Money management. Gotta start somewhere. So far I've identified these guidelines,
- 1:1 or better 1:2 risk/reward
- 3 failures - done for the day
Also, what do you mean by "cutting costs"? Can't really cut the broker's fees. What else?
What helped you the most when you just started?
- Thread starter Alfing
- Start date
Money management. Gotta start somewhere. So far I've identified these guidelines,
Also, what do you mean by "cutting costs"? Can't really cut the broker's fees. What else?
Cool! Searching google and this site has not brought meaningful results. Is there a place where it is discussed?
You already hang out with some of them - look on profile pages of those who reply on your thread, look on the answers, years they are here and figure out who is who. I've seen once something about ET by invitation, not sure if it exists, in any way I wasn't invited yet. You can also PT (Private thread on your profile page or his/her) to somebody you would like to hang out - chat more.
I dont' know of Brooks or Volman, never read their stuff... but I support the value of "(certain) indicators properly understood and used".
Well, I tend not to even look at the reward side of the equation. All it is for me is a trade setup, and a position size determined by my stop. The reward side is pretty mechanical for me where I'm just reacting to the chart...sometimes disappointing, sometimes runaway success.
Broker fees are actually the biggest of the cost cutting, but also not paying the spread, taking rebates, waiting for price to come to you...these are all related too. For example, going long an option contact with a bid x ask of .25-.30, if I rest on the bid and get hit, my position can be 18% larger vs the ask with no change in risk (actually diminished risk for a partial lots), and getting the rebate makes cost basis nearly .01 better. That translates to a 20% larger gain if it's a winner with effectively no change to risk.
The basic grandularity of market structure are points and durations in between those points. These points identify extremes. Points not on an extreme are within a duration from the extremes.
The market structure is fractal in nature. Fractals are loosely coupled to timescales. These points manifest in the fastest fractal as a price bar and an accompanying volume bar on any timescale. All bars have OHLCV as points.
When they are monitored in-parallel, real-time and combined with a second price bar and associated volume, it creates a pairing of price bars, otherwise know as a price case.
Price cases encapsulates all possible price moves between two bars. It’s the alphabet by which to learn the language of the market on a granular level. Price migrates and moves through a sequence of events if one expands their orientation of price movement from vertical to horizontal orientation.
By building one’s facility of using a horizontal orientation to annotate one’s chart with tapes, tapes that build traverses, traverses that build channels then one has the foundation by which to ‘see’ the market.
What you are describing ‘impulse and corrective moves’ are subjective interpretations based on (as you apply them) an arbitrarily changing rule set. This in and of itself is normal, however your charts contain only half of available market data in a market where accurate volume information is not available.
Not only is it like trying to take a road trip with no way of monitoring gas usage, it’s also like attempting to swing at a pitched fast ball with one eye. You see the ball, but have no way to understand the depth of field, acceleration, de acceleration, velocity, dwell, etc., nor make use of any of it.
Imho, any insight of the above requires rigorous study of market structure and dynamics accomplished through personal Due Diligence through deduction and ‘thinking’.
There are 32 types of traders whom have their needs met by the market (taxonomy by L.Harris).
The most common is the classification of ‘futile traders’. This classification identifies traders whom the very act of trading is a losing activity and endeavor. This group of traders are more attached to their pre-existing beliefs and inaccurate perceptions than doing the necessary work to transform them.
The needs being met of a futile trader is primarily based in experiencing negative emotions.
If I was starting out, I would not listen to anything I read on ET. Seriously.
This doesn't mean there aren't very successful people here, but what they do will probably have no bearing on what you are capable of because of your understanding, or lack there of, or deep rooted issues which will surface very quickly when trading real money.
Honestly, you will learn more by putting on a trade yourself and then looking at where you exited and why, than you will from trying to figure out what anyone else is doing.
If you must try and learn by reading stuff on here, only listen to someone who is showing how they trade, meaning you not only read why they put on a trade, but you see the trades they put on and continue to do so. In the replies thus far, you already have a mix of losers who can talk, but just talk and don't trade, and traders who I believe are doing well, living off their trading, and don't nothing else. By the time you figure out who is full of shit, you could have more than likely figured out a way to trade that works for you.
I say none. Reading books or trading related materials on internet only help newbies to build up basic knowledge about trading, nothing else. Ultimately, what helps you the most depends on how much passion you have with trading and what kind of commitments you have to get you there while majority fails. You will struggle a lot and keep repeating mistakes over and over again to the point where you will realize how important it is to apply discipline and risk management techniques to your trading strategies... It's a long, painful and lonely road that profitable traders must undergo for years, unless you are lucky to have a successful trader who can mentor you side-by-side for free, which such luck NEVER happened to me
Well said, very well said. In other words, "take everything with a grain of salt" and "show me the money".
I say none. Reading books or trading related materials on internet only help newbies to build up basic knowledge about trading, nothing else. Ultimately, what helps you the most depends on how much passion you have with trading and what kind of commitments you have to get you there while majority fails. You will struggle a lot and keep repeating mistakes over and over again to the point where you will realize how important it is to apply discipline and risk management techniques to your trading strategies... It's a long, painful and lonely road that profitable traders must undergo for years, unless you are lucky to have a successful trader who can mentor you side-by-side for free, which such luck NEVER happened to me
I keep hearing about those "successful traders" but looks like no one has seen them for a long time, if ever. ;-)