Successful Trading - Advice and Guidance

D

downrivertrader

Have you ever wondered how they did it? I mean...you can read Market Wizards but some of these stories seem surreal and out of reach for most. I am talking about us average traders. How did they manage to begin trading and finally achieve the coveted status of full time trader?

Success seems to be out of reach for many new traders. Let's dedicate a thread to helping each other achieve success as traders....... Let's be respectful and understand that success has different meaning to all. The following pages can be filled with personal stories of success, discussions on markets traded, methodologies, sharing your wealth, quotes, books, good old fashion advice or anything that might help others understand how to imporve themselves and their abilities as traders.

I want this thread to be different and out of the box. Feel free to discuss how much money you make or lose, how many contracts/shares you trade, how long it took to get to where you are, what you learned along the way. As long as it is in this thread, it will not be considered bragging. Only helping your fellow man (or woman).

Let's make this a quality collection of advice and reference.

DRT
 
I don't wonder about how other big hitters made their pile. I'm only interested in my agenda. In reality, how much money is being made and what position sizes/tactics are being deployed are not revealed by any very rich professional players. And not only that, they prefer privacy.

I don't disclose details for trading. Important fundamentals and principles I do opine upon to point to how a market should be approached and understood in order to fully utilize it as a cornucopia to make your fortune.

However noobs and all or most others are not going to adopt the aims and the approach which demand so much from an individual if he is to make his fortune. Many are not even suited to play in the market aside from never mastering a full understanding of it. In attempting this task they are also among the least able to recognize that they are not suitable to be players.

If you said, could you be shown how and be trained to be an effective trader, then, yes, some could be. But even then, make no mistake, you did not create the successful master plan yourself to make your own fortune.
:)
 
I was first introduced to trading after hearing a radio show with some guy trying to convince listeners to send $5000 to a broker who would buy Euros on something called Forex. I had no clue what this was but it sounded fascinating. I decided that it was a big rip off and changed the channel. I think the EurUSD was trading at .9800 or so back then. Guess I should have sent my money to him.

I could not get this idea of trading currencies out of my mind. Like everything I do, I dove in and started leaning everythig I could. About 30 days later, I got a windfall of $15,000. Knowing that I was an expert and a savy investor, I sent my money to a broker, signed up for a signal service in Thailand, got my laptop configured, slept on the couch downstairs and waited for the signals to be sent to my cell phone. Yes sir, I was smarter than the average bear. I remember I was trading 4 lots at a time. Seemed like nothing at the time. I think it took me two weeks to lose $14,200. Back to the drawing board.

In hindsight I was such an idiot. I can not believe I would do something like that. I have a college education after all. Yeah, I read about all the people who would do something like this, but not me. It's really funny now, but I wish I would have listened. The one thing that I have is determination and persistence. More on this later.

Looking back, it was just part of the learning process but it did not have to happen this way.

DRT
 
I'm a 4 year newbie and I did lose money my first month of real trading but since then I've done ok. Certainly well enough for the relatives to start calling and asking for money again. My journey was harder than necessary because noone told me the following.

1. Do your research BEFORE trying to trade. No clue? Get a system with a out-of-sample track record in the market you want to trade. Understand it. Figure out it's strengths and weaknesses. After you understand it come up with a change and test it to see if your understanding is all wet or you truly are getting somewhere.

2. Papertrade before putting real money on the line. Although emotions, and market conditions won't be the same, you'll figure out if your idea has some merit. It'll also improve your confidence and understanding of what you're doing. Others may say this is a waste of time but if you can't make paper profits...you have no chance at making real profits.

3. Reduce emotional inputs while trading real money. I put tape over the screen where my P/L is displayed so I don't focus on it. I minimize my charts so I don't start trying to improve on my systems. Turn off CNBC. You'll be bombarded with opinions that'll have you second guessing all day long.

The result... I have few inputs to elevate my stress while trading. All I can do is follow my systems and check the results later.

4. Don't post some detail on your method/idea/system on ET and ask for input. If it's any good you'll be hounded for years by people that not only want to emulate your success, but duplicate it also. It's better to work in solitude and let everyone find their own path.

5. Concentrate on the process of profitability...not the result. Results are the output of working the process.
Know yourself and what you need to get the job done for yourself. For ex. if you need 70%+ winning trades to be comfortable, concentrate on understanding oscillators. Approx. 70% of the time they'll put you on the right side of the market. Know yourself and what you need to get the job done for yourself.

6. Ignore negative inputs and don't ask others for opinions. Nothing can be achieved if all you do is get negative opinions from others. If you must ask for advice, ask others questions that are relevant to your journey and weed out the opinions from the facts.

Of course I could be full of it so do your own research and come up with your own conclusions.
 
I saw a thread titled "Desperation". I felt sad for the poster. His post is what inspired me to start this thread. This is copy of my response...

The link to the thread is http://elitetrader.com/vb/showthread.php?s=&postid=1168752#post1168752

DRT
***************************************************

If I was in front of the original poster of this thread, Happy Go Lucky, I would slap him. But since I am not, I will try to help you with some written advice.

I have posted this chart on these forums from time to time. I am not trying to brag with this chart....only trying to prove a point. I began trading in 2002. This chart only reflects my time with Tradestation which began in July of 2003. You will notice that it took me about 700 - 800 trades to show any profit. Then it clicked and I can now call myself a full time trader with plenty of USD's to make me feel good. I also have a couple longer term accounts at IB for my retirement funds that I have done extremely well in that I am not counting.

I worked for a major corporation and fell in love with trading in 2002. I did okay in the corporate world. I made around $240,000 a year at my job. I was in sales so it was not always consistent. But none the less, I did okay. I do not work for corporate america anymore and I have made over $200,000 in one week on several occassions.

How did I do this? It was simple. It's not about any edge or indicator or mentor. Wash this from your mind. Believe in yourself and your God given talents. Search very hard within yourself to understand what you really want in life and what is important to you. Go buy two books (I think they are both around $7.95). Napoleon Hill's "Think and Grow Rich" and also Maxwell Maltz, "Psycho-Cybernetics". You don't need these books really, but they re-inforce the age old principles that make a man successful. Commit to understanding and developing these principles and apply them to your own situation. If you do not believe in them, or if you try to complicate them, then you will not be succesful. The principles include...but are not limited to:


  • Definiteness of Purpose
  • Persistance
  • Self-Image
  • Faith
  • Creative Imagination
  • Auto-suggestion to the subconscious mind (extremely important)
These principles are behind every great man. They will guide you.

Take your trading methodolgy to a new level. Start with a blank chart. Do not, I repeat, Do NOt rely on any ridiculous indicators or colored sqiggly lines. These will bankrupt you. Devote yourself to a study of value. Remember, you are a trader. Traders buy and sell value. Your job is to buy at proper values so you can sell for a profit (and vice versa). Commit to identifying what a good value is, not when a stupid average crosses or and ADX is low. I would also suggest you make your trading decisions on no less than an hourly chart. Use old fashion things like trendlines and price channels. You will be a winner.

My friend, you need to work on you. Trading is easy and natural and should be very rewarding as a profession. Believe in yourself. Commit here and now to becoming successful and let nothing stop you. Trading is all about you and nothing else. If you have kids, do it for them. If you want to be a philanthropist, do it for charity. Success will follow for you, if you belive in yourself.

Good luck and God Bless.
 

Attachments

Stop Loss Banter


In general, I do not believe in hard, specific stop points to control loss. Otherwise known as a stop loss. Rather, I like to think in terms of the violation of a certain area that I determine critical. Chances are our thoughts on stop loss areas are the same as other currency traders. How many times have you seen dealers run stops? It is part of the business. Give yourself a little wiggle room. Wait for confirmation of the area to actually be violated. After all, are we that good that we can determine exactly where we need to place an stop loss order?

I like to think in terms of risking a percentage of my equity on each trade. This will be different for everyone so spend some time thinking about this. Will it be 2%, 3%, 5% or 10% of your equity? I can't help you here but I will say that most of the stuff in print is hogwash. Give yourself a little room and trust your instincts.

Here is something that might help....if you are a golfer than it will mean more. When you try to line up a longer putt, imagine a large circle around that tiny cup as your target area so you can tap the next one in. Aim for the target area and it just might go in the hole!

DRT
 
My trading career really took off when I stopped trying to learn more and more about the markets and started trying to learn more and more about myself. Do you really know why you like to trade? Is it the money? Nothing wrong with this in my opinion. In fact, if it is anything else I would question whether you will succeed. It’s important to know yourself and what you will do with the money. Work on improving yourself and your trading will improve.

DRT
 
The first time I went live in the market {it was GE I think...} It took me a whole 14 minutes to lose the $20 I had as my stop loss for the day... something like 5 trades.

Now that was fun!

That was just two short years ago... or less.

In that time I traded the CME, NASDAQ, LSE, NYSE and AMEX. I´ve moved over 1MM shares in one day, made 900 of profits in 1 day, made 400 trades in one day... I also loss 700$ in one day, had to go back to basics several times, got knocked out several times, got back up everytime. My net numbers are on the green, and getting greener everyday...


Today Im still struggling to acomplish new goals, for me the greatest challenge is consistency...

It´s all a process I guess... I have plenty of growing left to do... but I´ve realized a couple of things about the markets.


knowing how to handle things when everything is going the wrong way, is worth a lot more than being able to pick winning trades... Any idiot can buy 50,000 shares and sell em back in a bull market, it takes a trader to get rid of a huge position while minimizing losses.

When watching the market dont ask yourself, why is something happening. Just try to realize what´s happening, and go with the flow. Dont think about it too much... just feel it and do it.

You gotta find your own edge... is not the edge that´s important, but the process of findind the edge, where you learn how to create it... you need to be creative inside the market, that´s the beauty of the markets you´re allowed all the freedom and creativity you want... don´t go throwing it out the window trying to get someone to do the work for you... if you can´t be original, you´ll always be a follower, you´ll never be a leader, you´ll always be one step behind the competition.
 
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