Brand new traders..........read this

Another thing.... the reason i was able to make it so long without making any money and not go insane was..... before i started:

1. I payed off all my debts.
2. Payed off all my bills for the next 2 years.
3. Gave myself enough cash in the checking account to live off for two years


Was never in under any pressure.... kept my thinking clear...
 
Thanks lilduckling.
A lot of your words do ring true specially re the r/r 3:1 and stop loss/money management strategies. My personal experience has shown that small stops are invariably stopped out and the problem becomes finding that 3 to 1 trade.
As a newbie the only info I think I can rely on are the advanced traders here and books.
If that advice isn't correct the how does a newbie learn?
 
Quote from lilduckling:


1. I payed off all my debts.
2. Payed off all my bills for the next 2 years.
3. Gave myself enough cash in the checking account to live off for two years
More...

Dam, how long did that take for you to do along with save up your risk capital?
 
Quote from Thor1:


As a newbie the only info I think I can rely on are the advanced traders here and books.
If that advice isn't correct the how does a newbie learn?
More...

Alot of the advice is good.... its when someone tries to tell you that a new trader, with no market experience can make money right off the bat just by following certain methods.... walk away from those.

Remember... there are thousands of different methods to make money in the mkts..... there is no "specific" secret.....
Thousands of methods.... and all of them extremely difficult.




Casper..... that dead end job that i was at for 15 years....... they had a 401K plan :D
 
lilduckling

your long post above was tops.

Although the stocks -> dow thing

hmmm :D
Might be a difference of opinions :D
The bad things you mentioned that happened to your stock trades can be easily neutralized if you know some ideas :)
 
thanks coolweb....... truth be told i gave up on stocks.... concentrating on just the YM now. Dont forget.... it takes longer for me to learn..... im a dummy when it comes to this stuff.
 
lilduckling, excellent post/thread.
You have hit the issue dead center.

My road in trading was also full of disappointments, constant up and downs until I realized certain things most of which you are mentioning in your post.

I strongly believe that for any trader to succeed it takes a certain set of mind, capital and personal time with the market.

You don’t need secret Fibonacci cluster software, ma's, RSI's, super holy grail indicators. What you do need is simply enough capital and discipline to last you through the learning process until you "get" it. And yes the fog does lift eventually. After looking at charts full time over couple of years and during live market hours it is hard not to start seeing things.

In regards to trading systems.. You can have 2 guys sitting literarily side by side trading the same system. One trying to follow the other and one may still loose money while the othe is making nice profit consistently.

We all have different psychological backgrounds and what works for one may not work for others. If one is a PHD for example, the going will be tougher than it would for my 10 year old. It is because highly educated people think they can outsmart the market. At the end the market ALWAYS humbles them one way or another.

I for trade with bar charts only using only volume and price patterns. A dear friend of mine trades with candles only, ma's stochs and also does well. He sees "hammers" I see consolidations/triangles, etc. Yet many times we will be in the same trade without knowing it.

One needs an intimate time with the markets without the chat rooms, voice rooms and other bs to start making sense of all this and start being consistently profitable.

You really don’t need the news, pe ratios and other bs to trade effectively. Its not the news that moves the market but the reaction to the news. How many times a good trader will get into the trade with momentum, make good entry/exit and later he will see some news and think aaaaah that is why it moved.

I like trading stocks on nasdaq, you might like forex or some other form. If a trader finds the market and strategy that is compatible with his psychology he will do fine. Couple that with great discipline and unlearning all that you have learned since you were a little child and you will perfect your trading. (money will be just a byproduct) 15-20 trades a day, trading only when things move, staying out of chop, taking care of your body and soul and 2, 3 pts a day consistently are totally doable.

I also wonder how do some folks have time to post 1000’s or posts on this forum, no offense just wondering.

Its important what you see, not what you think you see..
 
Quote from dextel:

lilduckling, excellent post/thread.
You have hit the issue dead center.
More...

No offence lilduckling but this might well have been an even better post. Great to see no "method bigotry" but just a good description of the evolution needed over time.

A great thread for new entrants - it really does take time for all but the luckiest.
 
Quote from Thor1:

Yes, I did think the same thing. Could you provide some more details on how you approach swing trading?
lilduckling, excellent thread here.
How did you finally solve the problem of stops?
I started trading recently and find that a lot of my trades are stopped out with a 5% stop. The few that continue don't make enough to cover the lost trades, so how did you ovecome this?
More...



wow...sorry, I haven't checked back in a while. My system is pretty simple and I "came up" with it way back (over the summer) when I literally had no idea what i was doing. I figured that I had a few profitable trades so I might as well stick with it. And i probably will while I'm in school or until I come up with something better. Yes, I have lost on trades but only 200 here, 100 there, etc. because of my stops. Often times i base my stops off the weekly charts so i don't get stopped out all the time.

Back in the day when i got metastock EOD, I was playing around with all the "expert advisor" options. All i really was looking for was something to weed out all the crappy stocks, then do my own analysis. It took me about 2 months to find an expert advisor option that i liked and actually turned out to be profitable when i backtested it. Anyone who owns metastock, knows there are like a thousand of them. They call their scanners, 'explorations.' Well i set that expert advisor to 'explore' or scan through all the stocks for buy and sell signals.

When its all done, I look at all the stocks that had a buy signal for the current day. I use the typical candlestick charts, MACD, stochastic and MA's. I've been trying to find some other indicator but it is also taking me a very long time. I check out all the daily charts and if I don't like one, I get rid of it. After i have a decent list of bullish looking stocks, i check out all their weekly charts. I look for the exact same criteria in their weekly charts and have found that when the daily and weekly look similar, there is a high probability the stock will go up. (I have heard this about day trading for 3, 5 and 10 min charts all looking similar. It seems to be true for swing trading as well.)

So nothing fancy, just something to weed out stocks and a lot of my own analysis. I typically hold stocks anywhere from a week to a few months depending on what their weekly charts look like. Of course volume plays a role is what i trade and price does a little as well because my account is small.
 
dextel, great post. You have basically summarised my entire learning curve over the last two years.

It's not rocket science: it's experience watching the charts, finding the simple tools that best suit you, and keeping yourself healthy mentally and physically in order to be on the ball every day.

magicdust
 
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