Starting from Scratch... Literally!

[IbisCane 10]

I recently became aware of this site after coming across it during an interview with Mr. Lee. I have just decided that my career of choice would be day trading, and plan to treat it as such, not just something to do to make money. I strive to learn all that there is to know before I take the plunge of losing my first trade. I'm 19 and have the financial stability to start, but the question is where. Starting fresh is an understatement...

 

I'm not sure what to accomplish by asking the very same people I would be taking advantage of ( by that I mean of their mistakes) in the all-to-real market, but I don't know any traders personally so my options are limited. A first step would be great advice. Please understand that my proficiency is far from complete in the lingo of tradespeak.

 

Thank you,

Kyle

[jonbig04 10]

I recently became aware of this site after coming across it during an interview with Mr. Lee. I have just decided that my career of choice would be day trading, and plan to treat it as such, not just something to do to make money. I strive to learn all that there is to know before I take the plunge of losing my first trade. I'm 19 and have the financial stability to start, but the question is where. Starting fresh is an understatement...

 

I'm not sure what to accomplish by asking the very same people I would be taking advantage of ( by that I mean of their mistakes) in the all-to-real market, but I don't know any traders personally so my options are limited. A first step would be great advice. Please understand that my proficiency is far from complete in the lingo of tradespeak.

 

Thank you,

Kyle

 

 

Welcome aboard!

 

There are a lot of us young guys on here. You've definitely come to the best place to learn. I'm sure you are wading through the ocean of information available to you. I wouldn't be too concerned about the zero sum thing. Sure technically we are trying to take each other's money, but there is more than enough to go around

 

I will give you one bit of advice: Spend some time getting to know what trading is all about. Then sit down and ask yourself if you are really ready to commit the time and effort required to make it. I know that seems obvious, but if you enter the world of trading knowing its going to be a struggle, you won't be thrown for a loop when in fact it is, well, a struggle. Trading has taught be a lot, much of which has nothing to do with markets. It's taught me to persevere and to get my ass handed to me only to be thankful of the lesson I learned. I went into trading expecting to be an expert in a few months, because honestly thats how long it took me to become proficient at anything else. Of course I joined the ranks of the many that have been humbled by the market. So take some time out, decide if you really want to dedicate your life to this because I firmly believe that s what is required. If you choose to then I wish you the best of luck! There are many here who are more than willing to answer questions.

[brownsfan019 17]

Some ideas off the top of my head:

• Get some books and start reading.
  
• Do NOT purchase any expensive systems that vendors sell.
  
• Get a demo account and just start doing it. Don't pay attention to the results, just start clicking away.
  
• Start reading this forum from top-to-bottom and see what interests you.
  

I've attached a book list I put together awhile back on some good books for a trading library.

 

For demo accounts, it depends what you want to trade. I use Open ECry for futures and they have a nice demo system. There are plenty of stock demo's out there as well.

Amazon.com trading book reco's.pdf

[DbPhoenix 42]

A couple of Beginners' Forum threads that might be useful:

 

How Do You Start Trading?

 

Baby Steps

[Kiwi 16]

Thats a good list of books brownsfan but I wonder if he should start with less (buy them from time to time).

 

That post by Thalestrader the other day was an excellent one ... lets see if I can find it. Good basics to get started.

 

http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-31.html#post78242

 

Then add douglas for psych ... and others as needed.

[brownsfan019 17]

Thats a good list of books brownsfan but I wonder if he should start with less (buy them from time to time).

 

That post by Thalestrader the other day was an excellent one ... lets see if I can find it. Good basics to get started.

 

http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-31.html#post78242

 

Then add douglas for psych ... and others as needed.

 

Yeah, I wouldn't suggest buying all of them at once. That was just a list I put together awhile back and was able to find it.

[littlefish 10]

A first step would be great advice.

 

Hmm, Entertainingly after having lurked this place and others silently for quite some time. Here is where the urge to post something arises.

 

Maybe it will take root in ears that hear.

 

There's supposedly a statistic that 95% of traders lose money. Wouldn't it be sane to apply that same factor to what you hear coming out of all sources (books, mentors, youtube showmen, forum posters loved by many, etc..) who are eager to 'help' you? Meaning 95% of them either sincerely don't know their head from their hind quarters (yet teaching authoritatively) or are intentionally being deceptive con men for whatever their reasons.

[brownsfan019 17]

Hmm, Entertainingly after having lurked this place and others silently for quite some time. Here is where the urge to post something arises.

 

Maybe it will take root in ears that hear.

 

There's supposedly a statistic that 95% of traders lose money. Wouldn't it be sane to apply that same factor to what you hear coming out of all sources (books, mentors, youtube showmen, forum posters loved by many, etc..) who are eager to 'help' you? Meaning 95% of them either sincerely don't know their head from their hind quarters (yet teaching authoritatively) or are intentionally being deceptive con men for whatever their reasons.

 

I couldn't agree more.

 

You have to take what advice/suggestions you are given on anonymous message boards with a grain of salt. I've long advocated that those being put in 'guru' type positions to actually prove they can do this (and we have a thread for it right here) but my comments just get swept away.

 

So while there are some great ideas presented here and other boards, it is what it is - free info posted on anonymous message boards where nothing has to be proven. I've read more than once that there are many ways to make money at the trading business and none of them require being able to trade.

[robertm 10]

Hmm, Entertainingly after having lurked this place and others silently for quite some time. Here is where the urge to post something arises.

 

Maybe it will take root in ears that hear.

 

There's supposedly a statistic that 95% of traders lose money. Wouldn't it be sane to apply that same factor to what you hear coming out of all sources (books, mentors, youtube showmen, forum posters loved by many, etc..) who are eager to 'help' you? Meaning 95% of them either sincerely don't know their head from their hind quarters (yet teaching authoritatively) or are intentionally being deceptive con men for whatever their reasons.

 

Spot on. The best trading mentors I know do the least seminars (such as one or two a year) and are almost impossible to find beyond word of mouth & referrals. There is a reason for this - they don't need to teach to make a $$ because they actually know how to trade. If they have the knack for educating and offer their services then grab them when you get the chance.

 

You need to get your teeth into the ideas first though, so read a few books, some forum posts, play around with a demo account then a very low risk live account. After that you will have an idea what you want out of trading, how to spot the scams, and who is worth paying attention to & pursuing as a mentor :-)

 

And never ever believe a single "result" you see posted promoting somebodies trading education prowess, speak to their students, and make sure they have at least 3 years experience under that mentor, everybody loves to record "testimonials" when the market is running hot ("I made 100,000 on my first ever options trade, XYZ is a genius educator", mmmmmmmm, sure he is).

 

[Kiwi 16]

All caveats aside, the reason that X percent of people fail has more to do with them and their planning and execution processes than the method they are taught.

 

1. People don't plan and test their strategies

2. People don't execute what they planned to execute

3. The markets are a humbling machine and your brains programming is based on chasing things in the woods and digging for grubs not beating a modern electronic market - you need to overcome this.

 

People are designed to be happy and overconfident and one of the mechanisms that achieves that is distortion of past events. Hence, even when the mentor taught something valid, they are blamed when 1,2 and 3 humble the trader - who wants to be humble when they can be happier by blaming someone else?

[wjrusnak 10]

I'm a fellow young guy (23 is still young, right?) as well. I started with this site almost a year ago and I can tell you that it sent my trading from mystical to logical. Even if you don't trade exactly like the experienced traders on this site, you'll learn a ton from many of them. And believe me, I think it would be quite the coincidence that you would exchange a futures contract with the hands of anyone else on this site... there are millions of traders out there (referring to your competition statement).

 

So far you've been given some good advice, book suggestions and thread links. Already you can see you'll be flooded with information. A common theme among every method, school of thought, style, etc. is that you need to put in the screen time. Maybe allocate some time in the evening or afternoon (or even the weekends when all is silent!) for learning, reading, and reviewing and then make yourself COMPLETELY available for your screen time. You could even do nothing for a month but watch a standard bar chart of the eMini S&P, Nasdaq, DOW, Oil, etc., be it a 1 minute, 100 tick, or 1 tick chart for two, three, five, or eight hours a day. After just simply watching like this, you'll be able to relate to the concepts portrayed in any strategy. That brings me to the idea of getting to know your charts in the first place! Learn the basics.

 

Eventually, you'll want to lean toward a certain style and learn everything about it. Then test it! There are plenty of SIM trading platforms to test a strategy. AMPFutures, for one, offers a simulated trade account, NinjaTrader platform, and US Futures data for free. Some people frown upon simulation because losing money and losing play money are two different things, but it IS going to help you in the end. Maybe you'll need extra practice dealing with losses when you switch to real money, but simulating is going to help you get a grasp of the market. Point being, if you can't simulate your trading style and be profitable, you're not going to be able to make real money when you're "live".

 

Last, you need to put in the time. Start now. I know personally that I put in about two hours of trading in the morning, sometimes an extra hour before the close, then at least an hour in the evening reviewing and planning for the next day. Not to mention, I may "stop by" to just watch the market during the boring hours around lunch time and here I am posting about trading on my Sunday evening. It becomes an obsession and it probably should in order for you to really get this stuff.

 

Good luck to you in your learning process and remember not to get frustrated. It takes some of us years to survive this career and believe me, I'm not about to proclaim that my trading process was at all as smooth as what I'm suggesting you do. Many of us with good advice have traded very badly or irresponsibly at the start.

[zdo 20]

"It is a painful thing to look at your own trouble and know that you yourself and no one else has made it." ~ Sophocles, BC 496-406, Greek dramatist

[Grey1 10]

I recently became aware of this site after coming across it during an interview with Mr. Lee. I have just decided that my career of choice would be day trading, and plan to treat it as such, not just something to do to make money. I strive to learn all that there is to know before I take the plunge of losing my first trade. I'm 19 and have the financial stability to start, but the question is where. Starting fresh is an understatement...

 

I'm not sure what to accomplish by asking the very same people I would be taking advantage of ( by that I mean of their mistakes) in the all-to-real market, but I don't know any traders personally so my options are limited. A first step would be great advice. Please understand that my proficiency is far from complete in the lingo of tradespeak.

 

Thank you,

Kyle

 

I suggest you paper trade for 2 years..

 

Get yourself a piece of paper and check the following ( if you donot know the answer then you are not going to make it )

 

1) How do I reduce systematic risk intra day

2) How can I adjust pos size to reduce risk to capital

3) How can I diversify over different instruments

4) Is it enough if i Use TA ONLY to become profitable( This is a very important question and you should speak to winners of stock market to tell you the truth )

5) what style of trading is less riskier( intra day ( avoid it if you can ) , swing few days using TA or swing using FA ( I encourage you to do the last)

6) DO I need to Watch CNBC

7) what is the first step and where should I start( I give you a hint start with NO1 if you insist on day trading )

 

Think of the risk ,,, you will be eventually rewarded for excellence

 

Grey1

[brownsfan019 17]

I suggest you paper trade for 2 years..

 

Get yourself a piece of paper and check the following ( if you donot know the answer then you are not going to make it )

 

1) How do I reduce systematic risk intra day

2) How can I adjust pos size to reduce risk to capital

3) How can I diversify over different instruments

4) Is it enough if i Use TA ONLY to become profitable( This is a very important question and you should speak to winners of stock market to tell you the truth )

5) what style of trading is less riskier( intra day ( avoid it if you can ) , swing few days using TA or swing using FA ( I encourage you to do the last)

6) DO I need to Watch CNBC

7) what is the first step and where should I start( I give you a hint start with NO1 if you insist on day trading )

 

Think of the risk ,,, you will be eventually rewarded for excellence

 

Grey1

 

Grey1 - while offering your opinion is welcome here, your declarations of 'I know all' is rather old (and you haven't been here long).

 

If you want to offer your opinions, have at it. But telling someone if you don't know the answer to some of your questions you won't make it is ridiculous. I don't know the answers to all of them & here I am doing it day-in and day-out.

 

Here's what we know - there's many, many ways to trade the market. Just b/c someone doesn't agree w/ your methods does not mean that person is wrong. We did this song and dance in another thread but apparently it's not sinking in.

[Grey1 10]

Grey1 - while offering your opinion is welcome here, your declarations of 'I know all' is rather old (and you haven't been here long).

 

If you want to offer your opinions, have at it. But telling someone if you don't know the answer to some of your questions you won't make it is ridiculous. I don't know the answers to all of them & here I am doing it day-in and day-out.

 

Here's what we know - there's many, many ways to trade the market. Just b/c someone doesn't agree w/ your methods does not mean that person is wrong. We did this song and dance in another thread but apparently it's not sinking in.

 

Only GOD knows it all ,, I have expressed an opnion about the foundation of education in financial engneering which is risk analysis which you hate it,,, fair enough .. I have expressed my view on RISK first Reward Last ,,I have also expressed to encourage traders to concentrate on money flow based on FA than PURE TA.. This is some thing you are thought if you worked for a BANK , now if you donot like it then I understandand ... People say there are many ways to make $$$ from market but you forget to recognise those methodologies that are not risk based will lose in long term even though could work in short term ,,

 

Grey1

[edabreu 10]

I recently became aware of this site after coming across it during an interview with Mr. Lee. I have just decided that my career of choice would be day trading, and plan to treat it as such, not just something to do to make money. I strive to learn all that there is to know before I take the plunge of losing my first trade. I'm 19 and have the financial stability to start, but the question is where. Starting fresh is an understatement...

 

I'm not sure what to accomplish by asking the very same people I would be taking advantage of ( by that I mean of their mistakes) in the all-to-real market, but I don't know any traders personally so my options are limited. A first step would be great advice. Please understand that my proficiency is far from complete in the lingo of tradespeak.

 

Thank you,

Kyle

 

Here is my favorite scalp. It's a price pattern using range bars. Doesn't work on time based or tick charts. Only a 6/4 range bar chart pair. This will give you an idea of what you will be working towards.... your own style and approach as well as setups you have tested and established as a "works for me". Take everything here and everywhere else about trading with a test it and see attitude. No one, absolutely no one, knows what's going to work for you when it comes to trading. Give it lots of time and let it develop!

[zdo 20]

Folks, IbusCane is not replying much so

He may be gone already… Literally!

 

But just in case – this is somewhat aligned to the intrapersonal ‘partnerships’ required in trading at high levels, matching your own nature to your own style, … etc

 

[ame=http://www.youtube.com/watch?v=R9g3Q-qvtss]YouTube - Itay Talgam: Lead like the great conductors[/ame]

 

...also, most noobies should forget Steenbarger's developmental maps - NOT!

[robertm 10]

LOL he's probably nursing his headache from reading this thread :-P

 

Loved the vid.

 

Do you have a link for this at all, I don't think he makes it down this way much ;-)

- Steenbarger's developmental maps

[BrianNC 10]

Here is my favorite scalp. It's a price pattern using range bars. Doesn't work on time based or tick charts. Only a 6/4 range bar chart pair. This will give you an idea of what you will be working towards.... your own style and approach as well as setups you have tested and established as a "works for me". Take everything here and everywhere else about trading with a test it and see attitude. No one, absolutely no one, knows what's going to work for you when it comes to trading. Give it lots of time and let it develop!

 

edabreu, could you explain that a little better and elaborate on what's in the chart? Having a little problem comprehending it all with just the notes on the chart.

 

Also could you explain what you mean by a 6/4 range bar pair. Not real familiar with range charts.

[zdo 20]

Do you have a link for this at all, I don't think he makes it down this way much ;-)

- Steenbarger's developmental maps

 

Steenbarger has an archive of great articles. You can check on his site to see if they are still available. Brett Steenbarger Articles on Trading Psychology and Trading Techniques

Here is an (almost random) selection of context type articles…

Remapping the Mind: Cognitive Therapy for Traders

Three pillars of expertise

For Those Who Aspire to Greatness

The New Psychology of Exceptional Achievement

TradingAsMentalWarfare

 

He also has published a few books. I have 2 or 3 of them, but have only skimmed Enhancing Trader Performance… so can’t speak to the books. I requested a review of his latest book The Daily Trading Coach: 101 L… here on TL and no one responded. My take – could mean it sucs, but more likely it’s something great that the pack doesn’t/can’t appreciate. Steenbarger has a distinct cerebral approach that many simply can’t stay with.

 

Throughout his work, the common themes start with self directed (and guided) cognitive type psycho work, evolve to putting in the time / the 10000 hours rule…, on to the importance of ‘perfect’ practice (which is one of the reasons I go on occasional rants about the droves of posters with just months of experience directing noobies to sim when better alternatives are available… don’t get me started), on to implicit learning (contrasted with research and pattern recognition perspectives of development), on to zone trading, on to… He also wrote some article(s) about the ideal ‘environmental’ setups for beginners and the most beneficial attitudes and circuits they can take through stages of development, but can’t place the title(s).

 

Also, a certain percentage of noobie traders would also benefit from studying Malcolm Gladwell’s Outliers book.

 

hth

[robertm 10]

I've read (OK listed, audio books rock but don't come with charts so aren't much good for trading texts) Gladwell's Tipping Point, yet to get to his others, I like his stuff though.

 

I run across the occasional Steenbarger article/webcast, definitely on the ball. I'll hunt around for more info on the Maps, just interested to see how he structured it. I love mind maps, I use Mindjet every day.

 

I hear you & concur on Sim, it's good for working out the ins and outs of a new platform or instrument, but for collecting results it's pretty useless. Risk just enough to care about the result and you get instant hip pocket feedback.

[edabreu 10]

edabreu, could you explain that a little better and elaborate on what's in the chart? Having a little problem comprehending it all with just the notes on the chart.

 

Also could you explain what you mean by a 6/4 range bar pair. Not real familiar with range charts.

 

Hey Brian - It's my own little scalper pattern and it works for me. It is based on range bars. If you are not familiar with range bars then go research them. Once you understand the nature of a price range then those notes and patterns should become clear. Think of a time and sales window aka the tape. You are trading a predefined price bracket. So a 6/4 range bar combo means a 6 tick price bracket, and a 4 tick price bracket. Yes, I confess I am a dinosaur... I trade the tape.

[thalestrader 14]

I suggest you paper trade for 2 years..

 

Folks, IbusCane is not replying much so

He may be gone already… Literally!!

 

If he took Grey1's advice, he'll be back in 729 days when he finishes his paper trading.

 

I am in the camp that generally finds paper trading of only marginal usefulness, primarily limited to helping one learn the mechanics of order entry and trade management. Once one has that down, it is time to trade. Trade small, but trade live. When I first started to day trade stocks, for example, my average trade size was 85 shares. I sometimes traded as many as 200 shares, but more often I was only trading 50. I made more real progress trading 50 share lots live than I ever would have made paper trading trading 5000 sim shares. And I always traded with a stop.

 

Certainly there is a basic foundation that ought to be developed prior to live trading, and the time it takes to lay that foundation will vary from trader to trader. It was about six weeks for my nine year old daughter. For me, it took about ten years. But if I had known then what I know now, it would probably have been closer to six to eight weeks.

 

Best Wishes,

 

Thales

[srag&birdie2 10]

I am in the camp that generally finds paper trading of only marginal usefulness {/QUOTE]

 

I think it depends on how you treat paper trading. If you treat it with the utmost seriousness, record all your paper traders, tract your win/loss, commit to really learning from your mistakes, etc, then it can serve you very well. There is probably no better teacher. If you treat it as something that is just a game, don't record trades, sweep the mistakes under the rug 'cuz it is better for your ego to ignore them, etc, then it won't be of any help. Funny thing from what I've seen is that those who treat sim trading as useless because it doesn't have the money behind it are the ones who have emotional problems in real trading and burn through their accounts. They can't wait to jump into the market an trade. The hard truth is if you can't treat this as a serious business, ya won't be in business for very long.

[sevensa 10]

I am in the camp that generally finds paper trading of only marginal usefulness

I think it depends on how you treat paper trading. If you treat it with the utmost seriousness, record all your paper traders, tract your win/loss, commit to really learning from your mistakes, etc, then it can serve you very well. There is probably no better teacher. If you treat it as something that is just a game, don't record trades, sweep the mistakes under the rug 'cuz it is better for your ego to ignore them, etc, then it won't be of any help. Funny thing from what I've seen is that those who treat sim trading as useless because it doesn't have the money behind it are the ones who have emotional problems in real trading and burn through their accounts. They can't wait to jump into the market an trade. The hard truth is if you can't treat this as a serious business, ya won't be in business for very long.

 

You probably should have read the posts from Thales before you made the statement highlighted in bold in your reply to his post...