Considerations for a Wannabe Trader...

[TheNegotiator 13]

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.

 

The problem with this is that everyone has a different take and personality so it won't be suitable for all.

[TimRacette 11]

Everyone views the same market information, it's up to us as individuals to interpreted it in our own way. I've found it best to stick to your own opinions and come to your own conclusions.

[Jonathan1000 10]

I guess what you say is true...but just one question...if a trading master who made trades everyday and was in profit everyday would it be something to look at or not? seeing that

even when we trade using our own judgement we lost 50% of the time and win 50% of the time...to me its a no brainer and Im not going to stop using the subscription...to me spreadbetguru.com is worth every penny...but I know not everyone will be able to stomache copying someone elses trades...even if they are profitable trades...thats why they say only 10% of traders make it through.

[Obsidian 10]

just out of curiosity..do moderators torture vendors?

[aadambell 10]

I wonder how you are getting on after all this time and what path you have taken

[matchday 10]

Hi everyone

I'm very new to the trading thing, but everyday it gets more and more interesting and scary too.... when you go deeper and deeper in the subject...you realize how much opportunity and risk is there

 

I have many different questions. Some of the most basic and perhaps stupid questions are about selecting a broker and working with a broker company:

1. What are the 2-3 main features of a good/trustworthy broker?

2. What is their true role, apart from giving access to the trading platform, e.g. are they consulting on trades, should they provide any form of support, educate newcomers or something?

3. If some trader ( client of a broker) earns really big profit from a trade, does broker company looses their money because of that or such profit comes only from losses of other traders/clients?

4. Why broker is so keen on me to increase or re-fill the account, always asking to input more and more money into account? I sometimes get a feeling that broker benefits somehow on clients who loose/destroy their accounts. Is that possible or is it just an ill imagination ))?

 

thanks for your insights

[dday 10]

I'm a beginner and am trying to decide what trading tools I should use. I'm interested in trading gold, crude oil, and natural gas to start with. Do you have any recommendations? So far I was thinking about using MACD and valuecharts. Thanks for the help

[matchday 10]

I'm a beginner and am trying to decide what trading tools I should use. I'm interested in trading gold, crude oil, and natural gas to start with. Do you have any recommendations? So far I was thinking about using MACD and valuecharts. Thanks for the help

 

My main observations: Gold and Crude Oils are opposite instruments of USD. If USD gets stronger (people sell other stuff and buy USD) than normally Gold and Oil start to fall/ get down.

Another thing is - do not expect to earn quick money on Gold and Oil, these are subject to a long-terms trends,especially Oil. Look and their trends or patterns in Day and Week timeframes in order to figure out your position. The bigger account you have the better, because prices ( hourly, daily) can be quite volatile and you must have enogh fund to sustain your positions. If you place too small stops and take profits - it won't work that way on Gold and Oil. Ultimately Gold is a buy on a very long term basis (monthly) but Oil is very tricky.

Also Oil is very political too, subject to rumors, bad or good expectations, political risk, and bad or good economical results of countires like China and US.

If you can - trade with Demo for several months at least to have a feeling and only after trade with real money. otherwise, this is very risky for the beginner if you do not have a trusted adviser/experienced trader who will coach you.

[Obsidian 10]

I'm a beginner and am trying to decide what trading tools I should use. I'm interested in trading gold, crude oil, and natural gas to start with. Do you have any recommendations? So far I was thinking about using MACD and valuecharts. Thanks for the help

 

-decide what time frame would you like to use

-create a system with a proper risk/money management

-practice and master your system

-while practicing, prepare yourself for unexpected movement. make sure you have a plan before you click buy-sell button

[Vince50 10]

Hi,

 

Excellent summary for a newbie trader to consider. Im trading almost 15 years but only about 3 could be considered real trading, the rest was simply adding to a position I was going to hold for a long time and holding it for the day if I saw it was overextended or saw a doji after 5 increasing size bars in a row. Just simple workable stuff. The sad part was when I decided I cant do it part time anymore, I was on unemployment and decided to let it run out and just keep learning and start trading as soon as I could trade 3 months in a row profitably. I think that is the minimum any new trader should do before going live.Sadly I joined the Oliver Velez prop trading room where they teach you to daytrade off a 2 and 5 min chart individual stocks and supposedly give you huge leverage to trade with only like 10 cent commissions. We all believed it because Oliver was a best selling author. The company went out of business 1 year later and thank God I learned a little something before he went under.

 

As far as your goal of making $5000 a day on a 100k account, I think you would have some of the guys in Market wizards calling you up if you could do that. I would say maybe....only maybe...the best traders in the world can get that kind of return.I'd be stunned if you did that per week! I would say a more realistic return,especially at the beginning years of your "pro career" would be $500 a day. And think weekly. Thats $2500 a week x 50 is 125k a year! Thats more than doubling your money every year. If you wouldn't be happy with that, I think you are going to overtrade and make some big mistakes and end up making nothing. Just my opinion from watching 500+, other traders in a chat room with me trade alongside for a year.

 

I also am wondering why you would pick the ES contract as your only contract to make money. It is the one place to find the most pros; banks, Who even knows if the Fed(Plunge protection team) or what others are in that instrument. It doesnt move that much which I s why I think all the small guys get eaten alive in there because only guys who can put on 10 contracts or more at a time can make the kind of money you talk about. Why not crude oil or Metals? Will your system work on all markets? Also what time frame may I ask are you trading on and how many trades per day or week do you take?

 

best of luck.

Vince

 

 

1-Why.

I want to trade as a career. It did not start out that way. Originally, I just wanted to manage my own retirement account. I came out of the manufacturing and construction industries. I don't want to go back into either industry, and I don't see any way I can get work in either industry. I'm looking for a way of life and a career. I don't feel that the U.S. economy has anything to offer me. I don't feel like I have any other good options. I caution anyone wanting to go into trading as a profession. I don't have a family to support, or any real expenses, so that has been critical to my being able to put the time in to learn trading.

 

 

2-Commitment.

I have committed a little over 3 years now. Probably 2 to 2 1/2 years full time, every day.

 

3-Timeframe and method.

I guess I'd call myself a swingtrade scalper. I hate trend lines, and do not use them. I wasted a lot of time on trend lines. I only use price levels, support and resistance on my price chart. Then I use mostly the Advancers / Decliners for the general trend direction. I do not use multi-time frame charts. I only use a one minute chart. For me, something like a 133 Tick chart is just information overload, and takes my focus off the longer trend. I will be making up to hundreds of trades a day.

 

4-Account/investment size.

I expect to eventually make $800 to $1000 dollars a day. If I had a $100,000 account, I'd want to make $5,000 dollars a day. I've gone through about $25,000 dollars of expenses for bare bones living, and I have no rent, mortgage, heat or food expenses. Right now I have $10,000 in a trading account.

 

5-Money management.

I have a reasonable trading method that I have proven will make money. But it's taken over 3 years to get to this point. I've made all the typical mistakes that traders make. Let my losses run, take profit to early, etc.

 

6-Product.

All I trade is the ES e-mini futures contracts. Originally I looked at stocks. I consider stocks to be to much of a hassle, to much research, to difficult. I don't see any reason to trade anything else. My focus is to totally master what I do to an extremely profession level.

 

7-Broker.

I've only used a couple of brokers. This is an interesting topic. It takes a lot of time to get set up with a broker, and learn their platform. Just that alone could take months. It's a chore to determine what broker you want to use.

 

8-Platform.

By chance, I choose a broker that has very good charting. I believe that this is critical. After all, it's all about reading the chart. If you can't do that, then what's the point? Make sure that whatever platform you are using, you can navigate the charts without getting confused.

 

9-News source.

I looked into buying a subscription to a news service, but the expense was way more than I wanted to spend. I'm glad I didn't spend any money on it. News is very important, but trying to react instantly to the news is a game I would never try to play. I did go down that road of looking a earnings reports for about 6 months, and then decided that it's way to difficult, and I'm glad that I gave up on it. Don't get me wrong, I always check when the news releases are and make sure that I'm not trading when it comes out. Then I take a look at what the news is. I put a lot of time into figuring out how to interpret the news. That's an art form. But I don't trade the news, I trade the market internals and support/resistance.

 

 

10-Computer.

I've gone through 3 computers. One custom built myself. (Nightmare, that I don't recommend. But I'd probably do it again.) I like my laptop with an external screen attached. As with any product, the high end products are sometimes worse than the mid range quality. I bought a high end gaming laptop that I had to return twice, and then bought something else.

 

11-Internet Connection.

I live in a rural area and started with a local wireless company. It wasn't really good enough for trading. Luckily, during my learning phase, a cable company installed high speed on my road. I have a back up wireless connection through my cell phone company.

[TheNegotiator 13]

Vince I think the draw of the ES or other minis is that you can learn to trade on a small account without being crippled by one bad trade. Yes, you could hold a couple of ES 20 points offside with only $3k starting balance or something but that is well within your control most of the time. Metals and energies on the other hand can have thunderous moves for the under capitalised. I agree that ES can be tough but then there's always NQ,YM,TF to trade.

[Vince50 10]

Vince I think the draw of the ES or other minis is that you can learn to trade on a small account without being crippled by one bad trade. Yes, you could hold a couple of ES 20 points offside with only $3k starting balance or something but that is well within your control most of the time. Metals and energies on the other hand can have thunderous moves for the under capitalised. I agree that ES can be tough but then there's always NQ,YM,TF to trade.

 

Absolutely. The ES is good to start out with and get comfortable trading futures. And yes,yes,yes about oil. I cant even do it now. It makes me too stressed. Gold and silver are slower than oil but faster than Forex. I like that mix.

 

Do you use Fibonnacci or Harmonic patterns in making trading decisions? What one thing is the biggest factor in your trading decision?

[TheNegotiator 13]

Do you use Fibonnacci or Harmonic patterns in making trading decisions? What one thing is the biggest factor in your trading decision?

 

Fibonacci yes in certain cases. As a guide of IB expansion capability and after a strong move. Also look at the halfgap and session midpoint (amongst others) although clearly this is not really Fib. Harmonic patterns are not something I consciously look at although I subconsciously follow how the back and forth drives the market.

 

The biggest factor I would say is context of market activity. Take a look at the e-mini thread in my sig for more and ask any questions! Just because it's about the e-minis it shouldn't scare you off. The premise is commutable to any market.

[Vince50 10]

Fibonacci yes in certain cases. As a guide of IB expansion capability and after a strong move. Also look at the halfgap and session midpoint (amongst others) although clearly this is not really Fib. Harmonic patterns are not something I consciously look at although I subconsciously follow how the back and forth drives the market.

 

The biggest factor I would say is context of market activity. Take a look at the e-mini thread in my sig for more and ask any questions! Just because it's about the e-minis it shouldn't scare you off. The premise is commutable to any market.

 

I agree 100% neg. I just want patterns that are the easiest to identify. Isnt that what ultimately we all want? So if I am a gold and forex trader and you and some other guys start buzzing about how the ES IS NOW GIVING BACK ALL THE GAINS ON A GAP UP 85% of the time for the last month and if that happens then another thing happens 15 min before the close, you bet I will become very very interested in ES. In fact in hindsight, with this 3 yr bull run, Id love to backtest how a trader would have made put fading every gap down on the ES for last 3 yrs. Someone actually told me that except for mon and friday, it usually works. This comes from a website called masterthegap where all this guy does is play gaps on the ES. You might want to check it out. I think his basic newsletter is free.

[Security Shinobi 10]

1-Why.

I want to find patterns in noise. I want to feel the will of thousands at the same time. I want something to work at, and learn, and gain skill in. I want to experience something that's both an art and a science. And of course, I want to make money.

 

2-Commitment.

I can commit several hours a day, four from morning to afternoon and more in the evening when CME reopens.

 

3-Timeframe and method.

I know that I'd like to trade intraday, but I don't know exactly which frame yet. I'm trying them all out and seeing which works best for me.

 

4-Account/investment size.

When I start trading live I'll have $2500 for an initial margin. If it ever drops below $1900 I'll stop trading until I can replenish it with my day job.

 

5-Money management.

I'll trade with either 20% or 40% of my principal, depending on how confident I am in the entry. My position sizes will only increase if I make enough money.

 

6-Product.

I'm beginning with futures since they have the lowest margins.

 

7-Broker.

I've chosen a broker that's known for low margins, speed, and reliability. Their commissions are slightly higher than discounts, but you get what you pay for.

 

8-Platform.

I've found a futures platform that has everything I need and is supported by my broker.

 

9-News source.

I don't intend to use news, unless I can find some RSS feed that will warn me of catastrophes.

 

10-Computer.

My PC runs my platform fine.

 

11-Internet Connection.

I have a (mostly) reliable broadband internet connection.

[Security Shinobi 10]

For some reason I can't submit any posts. Or they aren't showing up. What gives?

[TheNegotiator 13]

1-Why.

I want to find patterns in noise. I want to feel the will of thousands at the same time. I want something to work at, and learn, and gain skill in. I want to experience something that's both an art and a science. And of course, I want to make money.

 

2-Commitment.

I can commit several hours a day, four from morning to afternoon and more in the evening when CME reopens.

 

3-Timeframe and method.

I know that I'd like to trade intraday, but I don't know exactly which frame yet. I'm trying them all out and seeing which works best for me.

 

4-Account/investment size.

When I start trading live I'll have $2500 for an initial margin. If it ever drops below $1900 I'll stop trading until I can replenish it with my day job.

 

5-Money management.

I'll trade with either 20% or 40% of my principal, depending on how confident I am in the entry. My position sizes will only increase if I make enough money.

 

6-Product.

I'm beginning with futures since they have the lowest margins.

 

7-Broker.

I've chosen a broker that's known for low margins, speed, and reliability. Their commissions are slightly higher than discounts, but you get what you pay for.

 

8-Platform.

I've found a futures platform that has everything I need and is supported by my broker.

 

9-News source.

I don't intend to use news, unless I can find some RSS feed that will warn me of catastrophes.

 

10-Computer.

My PC runs my platform fine.

 

11-Internet Connection.

I have a (mostly) reliable broadband internet connection.

 

As much as it seems like it could be possible to build up from a $2.5k account, the very reason you have chosen to trade futures puts the account at risk. I suggest you learn the markets for a reasonable period before even attempting to trade, then trade simulated whilst building up more capital. That way, when you do have more capital you will be better place to use it well.

[Vince50 10]

I agree negotiator. If one has only 2500 to put into a futures acct, save $1500, put 1000 into a forex acct and you can trade micro lots which are increments of 10 cents! That means on 15 min bars you can have a 20-30 pip stop and only lose 2 or 3 dollars when starting out!!!! I promise anyone here, youll feel just as happy winning $3 on a 30 pip win, than winning $100 on a futures trade. know why? No stress! And you know that whenever your ready yopu can go to 2 then 3 then 4 then 10 micro lots at 10 cents each. you control how much you put in. A good suggestion for people like myself who are fibonacci players is to go in with 3 contracts, that will be 30 cents eacxh tick, and peel one off at target one, peel one off at target 2 and another________???????(whenever you want!) so a 30 pip trade costs you at most 9 dollars!!!! and youll have a lot of fun. $2500 ISNT MUCH FOR FUTURES ESPECIALLY IF YOU have a system that requires more than 1 lot or 1 contract to be used at one time.

 

good luck.

[Obsidian 10]

For some reason I can't submit any posts. Or they aren't showing up. What gives?

 

first 5-10 posts waits moderators' approval i guess

[Security Shinobi 10]

Well, I'm not going to do any live trading until I can consistently profit in simulated trading with the same margins and commissions I'd be using live. So that 2.5k may never get touched at all. :embarassed:

 

And yeah, at this point I'm not even doing that much sim-trading. I'm just backtracing all the historical data I have like watching a movie, and devouring any reading materials and theory I can find.

[Savant 10]

Well, I'm not going to do any live trading until I can consistently profit in simulated trading with the same margins and commissions I'd be using live. So that 2.5k may never get touched at all. :embarassed:

 

And yeah, at this point I'm not even doing that much sim-trading. I'm just backtracing all the historical data I have like watching a movie, and devouring any reading materials and theory I can find.

 

That is also my philosophy. Cheers

[NYC 10]

That is also my philosophy. Cheers

 

Don't forget the slippage! If you system can hand the fact that your $100 position is really $100.10 when it fills and sells at $99.90.... Then it might work.

 

Paper trades never show you the bad fill...

[Savant 10]

I am also here for the same reason... Hope to get the best info... Just who to listen is holy grail?

[Security Shinobi 10]

I am also here for the same reason... Hope to get the best info... Just who to listen is holy grail?

 

The holy grail is that there is no holy grail.

[obradovicmilica 10]

I often think about my worst case scenarios.

What if my internet goes down?

What if my pc dies?

What if my broker platform crashes?

What if I suddenly taken ill