Beginner seeking guidance

[DeltaRisk]

Thanks Robby. 0.5% at risk per trade would be a wise move, smoothing out losses/gains whilst starting out.

It doesn't work like that. Trading is akin to neurosurgery, you don't make anything substantial for 15 years or more, or never.

I trade for a living, I don't work very hard.
I work maybe one to two hours every trading day, but it took me almost a decade to figure it out.
There's probably one person on this site that can understand consistency. His tag is Maverick74, read every single one of his posts.

I hate to tell any wide eyed dreamer this but you've got more than 1000 hours of studying, backtesting, and reworking your system before you should ever touch the mouse.

Traders have a loss rate of 99% on a long enough time span. Do you really believe Tim Sykes will change your life?

 

[Bennny]

Thanks for the reality check....

It seems the time may not be worth it - In 15 years, the development business will have grown to a point where I most definitely won't care about the trading income.

 

[Bennny]

Do you really believe Tim Sykes will change your life?

Ha! Who mentioned anything about snake oil salesmen?

 

[wrbtrader]

That's where I could struggle Lawrence - I don't like the art part.

I like clear cut rules to follow, that stack the probability in my favour.

Those that believe the same usually get involved in "automation or algorithm trading" because anything else you'll guaranteed to come across the art part of trading.

Regardless, I recommend you find another hobby because with what you're already doing...you will not have time to put in the proper learning that's needed for trading success.

 

[Xela]

Hi Bennny, I trade for a living but have never traded a stock in my life and can therefore offer no advice on about 95% of what you've asked.

But there's one comment in your original post which still prompts a thought from me, which I think might be worth a post ...

People say back testing doesn’t work.

They do.

But be careful not to take from this loosely expressed thought something that either isn't there to be taken or isn't quite true.

What they should say is that back-testing doesn't work reliably in the sense that something that appears profitable on back-testing won't necessarily be profitable, or as profitable, with a funded account.

There are many variables involved and it's a complicated subject. As you rightly observe in your OP, beginners don't know what they don't know.

Back-testing can still be immensely valuable as a way to exclude the 99+% of stuff that doesn't show a statistically significant positive expectancy even on a back-test. And that can actually be a very useful and helpful way to identify the 1% or less of stuff that can potentially work and is therefore potentially worthy of further investigation and forward-testing. In other words, back-testing - in spite of not being fully reliable - can be a pretty good way to filter out most of the crap and nonsense: it can demonstrate a lot of negatives pretty well, even though it can't demonstrate positives with certainty.

For this important reason, I'd advise you not to dismiss it out of hand just because "people say it doesn't work".

There's probably one person on this site that can understand consistency. His tag is Maverick74, read every single one of his posts.

That's certainly good advice - I endorse that suggestion.

 

[AAAintheBeltway]

Benny, no offense, but how do you think I'd do if I decided to take up real estate development in my spare time? You know, just to smooth out the uneven cash flow from trading.

Trading is risky and hard psychologically. The returns have almost nothing to do with the amount of effort you put in or how smart you are. Some people have a knack for it, and the people who survive generally have it in their blood. They can't imagine doing anything else, even though they know it is a brutal way to make a living.

The concept that trading is a good way to make steady money is crazy, but it is one that a lot of trading educators push. In reality, even day trading results are highly correlated to the market. Catch a good market, like we've had the past year, and you can make some serious cachingo if you know what you're doing or lucky, and it is often tough to tell the difference. A shitty market will grind down even the best.

I think your plan of not using leverage sounds prudent, but at the end of the day you won't find the potential returns worth your time. The whole point of daytrading is to use a lot of leverage, ie margin. Risk is somewhat attenuated because of the short holding period and no overnight exposure. I would advise you to just stash your investment funds between SPY and TLT and maybe play golf or something in your down time.

 

[AAAintheBeltway]

Back-testing can still be immensely valuable as a way to exclude the 99+% of stuff that doesn't show a statistically significant positive expectancy even on a back-test. And that can actually be a very useful and helpful way to identify the 1% or less of stuff that can potentially work and is therefore potentially worthy of further investigation and forward-testing. In other words, back-testing - in spite of not being fully reliable - can be a pretty good way to filter out most of the crap and nonsense.

Excellent advice.

 

[Option_Attack]

Day trading - low chance of profit.

How about hurricane/storm property rehab - high chance of profit, or at least lots of business...

Add to that regular index investing/dollar cost averaging - and another (over time) very high probability of profit.

 

[learner2007]

Back-testing can still be immensely valuable as a way to exclude the 99+% of stuff that doesn't show a statistically significant positive expectancy even on a back-test. And that can actually be a very useful and helpful way to identify the 1% or less of stuff that can work and is therefore potentially worthy of further investigation and forward-testing.

Bennny, adding something quite similar to what Xela very correctly stated above, by back testing, you will learn the very often overlooked point that the price movement will tell you what to do 1% of the time. But, more importantly,
99% of the time it will tell you what NOT to do!!

 

[qxr1011]

What’s the best way to learn the best strategy for me?

it looks like you think that knowledge of money making is readily available and you just have to learn it its not available you have to develop it out of nothing

and all the books and courses will not teach you trading

develop my strategy for >12 months before committing further

where the 12 months came from ? why not 12 days, or 12 years, or 120 years (or i am
sorry people do not live that long)

How long should I paper trade before committing funds to market?

until u will see that you consistently profitable on paper and you stop asking public the questions, and become capable of finding all answers yourself