Moral support and confirmation needed about starting trading for a living

[jaronimo]

Quote from tsmithyAussie:


Have read over 2000 pages of books and like Dr Alexander Elders aproach trading for a living, even went part time to do all this study before retreating back to full time. I understand money management and psychology are more important than stock selection.

2000 pages? Whats that, 5 to 8 books? I read that many trading books in a good month. Keep reading, keep learning.

Trade very small until you are consistently profitable. Why risk $1,000 on a trade when you can risk $10? Remember you are still in the learning stages and losing more money won't teach you faster. It will just make you broke quicker.

 

[tsmithyAussie]

Thanks for all replies guys and interssting advice, starting small is one key facts that comes across from all the advice, i still think using money will make me learn faster than a demo becuase thats the only way i will stretch my emotional capacity and feel what I need to learn and document these feelings in a diary. I think very simple technical analysis is all thats needed to find stocks and metastock has a nice search using the robert deal momentum filter. I found if I track these stocks for a few weeks that they fall into a state of low momentum within the up trend and thats the time to a set a buy price near the EMA.

I plan to be meticulus on record keeping at stick to the 2% rule. The risk management side of things is something I am pretty well read about and feel I can handle theoretically allthough there will be some balls ups.

I have made a list of rules that can never be broken and will just have to see if I can stick to them, no matter what or how bad it feels emotionally to execute them.

The though of intra day trading seems totally impossible and stressfull at this point, I have trouble thinking weekly never mind daily. I guess that may change once I have experience.

Can any give an example of how they managed to control their emotions after maybe starting off full of greed and fear. When did u make a change and get a handle on them. Was it a sudden logical thing based on rules or a gradually learnt process?

It seems from the few books I have read its the emotional control that separates success fom failure. Thats the part that scares me most.

What is wrong with Metastock by the way?

Not going to go part time yet.

Thanks again guys.

 

[Boy Plunger]

It took me 5 years to develop my trading into a business. IQ has nothing to do with making great money trading, it helps, but not something you tell a guy wanting to start trading for himself.

You need to emulate and learn from winners and not losers. Best lesson one can give you at this time.

Get off this forum for all the wrong reasons why you are here and stay on this forum for all of the good reasons why you are here which are: new ideas about ongoing operations, help with technical issues, feedback about specific needs, and most important, finding one person who is in a position to guide and teach you different approaches. None of these will guarantee success but should help you in your process of getting in the black consistently. I hope you prove them all wrong. Good luck!

 

[Lawrence Chan]

I think it is good that you at least ask for some input.

Here is my two cents,

1. Do not trade at all, sit on the sideline and watch the pit (if there is one close by) or watch the tape (using real-time data feed) for at least a month.

2. Then watch the tape and the charts in combination maybe for another month. You do not need many fancy indicators, just the price.

When you are watching the price, stay alert and focus - and that will sure make you exhausted at the end of the trading day. Find a way to keep yourself fit and healthy!

If you start to get a feel how turning points are formed after that - you've learned some basic tape reading.

That will properly pay off for the rest of your trading career because it will save your behind time after time

No books, nor lectures, or anything else, can replace actually living through price movements.

 

[chewbacca]

Quote from tsmithyAussie:

Guys, my 1st post ever on this forum. Hope its in the right place. If its not please let me know and I will repost.

I want to go part time/quit in my sole destroying call centre bank job and trade for a living. Have saved over $150000 US and plan to start using V small trades of $3000 US or less and buy 5 or 6 stocks max at any one time..dont expect to make much for the 1st year, would be happy to break even and will use $30000 or so as total capital unless my mental maturity for risk allows me to use more. Will be trading on ASX.

Have read over 2000 pages of books and like Dr Alexander Elders aproach trading for a living, even went part time to do all this study before retreating back to full time. I understand money management and psychology are more important than stock selection.

I use metastock and end of day prices and tech analysis.

Problem is I am totally isolated over here in Australia and have no one to talk too. The books all make it sound possible but is my dream realistic? I am aware traing is harder than being a surgeon or airline pilot.

I have a trouble believing in myself and need a push. I have no one to talk to who can understand my position and ambition.

Am I being realistic or a dreamer?

You're a dreamer. So was I when I first started - and maybe I still am. Don't even think about daytrading - the commisions/fees alone will kill you. The way I'm trading now I'd have to make like 25-30k a year just to breakeven because of the commisions/fees. You have a bigger edge in swing trading because your profit potential is greater while your risk and commision costs remain low. You have even a greater edge as much longer-term trader/investor which is now my goal.
Well whatever decision you make and whatever style of trading you choose - you have to be comfortable with it - because if you find yourself getting stressed out, nervous, fearful, revenge trading, doubtful or whatever, then your toast. You have to trade comfortably, confidently, and without any ideas or biases in your head.
Know that you will lose all your money at first - so I wouldn't start with 30k..which seems to be 20% of your life savings. Because the more you lose, the more you trade, and the bigger you trade just to breakeven, only to lose even more....then trading becomes even more soul-destroying than the job you just left...but now you just can't quit because you've lost too much in terms of money and opportunity cost (salary lost). And I'm not trying to warn you or make it sound difficult, its just the natural tendency of humans and even societies to make simple things as difficult as possible.

 

[DancesWIL]

Hello TsmithyAussie,

Sounds like you are in a good situation to test the waters without too much risk. Since your strategy allows you to make decisions after the market closes why not practice for a time while still holding your day job? That's the way I did it. Now I trade full time. It did take me years to really get going, and it probably does for most. So, patience, learn your way while not burning your hard saved trading capital on living expenses. I would bet that just the idea of an escape plan would give you that soul saving freedom feeling. Best of luck.