Yes Agreed, and that takes me into another aspect of this business and that is research.
My contention is that one of the reasons that traders struggle is that they do not do their own research. Instead most of you simply use whatever "seems" to work, and is being used by other retail traders.
Also one has to take into consideration the temperment of the trader. Some of us are not cut out to be intraday traders. We may not want to sit in front of a trading screen all day. We may have other jobs and wish to trade part time. In addition we all have different tolerance for risk.
These are but a few of the important issues that traders should resolve on their own before starting to trader. Unfortunately they almost never do this important work until they have lost significant amounts of money.
My own recommendation is that new traders start by learning some basic skills.
1. How to use a spreadsheet (Excel for instance)
2. Learn basic parametric statistics (take a class if you have to)
3. Pick a computer language and learn it (Basic, Pascal, C, Perl whatever, just pick one and start to learn how to program
4. Read....Read about the various ways to test markets
On this subject I have plenty to say, but I will keep it brief. In my opinion "backtesting" as it is implemented in by most people, does not work....I suggest that people learn to do what I call "characterizing" the market....My advice is to start by reading a book by Clifford Sherry titled "The Mathematics of Technical Analysis".
I hope this helps
Steve
