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Spydertrader's Jack Hershey Equities Trading Journal III
- Thread starter Spydertrader
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Im going to be trading the Equities method very soon. I have read all the documents. I have two questions.
1. Even if you have read well into Journal Three, should you start out with paper/live trading using the methods discussed in the first Equities Journal(along with the updates). I know there has been a lot of progression into more advanced techniques. Essentially, do the beginner methods from Journal One, Two still hold water in that they prove profitable. I obviously want to start with the beginner methods....crawl before I walk, run.
2. For anyone who uses ESignal, in terms of the MACD requirements from the beginner equities methodology, i.e. MACD(5,13,6). Beyond that, ESignal has many other options such as a drop down box labeled Source: with High, Low, Close, Open, etc... as options. Also, there are check boxes for Simple Moving Average(Oscillator) and (Single Line). Is any of this important. Im sure it isnt major but I was just wondering what is the criteria for that. I understand we are only paying attention to the MACD histogram but I just dont want this to end up being a minor mistake in a much broader system. The default is Close and (Single Line), is this correct?
1. Even if you have read well into Journal Three, should you start out with paper/live trading using the methods discussed in the first Equities Journal(along with the updates). I know there has been a lot of progression into more advanced techniques. Essentially, do the beginner methods from Journal One, Two still hold water in that they prove profitable. I obviously want to start with the beginner methods....crawl before I walk, run.
2. For anyone who uses ESignal, in terms of the MACD requirements from the beginner equities methodology, i.e. MACD(5,13,6). Beyond that, ESignal has many other options such as a drop down box labeled Source: with High, Low, Close, Open, etc... as options. Also, there are check boxes for Simple Moving Average(Oscillator) and (Single Line). Is any of this important. Im sure it isnt major but I was just wondering what is the criteria for that. I understand we are only paying attention to the MACD histogram but I just dont want this to end up being a minor mistake in a much broader system. The default is Close and (Single Line), is this correct?
In my opinion, it is probably wiser/safer to begin by paper trading. However, I only papertraded this method for about a week while I read journal 1 and the background material. Now Im trading this method profitably for real money while reading journal 2. I can tell that what Im doing isnt exactly what they are doing now, but it still seems to work. My hope is that I will gradually end up where they are now as I read on.
IMO, trading for real money is very different than paper trading was. Ive found that getting in and out is a lot trickier with real money than I anticipated it would be. I am constantly being nagged by conflicting voices in my head on what actions to take which wasnt the case while papertrading. I guess its like comparing playing online poker with real money to playing with fake money, its just not the same thing.
My advice: If your going to paper trade, make sure to take it very seriously. My problem was that I didnt take it anywhere near as serious as I take trading for real money. Because of this, all I really learned from paper trading was that the method appears to work. If your going to trade with real money, make sure to begin small, only risking amounts that wont bother you at all to lose. If you arent successful, stop trading real money and start paper trading until you figure out what you are doing wrong.
IMO, trading for real money is very different than paper trading was. Ive found that getting in and out is a lot trickier with real money than I anticipated it would be. I am constantly being nagged by conflicting voices in my head on what actions to take which wasnt the case while papertrading. I guess its like comparing playing online poker with real money to playing with fake money, its just not the same thing.
My advice: If your going to paper trade, make sure to take it very seriously. My problem was that I didnt take it anywhere near as serious as I take trading for real money. Because of this, all I really learned from paper trading was that the method appears to work. If your going to trade with real money, make sure to begin small, only risking amounts that wont bother you at all to lose. If you arent successful, stop trading real money and start paper trading until you figure out what you are doing wrong.
Quote from LittleMac:
Im going to be trading the Equities method very soon. I have read all the documents. I have two questions.
1. Even if you have read well into Journal Three, should you start out with paper/live trading using the methods discussed in the first Equities Journal(along with the updates). I know there has been a lot of progression into more advanced techniques. Essentially, do the beginner methods from Journal One, Two still hold water in that they prove profitable. I obviously want to start with the beginner methods....crawl before I walk, run.
2. For anyone who uses ESignal, in terms of the MACD requirements from the beginner equities methodology, i.e. MACD(5,13,6). Beyond that, ESignal has many other options such as a drop down box labeled Source: with High, Low, Close, Open, etc... as options. Also, there are check boxes for Simple Moving Average(Oscillator) and (Single Line). Is any of this important. Im sure it isnt major but I was just wondering what is the criteria for that. I understand we are only paying attention to the MACD histogram but I just dont want this to end up being a minor mistake in a much broader system. The default is Close and (Single Line), is this correct?
My personal opinion is that paper trading is generally a terrible mistake. You establish patterns that will not work with real money. I think it is better to start with a smaller account, maybe 5000 to 10000 USD and be willing to lose it all as the price of tuition.
The problem I found with this method (so far the only problem), is that in order to fully trade it as espoused here, you really need to be able to exit your positions that very same day if necessary. What this means is, at least for Americans, you need a minimum of 25000 USD to be able to buy and exit in the same day. Most of the time, you will hold a position for at least a 24 hour period but having a 25000 plus account enables you to exit when you want to exit.
Obviously someone is going to reply that you can trade the method with a small 2000 USD account, and this is probably true, but wouldn't you like to be able to exit your positions the same day if necessary? Can't you think of a reason why you would like to do this?
Quote from johnpinochet:
My personal opinion is that paper trading is generally a terrible mistake. You establish patterns that will not work with real money. I think it is better to start with a smaller account, maybe 5000 to 10000 USD and be willing to lose it all as the price of tuition.
The problem I found with this method (so far the only problem), is that in order to fully trade it as espoused here, you really need to be able to exit your positions that very same day if necessary. What this means is, at least for Americans, you need a minimum of 25000 USD to be able to buy and exit in the same day. Most of the time, you will hold a position for at least a 24 hour period but having a 25000 plus account enables you to exit when you want to exit.
Obviously someone is going to reply that you can trade the method with a small 2000 USD account, and this is probably true, but wouldn't you like to be able to exit your positions the same day if necessary? Can't you think of a reason why you would like to do this?
This isn't exactly correct. You can still trade "day trade" twice in a five day period without getting stuck in the pattern day trader rules. All you need to do (for a small account) is make sure you never enter more than two positions in a single day. If you get blown out of both in the same day, then you have to wait 5 days before trading again. That may sound like a problem, but it is workable and far better than not trading at all.
And yes, I did exactly this, and it worked out fine.
I believe the actual law defines a pattern daytrader as anyone that makes 4 day trades in any 5 consecutive business day period.
OK, so there are finer details involved, and I thank you for the insight. My point still remains: Can't you think of a valid reason why you would like to exit a trade on the same day and possibly do this above the threshold? Given the fact that we are talking about 3 - 5 watch list stocks that we are ready to buy on any given day, it would seem very easy to violate the threshold.
Also, if I'm not mistaken, you can lose access to your funds for 30 to 90 days. I think mischief had direct experience with that.
Also, if I'm not mistaken, you can lose access to your funds for 30 to 90 days. I think mischief had direct experience with that.
Imho it all depends on how seriously you take papertrading.
Learning a new method, even for an experienced trader, takes time.
You want to internalize every single aspect of the method.
You want to know exactly what to do and how to react at each step of your trade.
Although papertrading cannot take away the
emotional part of trading with real money, it only makes sense to practice till you can do it blind.
When you reach the point that you don't have to think which button you have to push, what indicator you have to look at, when it becomes second nature, then and only then you are ready to go live with a small size.
If you find yourself in a trade, something happens and you don't know what to do, get the hell out of the trade and go back to papertrading till you have covered every possible outcome of a trade's method.
Good trading is not some sort of magic.
Good trading is execution of your plan with confidence.
Confidence comes only with practice, focus and long hours at your screen.
There's not shortcut.
I take my papertrading very seriously and it always served me good.
Learning a new method, even for an experienced trader, takes time.
You want to internalize every single aspect of the method.
You want to know exactly what to do and how to react at each step of your trade.
Although papertrading cannot take away the
emotional part of trading with real money, it only makes sense to practice till you can do it blind.
When you reach the point that you don't have to think which button you have to push, what indicator you have to look at, when it becomes second nature, then and only then you are ready to go live with a small size.
If you find yourself in a trade, something happens and you don't know what to do, get the hell out of the trade and go back to papertrading till you have covered every possible outcome of a trade's method.
Good trading is not some sort of magic.
Good trading is execution of your plan with confidence.
Confidence comes only with practice, focus and long hours at your screen.
There's not shortcut.
I take my papertrading very seriously and it always served me good.
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