how to decide on trading method, time frame and instrument
- Thread starter alphav6O3q
- Start date
getting to successful trading is really a long road, regardless of what anyone will tell you. There is really no incentive for anyone to tell you what they are doing if they are successful and consistent. It is a zero sum game right?
If I would've focused on understanding market mechanics and understanding the game I would have made much more progress in the beginning. Ask yourself, why is somebody able to extract a consistent flow of capital from the market, or is it possible? The reason is any system you will employ will be front running order flow.
The main approaches either involve selling volatility(mean reversion) or the opposite(trend, momentum). Understand why both of them work and find something that fits your personality.
Or look at a chart, and do the exact opposite of what you think will happen. No I am not kidding about this, I remember somebody in the Market Wizards book saying most traders do worse than random!
Oanda allows you to trade with micro lots, meaning, you can literally trade with one dollar.
He can also learn about leverage, and what that does or does not do for his PNL. I tell everyone who wants to start trading to get with this firm. I run Amibroker powered by ESignal alongside Oanda's charts and have never had anything more than a one or two pip discrepancy.
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Good questions al60& 3 ;
actually i would have been better off with much more severe restrictions on daytrading.Sure i had plemty of daytrade thrills;
but profit is more important in a business than any personality test.
Jack Schwager 3 top Trading books may help you;
i still study & read them.Also Market Makers Edge Book is helpful
not the daytrading sub-title;but the multimonth candle charts.
Did i just write about a market maker that uses multimonth charts??;
sure did - market maker uses multimonth charts.That's wisdom.
As far as personality does go,
snowshoe rabbits may go fast on snow,
rabbits may go slow;
turtles seldom go fast
Hii All
Thanks for sharing your experiences
@Nodoji Thanks for the recommendations on the Al brooks method and the other book/links. I have seen recommendations of the 2 books, but havent read yet.
@ammo, Trader13, Shanb I have mainly been studying the CANSLIM method for stocks for the past month or so. I started with a long term methodology mainly because I read that it is easier to become profitable in the long term trading compared to short term day trading. I had though that I would gradually reduce the time scale as I became more proficient in the market mechanics. Since I already have a good job, I am in no hurry to throw money at the market. Initially my target was to study, backtest and come up with a reliable method and start trading from August'12. I also have been reading "trading and exchanges" which I found to be a great introduction to the various facets of trading. A blog that I found very useful was Peter Brandts blog.
I am aware of the 2% risk concept and have read the first 2 Market Wizards books. These book were what made me aware of a lot of these important concepts. I have read some of Dr. Van Thrapes work from the Market Wizards book, but will try to look up his own book too.
@RCG Trader, oldtime
1. Why do you suggest I begin with FX?
2. Is there any difference between just normal manual backtesting/forward testing without real money and the method you suggested. The reason is I have been doing the manual backtesting on the thinkorswim platform and am pretty familiar with it. If I have to move to another platform, it will take some time to get familiar with, but I will probably move if it is important enough.
Thanks for the other suggestions, I will study them and get back for more questions
Thanks for sharing your experiences
@Nodoji Thanks for the recommendations on the Al brooks method and the other book/links. I have seen recommendations of the 2 books, but havent read yet.
@ammo, Trader13, Shanb I have mainly been studying the CANSLIM method for stocks for the past month or so. I started with a long term methodology mainly because I read that it is easier to become profitable in the long term trading compared to short term day trading. I had though that I would gradually reduce the time scale as I became more proficient in the market mechanics. Since I already have a good job, I am in no hurry to throw money at the market. Initially my target was to study, backtest and come up with a reliable method and start trading from August'12. I also have been reading "trading and exchanges" which I found to be a great introduction to the various facets of trading. A blog that I found very useful was Peter Brandts blog.
I am aware of the 2% risk concept and have read the first 2 Market Wizards books. These book were what made me aware of a lot of these important concepts. I have read some of Dr. Van Thrapes work from the Market Wizards book, but will try to look up his own book too.
@RCG Trader, oldtime
1. Why do you suggest I begin with FX?
2. Is there any difference between just normal manual backtesting/forward testing without real money and the method you suggested. The reason is I have been doing the manual backtesting on the thinkorswim platform and am pretty familiar with it. If I have to move to another platform, it will take some time to get familiar with, but I will probably move if it is important enough.
Thanks for the other suggestions, I will study them and get back for more questions
that' cool. You're doing allright. You're farther along than I thought you were. Usually people start out short and gradually move to longer time frames, in which case FX is a good place to start. If you've got a job, a 401k and an IRA invested in mutual funds, trading on the side and trying to beat them can be an enjoyable hobby. Plus, you don't feel so bad when the trading account is down and the conservative 401k in which you did everything right according to all wise people you listened to is also down. It's hard to beat that market, almost no one does, but it's fun to try. Good LuckQuote from alphav6O3q:
Hii All
Thanks for sharing your experiences
@Nodoji Thanks for the recommendations on the Al brooks method and the other book/links. I have seen recommendations of the 2 books, but havent read yet.
@ammo, Trader13, Shanb I have mainly been studying the CANSLIM method for stocks for the past month or so. I started with a long term methodology mainly because I read that it is easier to become profitable in the long term trading compared to short term day trading. I had though that I would gradually reduce the time scale as I became more proficient in the market mechanics. Since I already have a good job, I am in no hurry to throw money at the market. Initially my target was to study, backtest and come up with a reliable method and start trading from August'12. I also have been reading "trading and exchanges" which I found to be a great introduction to the various facets of trading. A blog that I found very useful was Peter Brandts blog.
I am aware of the 2% risk concept and have read the first 2 Market Wizards books. These book were what made me aware of a lot of these important concepts. I have read some of Dr. Van Thrapes work from the Market Wizards book, but will try to look up his own book too.
@RCG Trader, oldtime
1. Why do you suggest I begin with FX?
2. Is there any difference between just normal manual backtesting/forward testing without real money and the method you suggested. The reason is I have been doing the manual backtesting on the thinkorswim platform and am pretty familiar with it. If I have to move to another platform, it will take some time to get familiar with, but I will probably move if it is important enough.
Thanks for the other suggestions, I will study them and get back for more questions
I don't know what you do for a living, or what you had to go through to get there, but if I posted on your website where you hang out and told you I had read some books and wanted to do what you do for a living as a hobby on the side what would you say?
In the 90's many people cut back on work and even quit their jobs because they were making more in their accounts than they were at their real job.
But when the market turned they didn't have the trading skills to survive. And many of them ended up having to work harder and longer to make up for the life savings they lost.
Trading can be a fine hobby, but it's no substitute for a real job or a solid longterm investment program. But a few decide to try and make it a business, and they don't ask questions like, "How can I do this and still be happy." And if they do they are probably doomed to failure.
If you just want to do it on the side, it should be the easiest thing to decide what method, time frame and instrument makes you happy.
A lot of us don't like to position trade bonds on fundamentals because it makes us unhappy. But we do because we have to.
In the 90's many people cut back on work and even quit their jobs because they were making more in their accounts than they were at their real job.
But when the market turned they didn't have the trading skills to survive. And many of them ended up having to work harder and longer to make up for the life savings they lost.
Trading can be a fine hobby, but it's no substitute for a real job or a solid longterm investment program. But a few decide to try and make it a business, and they don't ask questions like, "How can I do this and still be happy." And if they do they are probably doomed to failure.
If you just want to do it on the side, it should be the easiest thing to decide what method, time frame and instrument makes you happy.
A lot of us don't like to position trade bonds on fundamentals because it makes us unhappy. But we do because we have to.
