Recommendations for a day/swing trading noob?

Quote from spacebass5000:

I've conducted a decent search though the forums looking for the same advice I am asking for and haven't really come up with much. Upon joining ET, I had at least figured there would be some stickies that dealt with what I am about to ask. Regardless, I shall ask my questions anyway. Flame at will... :o

I am getting into day/swing trading. I am a year into an MBA curriculum and have THOROUGHLY enjoyed every class that has even remotely been related to finance. However, I fully understand a trader this does not make!

My undergrad background is Computer Science/Engineering.

I am currently reading
"A Beginner's Guide to Day Trading Online" by Toni Turner and plan on following it up with the list of books she recommends. Most are centered around technical analysis. I am also interested in reading "High Probability ETF Trading" by Connors, Alvarez, and Penn.

Regardless, what would you tell a complete trading newb to do if you could do it all over again?
More...

First off, buy a copy of Reminiscences of a Stock Operator and read it fully. Most of the guiding principles and axioms of trading are referenced in there.

Second, read the AHG thread by Anekdoten and the Day Trading 2.0 thread by jjrvat. By no means do these threads give you profitable turn-key strategies but you'll get an education on the basics of price movement.

Third, get yourself some charting software (preferably with a simulator mode, Ninjatrader is good), a data feed, and be prepared to invest at least two years of pretty much round-the-clock study, watching the market live, testing out ideas on sim, and collecting tidbits on the Web that might help point you in the right direction.

There's lots of crap on ET but also masses and masses of useful info. As a start I'd review the library of posts by Anekdoten, austinp, Stealth Trader, and SusannaDT. Use the search by username feature. Beware of the Jack Hershey threads.

You may or may not find most books useful, but one useful reference is Trading Chart Patterns Like The Pros by Suri Duddella.

Good luck...
 
Quote from spacebass5000:

Regardless, what would you tell a complete trading newb to do if you could do it all over again?
More...

http://www.elitetrader.com/vb/showthread.php?s=&threadid=166195&perpage=6&pagenumber=1

Get rid of the concept of "right" and "wrong" about a trade, about yourself, and about what price and the market "should" do. When you put on a trade, you expect it to go a certain way based on any of a variety of factors. Be sure you know in advance the exact price at which the chances of the trade moving your way become less than positive.

Be sure you know in advance the position size that allows you to exit immediately at this price with an acceptable loss.

As a beginner, be sure you put in a hard stop at this price as soon as your position is on.

Beginner or not, be sure you put in a disaster stop at price that will preserve your account in the unlikely but possible event you lose access to your trading platform, or step away for just a moment and sudden news moves the price (MTXX at 11:14 a.m. on 6/16 loses about 60% before being halted).

Trading is speculating, and you NEVER know what will happen once you jump on the train. The train may continue all the way to your target destination non-stop, it may get there with some delays along the way, it might break down halfway there and you'll have to change trains...or it might derail and fall off a cliff.

The train that derailed and fell off a cliff very likely made thousands of safe, predictable trips before that derailment. Taking that train is the safest thing in the world.

Till it derails.

Especially as a swing trader, do you know how to limit damage to yourself during a derailment? What if you were long SQNM on 4/29 because after falling 50% the previous month it stabilized, and found solid support around 14.00? What do you do the morning of April 30th? Was your position size such that a huge gap against you would still preserve your trading account?

What if you were short GMCR on 4/29 because it pulled back sharply from a new 52-week high and its P/E ratio was "ridiculous". Oh, you didn't realize they were reporting earnings after the close and had a 40% short interest? What is your disaster plan for the morning of 4/30? Do you get out pre-market, put in a stop before the open, or wait 5 minutes before taking action (5 minutes in this short squeeze was about another 25% loss).

If you hopped on a train and had an almost guaranteed way to safely exit the train in the event it derailed and fell off a cliff, would you take advantage of it? Plan your trades and trade your plans

Once you've put in enough screen time to find even a small edge in your favor, and your profit targets exceed your stop losses, and you exercise TOTAL discipline on EVERY trade, you will have gains. Geez' journal demonstrates a track record of more losses than wins, yet his account is up almost 40% year-to-date: http://www.elitetrader.com/vb/showthread.php?s=&postid=2474255#post2474255

Here's the "complete newb" journal of my first year: http://www.elitetrader.com/vb/showthread.php?s=&threadid=132626&perpage=6&pagenumber=1

See first-hand how an "edge" combined with poor risk management wipes out weeks/months of hard work!

Then: Don't do that. :D


Good books:

The Market Maker's Edge - Josh Lukeman (the opening chapters on position size and risk management are priceless)

Tools & Tactics of the Master Day Trader - Oliver Velez

The Disciplined Trader - Mark Douglas (If you don't give this one your full attention, you won't get it.)

The Master Swing Trader - Alan Farley (Without several months of screen time and technical knowledge it might seem to be written in Klingon.)
 
Quote from Specterx:

First off, buy a copy of Reminiscences of a Stock Operator and read it fully. Most of the guiding principles and axioms of trading are referenced in there.

Second, read the AHG thread by Anekdoten and the Day Trading 2.0 thread by jjrvat. By no means do these threads give you profitable turn-key strategies but you'll get an education on the basics of price movement.

Third, get yourself some charting software (preferably with a simulator mode, Ninjatrader is good), a data feed, and be prepared to invest at least two years of pretty much round-the-clock study, watching the market live, testing out ideas on sim, and collecting tidbits on the Web that might help point you in the right direction.

There's lots of crap on ET but also masses and masses of useful info. As a start I'd review the library of posts by Anekdoten, austinp, Stealth Trader, and SusannaDT. Use the search by username feature. Beware of the Jack Hershey threads.

You may or may not find most books useful, but one useful reference is Trading Chart Patterns Like The Pros by Suri Duddella.

Good luck...
More...

Spacebass:

In your situation and orientation, I strongly agree with the above post regarding me.

The PA stuff he recommends is definitely a dead end however. Read E. Tufte to find out why. Start with "Envisioning Information" and "The Visual Display of Quantitaive Information."

The markets are a written language; reading them requires a differentiated mind. Toni and Ollie don't know that and neither do you.

A language does not operate on rules. Problem solving is done with rules and the market is NOT a problem. The market is always right and an expert trader partners with the market and listens to always be in the market and on the right side of the market.
 
Quote from jack hershey:

Problem solving is done with rules and the market is NOT a problem. The market is always right and an expert trader partners with the market and listens to always be in the market and on the right side of the market.
More...

Spot on, my warm weather friend. Trading creates an environment which, when Mom says to you, "I don't care what everyone else is doing! If everyone else jumped off a cliff, would you jump off, too?", the correct answer is, "Yes."
 
http://www.trading-naked.com/Articles_and_Reprints.htm trading is more of a sport than a business. Learn how to draw trendlines, these are the bases that willl be touched if it were baseball. Paper trade for a year or more,easier to lose fake money. Once you have found an edge( a pattern that you see that is repetitively predictable) start to trade 1 lots and learn your emotional trading lessons. As you become more confused and more curious refer to the address above for answers to your questions
 
Quote from jack hershey:

Spacebass:

In your situation and orientation, I strongly agree with the above post regarding me.

The PA stuff he recommends is definitely a dead end however. Read E. Tufte to find out why. Start with "Envisioning Information" and "The Visual Display of Quantitaive Information."

The markets are a written language; reading them requires a differentiated mind. Toni and Ollie don't know that and neither do you.

A language does not operate on rules. Problem solving is done with rules and the market is NOT a problem. The market is always right and an expert trader partners with the market and listens to always be in the market and on the right side of the market.
More...

If the market´s language does not operate on rules and does not follow from induction, how does it operate? It surely is not based on deduction alone, since a trader deducting from false premisses what the market is doing will lose money. So how does one learn to speak the market´s language, if neither inductive nor deductive reasoning are entirely forthcoming?
 
Quote from FerdinandAlx:

If the market´s language does not operate on rules and does not follow from induction, how does it operate? It surely is not based on deduction alone, since a trader deducting from false premises what the market is doing will lose money. So how does one learn to speak the market´s language, if neither inductive nor deductive reasoning are entirely forthcoming?
More...

If the function, the purpose, of language is simply to make noise, then it need not have rules. If however the purpose of language is to communicate effectively, then it must have rules. If it does not, then the end result is frequently gibberish. The reality then is that language does have rules and thus to say that it doesn't, is an example of a false deductive premise.

Thus I find myself in substantial agreement with what FerdinandAlx has said. One may wish to redefine terms, construct different premises, ..., but as it stands, Jack's argument is less than convincing.

How does one construct an ATS without employing some collection of rules and logic? Again there may be definitional aspects to this but it would seem to me that a logical flow is critical to the 'proper functioning' of a computer program.

Again, one may wish to redefine terms, which is fine and dandy as long as one does not drift into the postmodern tar pit in which fine and dandy come to mean whatever I wish them to mean simply because as a sentient being I have the capability to do so.

lj
 
You must log in or register to reply here.
Back
Top