Why would a beginner need a large account?

[Laissez Faire]

This is absolutely the best piece of advice and insight I’ve read on this and other forums.

People have no idea what they’re getting into.

I know I didn't. And it took me way too long to realize both that and how 99 % of posters and gurus on ET just ain't profitable, yet they love to "teach" and preach. Same thing with 99 % of educators and vendors elsewhere.

Now, I'm not saying it can't be done. It just requires an incredible amount of effort way beyond what most think when they're first starting out.

We all got to start somewhere =) I am willing to learn. May it take months or years. If you can guide me please do so but theres no point telling me to let it go on a trader platform =)

How many years are you prepared for it to take?

My advice to let it go isn't meant to be discouraging or negative, but actually helpful. If you choose to continue, please remember this post a few years down the line.

I can give you some general principles and guidelines if you're still interested.

1) Assume that most people here and elsewhere don't know sufficiently what they're talking about and preaching and that they're most likely net losers, but have some kind of strange fetish where they get off by acting like gurus or advice givers. There's a lot of sick people on the internet, so you never know why. Some may have been successful in the past. I suspect many are retirees who are gambling away their pension in the markets as hobbyists.

2) Building on the prior point you absolutely need to make sure that you back-test/back-check historical prices/relationships in order to learn the market as it is. Not how someone else claim it to be. Most stuff you'll find in books or here is just cherry picked stuff that may or may not work. The only way to know what works (and to build trust in it) and what doesn't work is to test, test, test and make notes/statistics.

3) The shorter your time frame and the higher your leverage the more difficult it is to succeed. I think your best bet is swing trading with lower leverage or investing. The returns may be potentially lower, but your chance of success is way higher. Also, you don't need to stay glued to the screens all day long.

There could be some people who are worth following and learning from. Just do your due diligence, don't trust anything blindly and generally be skeptical. I think for example Kristjan Kullamägi is the real deal. He's a swing trader mostly trading stocks. I never studied his stuff, but he seems like the real deal and actually teaches stuff for free as he's made his money in the markets and doesn't need to be an educator selling courses for income.

 

[pozexis]

I know I didn't. And it took me way too long to realize both that and how 99 % of posters and gurus on ET just ain't profitable, yet they love to "teach" and preach. Same thing with 99 % of educators and vendors elsewhere.

Now, I'm not saying it can't be done. It just requires an incredible amount of effort way beyond what most think when they're first starting out.



How many years are you prepared for it to take?

My advice to let it go isn't meant to be discouraging or negative, but actually helpful. If you choose to continue, please remember this post a few years down the line.

I can give you some general principles and guidelines if you're still interested.

1) Assume that most people here and elsewhere don't know sufficiently what they're talking about and preaching and that they're most likely net losers, but have some kind of strange fetish where they get off by acting like gurus or advice givers. There's a lot of sick people on the internet, so you never know why. Some may have been successful in the past. I suspect many are retirees who are gambling away their pension in the markets as hobbyists.

2) Building on the prior point you absolutely need to make sure that you back-test/back-check historical prices/relationships in order to learn the market as it is. Not how someone else claim it to be. Most stuff you'll find in books or here is just cherry picked stuff that may or may not work. The only way to know what works (and to build trust in it) and what doesn't work is to test, test, test and make notes/statistics.

3) The shorter your time frame and the higher your leverage the more difficult it is to succeed. I think your best bet is swing trading with lower leverage or investing. The returns may be potentially lower, but your chance of success is way higher. Also, you don't need to stay glued to the screens all day long.

There could be some people who are worth following and learning from. Just do your due diligence, don't trust anything blindly and generally be skeptical. I think for example Kristjan Kullamägi is the real deal. He's a swing trader mostly trading stocks. I never studied his stuff, but he seems like the real deal and actually teaches stuff for free as he's made his money in the markets and doesn't need to be an educator selling courses for income.

Thank you so much for this dude, really appreciated. One thing I didnt mention before. I am in no way looking into this to, you know " get rich overnight". I have some capital I can blow without affecting my life at all. It is going to be like a hobby for me. I am looking for a passive income if all goes well and thats it. I am looking for materials, videos, etc.. to get started but I wont consider this as "gambling" if you will. Just learning the ropes and checking if I have enough capital to get started. One serious question though if you guys can give me a hand with. I have been checking out these regulated and unregulated brokers and it seem, I guess since they are not regulated, unregulated brokers offers bonusses, higher leverages etc.. but I am assuming it is risky to trade with them?

 

[Laissez Faire]

Thank you so much for this dude, really appreciated. One thing I didnt mention before. I am in no way looking into this to, you know " get rich overnight". I have some capital I can blow without affecting my life at all. It is going to be like a hobby for me. I am looking for a passive income if all goes well and thats it. I am looking for materials, videos, etc.. to get started but I wont consider this as "gambling" if you will. Just learning the ropes and checking if I have enough capital to get started. One serious question though if you guys can give me a hand with. I have been checking out these regulated and unregulated brokers and it seem, I guess since they are not regulated, unregulated brokers offers bonusses, higher leverages etc.. but I am assuming it is risky to trade with them?

Actually, I forgot another point.

4) Don't put any capital at risk until you're successful in demo. There's a time to start live trading, but for most people one should trade realistically in the simulator (with minimum size and realistic stops/targets) and only go live after showing oneself successful doing so. This will likely take you a long time.

I blew a lot of money myself way too early simply by not doing this and trading live way before I was ready.

Another thing to consider is that if you do choose to pursue this path there's an alternative cost of your time. Maybe you spend 10 years and thousands of hours to become a profitable trader and can start making good money after 10 years. However, along those 10 years you likely invested a lot of money to learn trading and probably blew a few accounts along the way. Finally, there's the time you spent learning it.

As an alternative, you could have spent that time working, learning another skill, saving money and investing it.

$2K is generally way too low to get started with trading, but it's fine for investing. Keeping point 4) in mind you shouldn't get started with trading now anyway.

I don't know anything about unregulated brokers. Doesn't sound like something worth pursuing to me.

 

[pozexis]

Actually, I forgot another point.

4) Don't put any capital at risk until you're successful in demo. There's a time to start live trading, but for most people one should trade realistically in the simulator (with minimum size and realistic stops/targets) and only go live after showing oneself successful doing so. This will likely take you a long time.

I blew a lot of money myself way too early simply by not doing this and trading live way before I was ready.

Another thing to consider is that if you do choose to pursue this path there's an alternative cost of your time. Maybe you spend 10 years and thousands of hours to become a profitable trader and can start making good money after 10 years. However, along those 10 years you likely invested a lot of money to learn trading and probably blew a few accounts along the way. Finally, there's the time you spent learning it.

As an alternative, you could have spent that time working, learning another skill, saving money and investing it.

$2K is generally way too low to get started with trading, but it's fine for investing. Keeping point 4) in mind you shouldn't get started with trading now anyway.

I don't know anything about unregulated brokers. Doesn't sound like something worth pursuing to me.

thanks a bunch dude, really appreciate it. I'll look into everything you have said and look for more info on the way. cheers

 

[PPC]

I agree with @ Laissez Faire on the things he wrote.

I would only add that any new or intermediate trader should also focus on psychological edges and not just technical edges. Nobody wants to hear the word psychology, but that's the main reason why most traders lose.

I’m sure that other people will disagree with me and might argue that it’s due to poor risk control or money management, etc, yet in reality it’s all part of psychological stuff.

 

[savoir]

It takes very little capital to get into the game. $2000 is adequate to swing trade a few shares of stocks commission-free or to trade one contract of a micro e-mini using intraday margin.

Think of the $2000 as cheap tuition to learn a very valuable skill. Many people pay a lot more trying to learn the same skill. That’s by their irrational choice, of course. Lesson number one in trading is be rational at all times.

Lesson number two is focus on learning correctly. The important analog is to know when you are learning incorrectly and figure out how to get back on the correct learning path. Repeated screw ups permanently damage the mind and the possibility of learning correctly becomes remote. Examples can be observed on this site.

Being at inquiry is a good place. Making the effort to scope and bound the opportunity before you is a fine way to begin.

 

[Sekiyo]

A BIGGER ACCOUNT IS THE LAST THING A BIGINNER NEEDS.

A Beginner needs to start small
Risk meaningless amounts on 1 micro
Take at least a thousand trades for 6 to 24 months

Once the beginner shows some kind of profitability,
Then he can trade more money and size.

2 Rules ... from Larry Hite
1) If you don't bet, you can't win
2) If you lose all your chips, you can't bet.

 

[Overnight]

A Beginner needs to start small
Risk meaningless amounts on 1 micro
Take at least a thousand trades for 6 to 24 months...

Pretend you're typing the above before May 2019. What would you type then? Not much choice.

 

[Sekiyo]

Pretend you're typing the above before May 2019. What would you type then? Not much choice.

True but we have to live with our time.
Before micros … One could have traded Forex or CFDs or Cryptocurrency or fractional shares or …

Or simply Demo or a bigger tuition fee xD

 

[Laissez Faire]

Lesson number two is focus on learning correctly. The important analog is to know when you are learning incorrectly and figure out how to get back on the correct learning path. Repeated screw ups permanently damage the mind and the possibility of learning correctly becomes remote. Examples can be observed on this site.

This may very well be true, but without further guidance, I'd say the chances of a retail trader learning correctly on his own is close to zero which is why I'm comfortable discouraging newcomers from even trying.

For example, there are countless examples of people on this site studying Al Brooks or Jack Hershey, really putting down the work and believing themselves to be making progress, but when the rubber meets the road, i.e., live trading, they're just not able to make any money.

As a newbie, it's only too easy to think you're making progress when in truth you're actually not. Trading is a very marginal business and almost good enough is usually not good enough. This is in contrast to other businesses or professions where you don't need to be on top of your field to get by.

So, what would you suggest to a newcomer or even an intermediate player who may have been learning incorrectly so far?