of TJ should never allow him/her to go to
that Level,atleast Seed Capital should be 4 times.

Taking Delivery whenever in trouble (which the Bull Mkt eventually bailed out) is not & never can be treated as DAY TRADING.
As Jesse Rightly pointed out,with Super Fast computer & Triple Screen ,blah blah is useless,without Method .Lots of Self Belief,a Monk type Devotion.
How many of us can make only just Rs 200.00 daily consistently ? by Only Day Trading,Percentage wise meagre.
1st Invest in Knowledge,you are extremely Lucky to have a mentor like Jesse,if i would have got this oppurtunity in my early Trading Life,Jesse would not have been Lonely now.
All other is unimportant;imp is
Adequeate Capital,Right Methodology,Good Mentor.
Then after when we are prepeared these in your List are necessary.

Asish