How to transition from Books to the Screen

C

cubsguy81

So I've been reading several decent trading books over the past year that I determined were good from other posters on ET:

A few examples:

-Technical Analysis of the Financial Markets, John Murphy
-Trading in the Zone, Mark Douglas
-Market Wizards

I am having trouble figuring out how to transition from reading the books and following the market each day to actaully making progress towards becoming a trader. I have the time, I just don't know what to do. I think I have analysis paralysis and so much information it is overwhelming and don't know what to do so I just spend time on ET trying to figure it out by studying journals and cutting through the bs to gather good nuggets of information. I know I need to engage in actual daily study of the market but I don't know what market(s) to start out with to get my bearings, best charting software to use, etc.

Any constructive thoughts to get me going down the road? Once I have a path I am confident in my ability to proceed. I just need that nudge.
 
If I may suggest, use the Thinkorswim platform papermoney trading and focus on 1 market. As a suggestion, focus on futures YM or ES. The platform is free and so is the data, the analytical tools are decent and TOS is constantly upgrading their platform.

It can certainly be confusing, knowing which way to go, but I think you will be reasonably happy not to spend bucks learning (or losing learning!!!)

This will get you relatively live experience at no cost nor risk. Try this for a while and most definitely before risking $$$$.

T_182
 
The anxiety you are experiencing is completely natural considering that you are just starting out. The cardinal rule for this stage of your trader development is to keep it small. But you are not a trader until you actually put money at risk. Avoid spending too much time on a simulator. Simulators are good for learning to operate the software, but the lack of real risk can give you a false sense of security.

Steenbarger writes in "Enhancing Trader Performance" that there at least six types of trader, and each can be successful. You need to find out what type you are. That will narrow the scope of what you need to know to succeed.
 
I would suggest that you write out a trading plan and some trading rules. This plan should outline the markets you want to trade, your trade size, money management, entry/exit techniques, and most importantly a daily routine to follow (this is probably most important because your new to trading, so you need some disipline and you need to think of trading as business!). This plan should also include things such as (1) Sunday night you should print out a weekly calendar of economic events/news for the week ahead (with notes as too which reports/news events will impact your market/trading the most), and get ready for the trading week; (2) Daily Pre-Market study (such as a block of time before the market even opens that you'll go over any new news or articles, maybe just skim through the WSJ or something or analyze overnight price action, ect...); (3) if your a discretionary trader (prior to each market open) you should make some "if-then" statements/predictions on where you think the market might go (for example: bullish bias above this price, bearish bias below; retracement points; market type predictions: range or trend day; key levels/pivots, volume notes, ect...); (4) a Post-Market routine that may include analyzing all your daily trades and the days market actions, volume & open interest analysis; then outline a trading plan for the next session, ect....

You'll also want to create a trading journal that outlines all your trades - when you got in and out, why you made the trade, how much "heat" you had to take, and also some emotional questions like if you got the urge to liquidate a position early, panics, getting too greedy, ect...

Then just have the discipline to follow up, re-read, and study all that information and then make new trading rules for yourself (for example: maybe from studying all your data you realize that you liquidate positions too early, so you may make a trading rule like: wait 1 price bar before liquidating when you feel the urge to execute, ect....)

Then just have the discipline to follow everything above that may be outlined in your plan. A lot of traders end up failing simply because they are too lazy. You may want to read Steenbargers (sp?) newest book "Enhancing Trader Performance", he stresses that sort of stuff....he then also teaches you how to Coach yourself and address emotional problems that may take away from your trading.

good luck
 
Quote from jsmooth:

I would suggest that you write out a trading plan and some trading rules. This plan should outline the markets you want to trade, your trade size, money management, entry/exit techniques, and most importantly a daily routine to follow (this is probably most important because your new to trading, so you need some disipline and you need to think of trading as business!). This plan should also include things such as (1) Sunday night you should print out a weekly calendar of economic events/news for the week ahead (with notes as too which reports/news events will impact your market/trading the most), and get ready for the trading week; (2) Daily Pre-Market study (such as a block of time before the market even opens that you'll go over any new news or articles, maybe just skim through the WSJ or something or analyze overnight price action, ect...); (3) if your a discretionary trader (prior to each market open) you should make some "if-then" statements/predictions on where you think the market might go (for example: bullish bias above this price, bearish bias below; retracement points; market type predictions: range or trend day; key levels/pivots, volume notes, ect...); (4) a Post-Market routine that may include analyzing all your daily trades and the days market actions, volume & open interest analysis; then outline a trading plan for the next session, ect....

You'll also want to create a trading journal that outlines all your trades - when you got in and out, why you made the trade, how much "heat" you had to take, and also some emotional questions like if you got the urge to liquidate a position early, panics, getting too greedy, ect...

Then just have the discipline to follow up, re-read, and study all that information and then make new trading rules for yourself (for example: maybe from studying all your data you realize that you liquidate positions too early, so you may make a trading rule like: wait 1 price bar before liquidating when you feel the urge to execute, ect....)

Then just have the discipline to follow everything above that may be outlined in your plan. A lot of traders end up failing simply because they are too lazy. You may want to read Steenbargers (sp?) newest book "Enhancing Trader Performance", he stresses that sort of stuff....he then also teaches you how to Coach yourself and address emotional problems that may take away from your trading.

good luck
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very good post Jsmooth
 
Thank you for the thoughtful and encouraging advice thus far. Tasker, I have looked at TOS for simulation. Do you think they are robust enough versus paying for a separate charting program?

Jsmooth - Thank you for the specifics. Definitely gave me some actionable items I can proceed with. I'll be looking into "Enhancing Trader Performance" as well to read.
 
Quote from cubsguy81:

Thank you for the thoughtful and encouraging advice thus far. Tasker, I have looked at TOS for simulation. Do you think they are robust enough versus paying for a separate charting program?
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IMO yes, however I have very limited experience with other software (OEC trader, Ninja) so I would have to defer to the opinion of others. My point is that it is cost effective to help get your feet wet not only in charting but order placing, albeit somewhat limited.

If charting is an area of interest another No cost option is Ninja which has built in simulation (not the same as TOS which uses real data) and you can get a no cost data feed from OpenTic for end of day data. But I honestly feel that, based on your original description, that TOS is your best bet for an initial introduction.

Regards,

T_182
 
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