Looking for mentor / guidance

Quote from c.chugani:

Ok I understand that one needs a solid and reliable (more often than not) trading edge before even risking any real money.

My question to you is, can one find an edge of this sort WITHOUT having studied physics, behavioural finance, advanced mathematics and the like?

Does a person which relies solely on price and volume stand a chance in todays markets?

I feel intimidated with all the available cutting edge software related to automated trading, algorithm programming, etc. etc. as they are not fields which I have much knowledge on.

Sometimes I feel that I can detect certain patterns in price and volume, but then I reflect and ask myself: "why would hedge funds and big institutional traders invest in expensive software and engineering if they could exploit an edge which is available through watching price and volume alone"?

Does a retail trader, which uses nothing but charting, price / volume patterns, intermarket relationships and discretionary conclusions stand a chance in today's market environment?

Seems like wishful thinking from my part.

Cheers.
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lol, there you go again, instead of looking at the proposition logically you're coming up with more negatives and preparing excuses for your failure even before you've tried, let alone failed!

First it was the 95% statistics, now it's hedge funds and cutting edge software, all those odds stacked against you. If you fail well hey, 95% fail and it's tough going up against people who have probably studied physics, behavioural finance, advanced mathematics, not to mention all those cutting edge software automated trading systems and algorithm programming! It won't be your fault if you fail and your opinion of your own self-worth will remain comfortably in tact, after all it was only wishful thinking that you could make it as a trader......

Trading, 80% psychology :)
 
<i>"Your biggest problem is going to be impatient. Few traders are going to be successful in 6 weeks or 6 months or even in a couple of years.

I will give you ONE piece of trading advice. UNTIL you can make money on paper regularly, don't go anywhere near your trading capital.

Some will tell you just to trade small at first, but again, UNTIL you can make money on paper regularly, don't go anywhere near your trading capital.

I will repeat again: UNTIL you can make money on paper regularly, don't go anywhere near your trading capital.

The thing most people do NOT have but need most, is a trading edge. They are not easy to find. They also sometimes disappear on you when the market structure/geometry changes."</i>

Amen, amen, amen. That and Makloda's advice are the only relevance in this thread. The rest is noise.

Your style of trading depends on a number of factors. Swing trading across several days' hold period may be where you begin. The action is much slower, hence decision process is more deliberate, emotional aspect may be easier.

You won't be trading for an income, so a job or career will influence your time available to trade.

If you have sideline income = job which allows intraday trading time AND that style suits your personality, it is a choice.

Your trading vehicle will be determined by your style of trading, for the most part. Where you live plays a part in that decision. Each market has an active period and a dull period of trading. If I lived in Europe, I'd most likely trade FX. The period from about midnight to 10am est is most active overall for FX. That's usually a quieter time for U.S. eminis in the globex.

There are countless ways to create an "edge" for trading. It seems to take forever just to find one. Once you understand price action, you'll see defined edges all around you... they are everywhere. Then it's a matter of which specifically to focus on and repeat for consistency. Most traders give up or go broke just before they discover that truth.

Here is a general rule of thumb: the more stuff on a trader's chart =screens, the less he understands about trading an edge. If you see a chart / workspace heaped with indicators and sentiment readings, that trader (including instructors) cannot clearly see the market. That's why they pile so much stuff on a chart... hoping something will leap out at them if everything aligns.

It's ok to use one or two indicators at most. They track price movement and give a sense of visual guidance as to what may happen next. Learning to read price bars alone is the epitome` of trading defined edges. Anything and everything needed to know about where price action is probable to go next is contained in price bar patterns. Period.

All the other tools, Level screens, MP volume studies, etc are merely derivatives of price bar action. They are one step removed. Price bar action alone is what you should focus on first. Everything else branches away from that.
 
Quote from austinp:



Your style of trading depends on .......etc etc etc
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Oh my God, among all that advice about times, instruments, markets, edges you omitted to mention the most important aspect of trading without which the rest is totally useless......money, risk, and trade management!

Strategy really is about the least important aspect of consistent profitability!

Sheeesh.......
 
<i>"Strategy really is about the least important aspect of consistent profitability!"</i>

What happens when you apply all of the management stuff to a worthless strategy with negative expectancy?

The OP is starting from square one. Cart before the horses
 
Quote from austinp:

<i>"Strategy really is about the least important aspect of consistent profitability!"</i>

What happens when you apply all of the management stuff to a worthless strategy with negative expectancy?

The OP is starting from square one. Cart before the horses
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I might be wrong with the following reasoning but,

couldn't a good stategy / edge / indicator turn out to have a negative expectancy in the long run due to poor risk management caused by the trader who trades such a strategy?

Ie. if the strategy is like a good Volvo, but the trader is like a bad driver, the chances of crashing the car are still high - even though the car is technically very safe..

Some people swear by highly accurate indicators / edges for long term profitablity.

Others develop mediocre technicals, but are excellent on managing their risk - so they still remain profitable in the long run.

Which of the two approaches is more appropriate for a beginner trader?
 
Quote from austinp:



What happens when you apply all of the management stuff to a worthless strategy with negative expectancy?

The OP is starting from square one. Cart before the horses
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Exactly, cart before the horses! What happens when you use a profitable strategy without applying good risk and trade management?

Markets and strategies can be a very personal thing, chosen and adapted to fit one's own personality, it's going to take the OP a while to find a good fit among the hundreds and thousands of variables.

Strategies come and go, gaining and losing effectiveness and efficiency, but one thing remains universally constant among all strategies and markets and that's the fundamental principal of all investments including trading.....control of risk and preservation of capital.

It's relatively unimportant what indicator or strategy he hits on, even tossing a coin can be profitable in the long term if trades and risk are managed correctly.

Once he has a handle on the fundamentals of trading he then has the security of knowing that no matter what happens he has developed the necessary skills to protect equity.

95% of traders don't lose because of poor strategy.
 
Quote from c.chugani:
That way I rest assured that this isn't a scam; and you get your money out of the same system you have sucessfully taught me to trade.
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You're already wasting your time responding to people like rewtree. You have to understand that the majority of people who respond here don't trade.

I didn't read your OP but I assume it's one of these 'I am a young guy and I want to learn trading. I am highly motivated and I have 20K' type posts.

There's only one way to do it. That is to open an account and start doing it. All the information you need about where to open an account, what strategy is best for a beginner, what returns you should expect, what to do when you hit a bad streak, everything... it's all here. You can figure out whether an indie guy with 20K and no programming/quant experience stands a chance in the markets

You can find it and read it in about 10-20 hours. If you don't have the desire or the drive necessary to use the search function to search it out, trading isn't for you.

The information available for free here is some of the most valuable free information available anywhere, but again, you have to look for it.
 
the house is rigged! that is rule number one
rule number two the hedge funds and other institutional players have you in their sights
three... the market is set up to take your money and is very efficient at it!
four they can see you and what you are doing-market makers that is!
five the only way is to be a remora(sucker fish that gets a free ride) follow what GS (goldman sachs is doing)is interested in.

six there are very few daytraders compared to institutional buyer sellers-your amount is a pittance in volume you will not find it easy to hide what you are doing.
seven it is a PONZI scheme-greater fool theory applies=nothing more or less, the big fish need a meal and your 10k is a scrap of food to them, a meal necessary though to grease the wheel.
learn all this and you will be better off, wise and its a lot of fun!:cool:
 
chugani, what you need to do is the following:

1) Watch the market - ES, NQ, YM, CL and eventually, you will see a behavioural pattern (support, resistance, breakouts, etc) througout the day.

2) Manage your money well. Do not get greedy and do not overleverage. Never be too sure about a trade, always think "if the market turns against me unexpectedly, will I be fucked by the huge number of positions I put on?". If the answer is "yes", cut back on the size.

3) Stop trying to find that perfect indicator or whatever else you think make people successful. It's all in your head.

A lot of people without any edges but are profitable use that thing between their ears called brain. It's all up in your head. Most people lose because their overriding need to be right is far greater than their need to make money (although they may not know this).

I started out much like you, daunted by the million different indicators and getting all depressed when the market turns and non of the indicators worked.

Quote from c.chugani:

I might be wrong with the following reasoning but,

couldn't a good stategy / edge / indicator turn out to have a negative expectancy in the long run due to poor risk management caused by the trader who trades such a strategy?

Ie. if the strategy is like a good Volvo, but the trader is like a bad driver, the chances of crashing the car are still high - even though the car is technically very safe..

Some people swear by highly accurate indicators / edges for long term profitablity.

Others develop mediocre technicals, but are excellent on managing their risk - so they still remain profitable in the long run.

Which of the two approaches is more appropriate for a beginner trader?
More...
 
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