Considerations for a Wannabe Trader...

[TheNegotiator 13]

Hi C4Warrior!

 

Welcome to TL. Okay so let me give you a few of my thoughts on what you have said.

 

1 - Why

Just try to ensure that when you are trading the focus is on trading well. Money follows trading well not those who are trying to make money.

 

2 - Commitment

Great. Make sure you give yourself ample time to relax and recouperate. Trading can take an awful lot out of you, especially early on in your career.

 

3 - Timeframe/method

I slightly disagree with tradewinds here. Price moves down are often fast and furious. I think you can do well by being good at trading bear markets. But maybe you have to start thinking whether you should have a broader product base for this. I'd agree with TW about not wanting to be just a bear market trader personally though.

 

5 - Money Management

 

I was referring to the money management of your trade and your account. Essentially, risk.

 

6 - Product

 

Doesn't sound like you're a fool. From the amount of time you spend reading by the sounds of it, trading stocks could be the way you succeed. However, an idea about what a particular stock might do is nothing without a thorough trading plan.

 

10 - Computer

 

Overkill perhaps? Lol. Either way, if you are completely inept or just can't be bothered, you have to have a backup and a way to quickly get someone else to fix it. Make sure you can easily get hold of your broker by phone.

 

11 - Internet

 

No idea really. If you have fibre you should be fine though. Check speedtest.net

 

Overall be under no illusions I'd say. You'll likely go through ups and downs like most do, before you really get anywhere. So don't be too dishearted if the cash doesn't just roll in straight away. Be humble or the market will force you to be. Don't fight the market. Use TradersLab every day! Lol.

 

Good luck.

[Stiffroot 10]

Can anyone recommend a platform that I should look into for the Emini SP?

 

Thanks!

 

I am looking at Kingsview, but I am sure their are others. Will let you know how it works out, but so far the best for me!

[Tradewinds 12]

I am looking at Kingsview, but I am sure their are others. Will let you know how it works out, but so far the best for me!

 

Have you looked at TradeStation?

[raul 10]

Hello to everyone here. I've been trading for a little over a year now and finally seeing the light.

I would like to share what I have learned.

 

 

3 - Timeframe/method

If one looks at the Globex market, the moves (trend) are almost perfectly smooth unlike the US markets which can look like a train wreck. If one could stay up all night, one could start trading at midnight (pacific time), I've seen nice moves start then and then pick up speed around 5 and 7 AM, with a final good move before 10:30 to 11, when things get choppy. On occasion a nice reversal starts around 12:30 CT but these are rare. To combat boredom and getting killed by the chop, one should trade only the early morning or after lunch, but the mornings are best.

Simple is better, when trading in real time there is no time to second guess, don't ask me how I know this.

I trade Ichimoku cloud breaks, for the more aggresive trader, looking for candle reversal patterns along with Stochastics (fast line crossing slow) gives an good entry point. Know the target and be prepared to get out. I always use bracket orders and have my broker's number next to me in case my connections drops.

Trade with the longer term trend (1 hour), buy/sell pullbacks and dips. The 20 to 50 day EMAs give good support and resistance.

 

 

5 - Money Management

 

I don't think the often heard 1% or 2% risk on an account is practical, depending on where one enters, it may take more than to not get stopped out, therefore only enter a trade where the stop is as small as possible, on a trend reversal, sometimes easier said than done.

 

6 - Product

 

The Russell 2000 is a lot less choppy than the S&P 500 E-mini, so I trade that. Crude Oil pays even more. I think last week I compared the moves, one trade in crude oil was $2600, Russell was 1400 and ES was 900.

I don't carry my trades overnight since my account is small.

 

7 - Broker

 

My broker is Daniels Trading, i switched to them after being with TradeStation because there is no charge for the platform (from OEC) and no charge for the data feed. The platform is only for Futures. Round trip cost per trade is 5.90 +/-.

Another alternative is Infinity AT, it takes 2700 to start instead of 5K (Daniels Trading and most other brokers). I like and dislike the charting package which is Sierra Charts. You can have separate charts but the toolbars stay with only one chart.

 

10 - Computer

 

I have several computers, all of them old, Pentium 4 with 2 to 4Gb of RAM, two computers I bought for $5 each, so there is no need for thousands of dollars of new equipment, we are looking at charts that don't move like video games. I use three screens, at times I had 5 screens but one should concentrate on only a few markets, preferably not all correlated. Oil seems to precede the ES when it moves. When the ES is not moving up, Oil will go down. So I look at Crude Oil, Russell, Soybeans. Have charts for 5 minutes or less and separate charts for 1 hour or longer to see the bigger picture (support and resistance levels to trade within).

 

11 - Internet

 

I just have middle of the line cable, 100Mbps.

 

12 - Mentors

 

I would stay away from the many services out there. I followed two for months and it was a waste of time and money. A real trader has no time to be talking, perhaps for longer term trading but not intraday.

There are free resouces like Trade with Precision and icecommentary.

 

___________

[TheNegotiator 13]

Hi Raul and welcome to TL!

 

A couple of comments.

 

Timeframe/method- Wow. If it works, good for you. Otherwise, try to simplify not complicate your trading. Seriously, it's hard to focus on many different and complicated indicators.

 

Computer- If you run anything other than windows xp sp1 then you'll be getting clogged up with such old systems. OS updates and just background stuff like flash and java will hog resources on a system in which they are already low. If you use such a system, make sure it's clean and very well customised, turning off all unnecessary services etc..

 

Up to you though.

[Jleon 10]

Hello to everyone here. I've been trading for a little over a year now and finally seeing the light.

I would like to share what I have learned.

 

 

3 - Timeframe/method

If one looks at the Globex market, the moves (trend) are almost perfectly smooth unlike the US markets which can look like a train wreck. If one could stay up all night, one could start trading at midnight (pacific time), I've seen nice moves start then and then pick up speed around 5 and 7 AM, with a final good move before 10:30 to 11, when things get choppy. On occasion a nice reversal starts around 12:30 CT but these are rare. To combat boredom and getting killed by the chop, one should trade only the early morning or after lunch, but the mornings are best.

Simple is better, when trading in real time there is no time to second guess, don't ask me how I know this.

I trade Ichimoku cloud breaks, for the more aggresive trader, looking for candle reversal patterns along with Stochastics (fast line crossing slow) gives an good entry point. Know the target and be prepared to get out. I always use bracket orders and have my broker's number next to me in case my connections drops.

Trade with the longer term trend (1 hour), buy/sell pullbacks and dips. The 20 to 50 day EMAs give good support and resistance.

 

 

5 - Money Management

 

I don't think the often heard 1% or 2% risk on an account is practical, depending on where one enters, it may take more than to not get stopped out, therefore only enter a trade where the stop is as small as possible, on a trend reversal, sometimes easier said than done.

 

6 - Product

 

The Russell 2000 is a lot less choppy than the S&P 500 E-mini, so I trade that. Crude Oil pays even more. I think last week I compared the moves, one trade in crude oil was $2600, Russell was 1400 and ES was 900.

I don't carry my trades overnight since my account is small.

 

7 - Broker

 

My broker is Daniels Trading, i switched to them after being with TradeStation because there is no charge for the platform (from OEC) and no charge for the data feed. The platform is only for Futures. Round trip cost per trade is 5.90 +/-.

Another alternative is Infinity AT, it takes 2700 to start instead of 5K (Daniels Trading and most other brokers). I like and dislike the charting package which is Sierra Charts. You can have separate charts but the toolbars stay with only one chart.

 

10 - Computer

 

I have several computers, all of them old, Pentium 4 with 2 to 4Gb of RAM, two computers I bought for $5 each, so there is no need for thousands of dollars of new equipment, we are looking at charts that don't move like video games. I use three screens, at times I had 5 screens but one should concentrate on only a few markets, preferably not all correlated. Oil seems to precede the ES when it moves. When the ES is not moving up, Oil will go down. So I look at Crude Oil, Russell, Soybeans. Have charts for 5 minutes or less and separate charts for 1 hour or longer to see the bigger picture (support and resistance levels to trade within).

 

11 - Internet

 

I just have middle of the line cable, 100Mbps.

 

12 - Mentors

 

I would stay away from the many services out there. I followed two for months and it was a waste of time and money. A real trader has no time to be talking, perhaps for longer term trading but not intraday.

There are free resouces like Trade with Precision and icecommentary.

 

___________

 

Looks like ya got it all figured out. I would recommend Advantage Futures if you have any problems with Daniels. Ya never know how good your brokerage/FCM is until you need to contact them while the exchanges are down and orders are being cancelled in a busy frenzy. Good Luck

[raul 10]

 

Timeframe/method- Wow. If it works, good for you. Otherwise, try to simplify not complicate your trading. Seriously, it's hard to focus on many different and complicated indicators.

 

Computer- If you run anything other than windows xp sp1 then you'll be getting clogged up with such old systems. OS updates and just background stuff like flash and java will hog resources on a system in which they are already low. If you use such a system, make sure it's clean and very well customised, turning off all unnecessary services etc..

 

.

 

Yes, I agree that anything older than XP sp1 will be trouble, I have sp3 and so far no problems...I think. One problem I have not been able to figure out is why sometimes I lose my internet connection to the trading platlform and charts, it's only a few seconds and reconnects itself but I am troubled by the potential problem. I questioned my isp and they gave me a new modem but no difference. I asked my broker and they did not have any problems on their end. I've seen this with TradeStation and my present platform. I do not know where the problem is, has anyone else had this problem? I don't think my band width is the problem because the connection is never dropped on other programs.

 

In regards to the time frame/method, maybe I made it sound too complicated, I just have a 1-2 minute chart with Ichimoku clouds and Stochastics below that. On another chart I have an hour chart so I can see the previous support and resistance levels and the larger trend.

 

I hope this helps others. Thank you for this thread.

[TheNegotiator 13]

I don't know why you would lose the connection. Windows power saving options maybe? If the pc is 'idle' for a while maybe it switches the ethernet off. I don't know though you'd have to check.

[raul 10]

I have come to the conclusion that my OEC trading platform is the problem. I have read from other people (in other forums) that also had problems with OEC losing connection or freezing but their comments were from a while back. I am going to follow Jleon's suggestion and look at Advantage Futures. Perhaps other members can suggest who they use and if they have had disconnect problems. Thanks in advance.

[traderJennie 10]

Hello all, I am new to trading and I am finding it very challenging. Maybe it is because I started in July of 2011, and we all know what happened in August of 2011. It is just so hard to find a system that works consistently, and in all kinds of markets.

 

A former colleague of mine told me about a strategy called pairs trading, he said it is a better way to manage risk so you make more money (or, lose less money). Has anyone ever traded pairs? Where can I find out more information about how to do this?

[leobust 10]

Hello all, I am new to trading and I am finding it very challenging. Maybe it is because I started in July of 2011, and we all know what happened in August of 2011. It is just so hard to find a system that works consistently, and in all kinds of markets.

 

A former colleague of mine told me about a strategy called pairs trading, he said it is a better way to manage risk so you make more money (or, lose less money). Has anyone ever traded pairs? Where can I find out more information about how to do this?

 

Maybe your colleague is talking about spread-trading.

This site maybe a source of info:

What is Spread Trading?

 

I haven't actually traded this strategy but I'm thinking of trying it, (paper trade), using index futures (eg. ES/NQ).

[TheNegotiator 13]

Hello all, I am new to trading and I am finding it very challenging. Maybe it is because I started in July of 2011, and we all know what happened in August of 2011. It is just so hard to find a system that works consistently, and in all kinds of markets.

 

A former colleague of mine told me about a strategy called pairs trading, he said it is a better way to manage risk so you make more money (or, lose less money). Has anyone ever traded pairs? Where can I find out more information about how to do this?

 

The trouble is Jennie, most people trade pairs(generally pairs are related stocks) or spreads(like NQ vs ES or 10yr vs 30yr treasuries) in the same way as they trade a single or outright contract. In this way, imho it makes it riskier. You have to get good entries and exits on 2(or more) products, commissions are higher(because you do more trades) and you trade bigger size to account for the smaller profit potential. However, if you trade in a way to take bigger moves over the course of the whole day(or week), then it can be a great way to mitigate risk. The really great spread traders I have known in the past, tend to trade around their spreads constantly improving the average core position. But this takes skill and practise-like everything else in trading!

 

Hope this helps.

[raul 10]

Hello all, I am new to trading and I am finding it very challenging. Maybe it is because I started in July of 2011, and we all know what happened in August of 2011. It is just so hard to find a system that works consistently, and in all kinds of markets.

 

A former colleague of mine told me about a strategy called pairs trading, he said it is a better way to manage risk so you make more money (or, lose less money). Has anyone ever traded pairs? Where can I find out more information about how to do this?

 

Jennie,

No strategy works all the time, there are strategies for trending markets and there are strategies for choppy markets and mixed in there are pullbacks and retracements. When you started trading is not the problem.

You can spread trade Binary Options at Nadex, I am sticking with futures, to me it seems that the risk is smaller and the rewards bigger.

[TimRacette 11]

raul- if you're setup through a router or firewall that could be the problem. You are able to go into screen saver > power settings and modify for energy efficiency vs performance, but that shouldn't effect your Internet connection.

[raul 10]

Thanks Tim,

 

I am not going through a router. My power settings are not the problem, neither is my firewall, that is why I think it is OEC.

 

Will open an account with Mirus Futures, I have not seen a disconnect yet.

 

I am now connecting to OpenDNS and so far I only had one short disconnect.

[JSChicago 10]

Hello all, I am new to trading and I am finding it very challenging. Maybe it is because I started in July of 2011, and we all know what happened in August of 2011. It is just so hard to find a system that works consistently, and in all kinds of markets.

 

A former colleague of mine told me about a strategy called pairs trading, he said it is a better way to manage risk so you make more money (or, lose less money). Has anyone ever traded pairs? Where can I find out more information about how to do this?

 

The broker I use (ThinkOrSwim) has a guy that does some webinars on pairs trading; you can go through his archives here: Pairs Trader Archives

BTW.... if you ever type in the url please note that this is .net not .com ( I've seen some very bad reviews about the folks at the .com domain and I don't want you to mistake the two).

Edited January 26, 2012 by JSChicago

[TimRacette 11]

Hey JS, are you referring to Shaowtrader (Peter Reznicek). Super great guy and fantastic trader. I learned a lot about market internals from him over the years.

[JSChicago 10]

Hey JS, are you referring to Shaowtrader (Peter Reznicek). Super great guy and fantastic trader. I learned a lot about market internals from him over the years.

 

Hi Tim, the name sounds familiar (Peter Reznicek) so that's probably correct. I'm not a pairs trader and haven't kept up with their webinars on the subject, but their crew seem like stand-up guys that know their stuff.

[Br88dy 10]

1. Why

I'm 23 years old and was recently told I won't be able to fulfill my lifelong dream of being a pilot in the military. Instead of moping and being stagnant, I decided to get going on another career I've been interested in for many years. So, I guess that means I want to make this a career.

 

2. Commitment

Well, I'm moving to Phoenix in a month, so I'll need to get a job to support myself. But I plan on putting in several hours a day into developing a strategy and system.

 

3. Timeframe and method

I'm brand new to this, so I don't know what a swing trader, scalper, position trader, or news traders are. All I know is that I want to eventually just be dealing with futures, and if I'm successful enough, start a hedge fund.

 

4. Account/Investment size

I'm starting with nothing. I don't expect to be live trading for a few months, so that gives me plenty of time to paper trade and come up with a strategy. Not sure how much I'll have to start with to open an account with a broker. I don't even know what markets are available for futures contracts traders. Like I said, I'm BRAND new to this.

 

5. Money management

Like I said, I'm brand new. But I plan on using the next few months of paper trading to come up with a trading method. I come from a poker background, and I've become pretty disciplined in that I don't let my emotions affect my strategy. Once I developed that discipline I've been able to win at least 90% of all the weekly home games I play with my friends. So I know I have the ability to develop a method that will become profitable.

 

6. Product

Like I mentioned before, I want to stick with futures. The amount of research and speculation involved in stocks is a headache to think about. Futures has a huge amount of risk, but also a massive amount of potential for serious profit. I would like to use my own cash to develop my own portfolio. Not too interested in using other people's money to make money. I would feel a lot better about losing my own 10 grand than losing someone else's. I realize it may take 4 or 5+ years to have enough cash to support myself, but I'm willing to go thru all the bad times to get to the good times.

 

7. Broker

No idea who I'd use, I'll think about that once I have cash and a strategy.

 

8. Platform

I don't know which platform would be best for me. But I can say that when I start live trading I'll be using a Mac, and that I'll be dealing with futures.

 

9. New Source

I suppose news will have an affect on futures, but I'm not sure what I'll do when the time comes.

 

10. Computer

I'll most likely be using a Macbook Pro when the time comes.

 

11. Internet

My internet in Phoenix will be high speed and sufficient.

 

If anyone has any suggestions on where I should start, like what books to read or what websites to look at (especially for futures contracts) It would be much appreciated. I'm currently spending anywhere from 4-8 hours a day of research online, but if I knew where to focus my energy I'd learn a lot quicker. Thank you!

[TimRacette 11]

Ya JS if you're in Chicago you should hit up the Thinkorswim headquarters, they got a pretty cool office setup there.

[TimRacette 11]

1. Why

I'm 23 years old and was recently told I won't be able to fulfill my lifelong dream of being a pilot in the military. Instead of moping and being stagnant, I decided to get going on another career I've been interested in for many years. So, I guess that means I want to make this a career.

 

My input would be two specific books, Reminiscences of a Stock Operator by Edwin Lefevre and Pit Bull by Martin "Buzzy" Schwartz. Both are great reads.

 

Btw, I'm also out in Phoenix, well Scottsdale, great place to be this time of you. I use COX Internet.

 

-Tim

[Br88dy 10]

I appreciate it Tim, now I can stop sleep walking around the internet.

[yansen 10]

3 choices in trading: give up, give in, or give it your all.” Losses happen, learn from them, and also appreciate & enjoy your winners.

[TimRacette 11]

3 choices in trading: give up, give in, or give it your all.” Losses happen, learn from them, and also appreciate & enjoy your winners.

 

Well said. I think you have to give anything you do your all. Know the rules of the game, and what your cutoff point is going into it and then commit to putting in the time and hard work. That's been my approach towards most things in life and it's worked out well.

 

A quitter never wins and a winner never quits.

[Jonathan1000 10]

Hi All,

 

As a trading beginner, I started using spreadbetguru.com copied the trades the guru was placing and looked at the chart to see if I could see what i was doing...it was tricky at first because you have to be ready to place the trade when you are told to....but ive gotten the

hang of it and i can see what the guru is doing in where he is placing his trades with stoploss profit target etc...what i would say is that you do lose...but end up making money daily. Spreadbetguru I would say is a decent site that helps show you where a trader is placing trades which you will be able to pick up on when looking at charts.

 

Apart from this, I think I will stick with trading Dow Jones, too scared to try any other market now.