how to decide on trading method, time frame and instrument

alphav6O3q · Nov 26, 2011

Hii

I am new to trading and am trying to establish a method of trading as well as the instrument of choice. Due to various restrictions, it seems to me that swing/position trading with equities would be a good method for me to follow.

However, after reading some books from a lot of knowledgeable people, it seems the trading method has to be well alligned with my psyche. However I dont know how to decide whether this method alligns with my pschological makeup.

Is there any resource (books, websites etc) which helped you decide what type of trading method and time frame to follow? I would love to know any suggestion on what books to read.

Or do people generally just experiment with multiple methods to find out what suits them?

Thanks

alphav6O3q · Nov 26, 2011

just had a myers briggs test...apparently i am an INTP

Bakinec · Nov 26, 2011

If you are blind in one eye and have an early stage cataract in another, or you have sudden attacks of the psyche where you urgently need to hide under the bed believing that the market makers are hunting for your stops, you might want to stick to long-term trading. This is well-known common sense wisdom in the trading community. I can't believe you didn't read that in books.

There have been cases where traders needed to be admitted to a psychiatric unit because they didn't heed this advice. Messing with time-frames under the belief that knowledge comes with experience is very dangerous and naive.

Be careful out there.

pepdegree · Nov 26, 2011

Bakinec · Nov 26, 2011

Quote from alphav6O3q:

just had a myers briggs test...apparently i am an INTP

Another red flag. INTPs have been known to spontaneously jump out of a window and die when the price doesn't reach their target. There has long been a conspiracy to cover this up on many mainstream trading forums and one of their tactics is to label you a crackpot if you mention this. But the truth shall set you free (and spare you a high-impact death).

alphav6O3q · Nov 26, 2011

Hii Gubinec,

I understand the fact that real experience with trading can be replaced with reading books, to decide what time frame, instrument, method to use. My question was mainly to ask for suggestions for any general guidelines. There are literally hundreds or thousands of systems, and going through a lot of them will be a waste of time.

The main reason I posted for this was because I realized that the method, time frame, instrument I was choosing was based on some other restrictions rather than based on my personality. It seems people tend to agree that the choice of your system should be based first on your personality and then on everything else.

Also what do you mean by "Messing with time-frames under the belief that knowledge comes with experience is very dangerous and naive."

do you mean that if I dont get good results initially with my time frame, I should instead try to optimize the entry/exit/choice of stocks criteria instead of trying to reduce the time frame?

pepdegree · Nov 26, 2011

Fook the personality,find a MENTOR!!!

jinxu · Nov 26, 2011

Quote from alphav6O3q:

Also what do you mean by "Messing with time-frames under the belief that knowledge comes with experience is very dangerous and naive."

It doesn't mean anything. Gubinec is either crazy or messing with your head. Find a method that works, then train your psyche to use it. Not the other way around.

P.S. But it was kinda funny that you thought he was serious.

Bakinec · Nov 26, 2011

Don't pay attention to jinxao. Didn't I say they will start calling you crazy?

Quote from alphav6O3q:

The main reason I posted for this was because I realized that the method, time frame, instrument I was choosing was based on some other restrictions rather than based on my personality. It seems people tend to agree that the choice of your system should be based first on your personality and then on everything else.

Of course. Your personality has a lot to do with whether you will find success and happiness with a particular system. Are you outgoing and sociable? Or are you inclined to cozy up on the couch with a trading-strategies encyclopedia? All successful traders have spent a lot of time looking for that special system. Alas, most of the time it's not until it's too late that they realize that most of them are with you only for your wallet. In most cases, the traders simply fail, as they run out of money. It's hard to find a truly compatible system in this cold trading universe. However, you will find that true compatibility comes with persistence in discipline. Even the most compatible system in the world will not satisfy your heart if you show no persistence in sticking to it.

Quote from alphav6O3q:

Also what do you mean by "Messing with time-frames under the belief that knowledge comes with experience is very dangerous and naive."

do you mean that if I dont get good results initially with my time frame, I should instead try to optimize the entry/exit/choice of stocks criteria instead of trying to reduce the time frame?

Yes. Whether you're a one-minute or a one-hour man, it's important to optimize your entry and exit to get the best response out of your system. However, no matter how much you optimize, not all your of exits will be a result of price reaching and shooting past your target. Be ready to deal with the frustration and anger that comes upon you when price retreats and takes out your stop.

ha-pattern · Nov 26, 2011

Quote from alphav6O3q:

Hii Gubinec,

I understand the fact that real experience with trading can be replaced with reading books, to decide what time frame, instrument, method to use. My question was mainly to ask for suggestions for any general guidelines. There are literally hundreds or thousands of systems, and going through a lot of them will be a waste of time.

The main reason I posted for this was because I realized that the method, time frame, instrument I was choosing was based on some other restrictions rather than based on my personality. It seems people tend to agree that the choice of your system should be based first on your personality and then on everything else.

Also what do you mean by "Messing with time-frames under the belief that knowledge comes with experience is very dangerous and naive."

do you mean that if I dont get good results initially with my time frame, I should instead try to optimize the entry/exit/choice of stocks criteria instead of trying to reduce the time frame?

I'm INTP too, albeit without a job to match it, and the 'dangerous' is right. Trading evokes strong feelings and promotes illogical actions. I'd say it's the realists and those most in line with their gut feelings that do better, so work there is first. The rest is only about limiting the number of variables you're able to deal with when trading. Anybody can get some kind of edge after a decent amount of time, in discovering which variables.