[es] What Do I Need to Learn

[goodoboy 10]

Hello,

 

I been trading the ES for nearly 1 month using Apex platform.

 

The results so far has been a max loss of $700. My back ground is mostly buy and hold stocks for long term based on fundamentals, but for the last 6 months, I been studying technical analysis and money management.

 

My approach to trading the ES is evidence based technical analysis by identifying overbought/sold, chart patterns, support and resistance, and fibs retracement and then I either go LONG or SHORT on the ES with hopes of 3+ points. I only use MACD and RSI.

 

The losses occur, when I am not being patient or not verifying everything, before taking the trade.

 

My question to experienced ES traders is what do I need to learn to with ES to be more efficient? Should I get a mentor/coaching? Introduce more lower indicators in my evidence.

 

Currently I am reading Candlestick Charting Explained.

 

Any advice is welcome.

[MightyMouse 12]

Do you know how to trade?

[khamore1 10]

Quote; "The losses occur, when I am not being patient or not verifying everything, before taking the trade".

 

You have half of the answer in your question, wait for a profitable experience trader to give you a better advice than mine

[goodoboy 10]

Quote; "The losses occur, when I am not being patient or not verifying everything, before taking the trade".

 

You have half of the answer in your question, wait for a profitable experience trader to give you a better advice than mine

 

Thanks buddy for the advice. I did answer my own question.

[Baker 10]

i have no experience trading, but it seems like you dont know what youre doing. try to just learn more in general.

[goodoboy 10]

Do you know how to trade?

 

LOL, what do you mean do I know how to trade? Can you be a little more detail?

 

What defines if someone knows how to trade or not? Whats the criteria?

[Baker 10]

LOL, what do you mean do I know how to trade? Can you be a little more detail?

 

What defines if someone knows how to trade or not? Whats the criteria?

you know how to trade when youre profitable (for the most part) imo. you started trading a month ago and youve lost $700. try reevaluating everything youve done.

[gosu 10]

Hello,

 

I been trading the ES for nearly 1 month using Apex platform.

 

The results so far has been a max loss of $700. My back ground is mostly buy and hold stocks for long term based on fundamentals, but for the last 6 months, I been studying technical analysis and money management.

 

My approach to trading the ES is evidence based technical analysis by identifying overbought/sold, chart patterns, support and resistance, and fibs retracement and then I either go LONG or SHORT on the ES with hopes of 3+ points. I only use MACD and RSI.

 

The losses occur, when I am not being patient or not verifying everything, before taking the trade.

 

My question to experienced ES traders is what do I need to learn to with ES to be more efficient? Should I get a mentor/coaching? Introduce more lower indicators in my evidence.

 

Currently I am reading Candlestick Charting Explained.

 

Any advice is welcome.

 

Right now you are just a babe in the woods. We all start out that way. You should know that you have much to learn, much more than you can possibly comprehend from your current situation.

 

The good news for you is that you are starting out at a time when it has never been cheaper and more convenient to do so, not just in terms of the cost of hardware, software, data, capital requirements, etc., but the fact that access to these things is even available. People who started pre-internet know what I'm talking about.

 

The bad news for you is that an entire industry has come about to teach, train, educate, coach people like you who do not have a clue. Their goal is to get some of your trading funds before you lose it all to the market.

 

Now, what to do. First, you should admit that you are not currently equipped to be participating in the markets with people who know what they are doing. The markets do not provide a Sesame Street where you can play and learn with others like yourself and not get hurt.

 

Second, you should come up with a learning plan that thoroughly details how you are going to get from ground zero to a point where you can at least participate in the markets without risking your survival. I call this being operational. It is the most important place for you because from it you can stay in the game and continue to learn and improve. Success in this business is all about survival. You asked how you can tell if you know how to trade. You can tell by having done it a very long time.

 

Third, if you're really serious about wanting to trade, you will come up with a plan to sustain yourself while you take yourself from ground zero to operational. This period should be measured in years not months. And when I say sustain, I don't mean just financially, although that is the most obvious.

 

Last, the single most important thing to know while you're learning is whether or not you're learning correctly. By all means, avoid falling into the trap that learning for the sake of learning is helpful. If you fall into this trap, either you will eventually drop out and move on or you will join the ranks of people who run a business to teach, train, educate, coach others about the stuff they've learned.

 

Goooooood luck!

[MightyMouse 12]

LOL, what do you mean do I know how to trade? Can you be a little more detail?

 

What defines if someone knows how to trade or not? Whats the criteria?

 

You need to understand how to trade before you can learn how to trade ES.

 

You need to be good at identifying what is a low price and what is a high price.

 

A fib retracement, or other common tool, will give you a relative low price, but other traders will wait for you to buy low and make you sell lower more often than not if you do not know how to trade.

[karoshiman 10]

My number one advice for you: Change your mindset.

 

I am relating to the mindset on how you have to approach trading in order to be successful.

 

From the way you ask this question it is obvious that you have a looong way to go...

 

Have you searched this forum for similar topics and checked out the advice given there?

 

How many books did you read about trading?

 

Have you done some backtesting on your own?

 

...

 

Imagine a forum for doctors and someone asking: "How can I conduct brain surgery?" ... You get my point...

 

Do your homework before you attend the final exam. And, it's a lot of homework...

 

You will learn also by doing the "exam" directly (i.e. learning by doing) and you learn a lot this way (... not recommended with brain surgery, though)... but be prepared to fail more often than you can imagine (i.e. lose a lot of money) before you succeed. Do you have enough money for that?

 

If the above is not enough (but it should) I can give you also a more concrete hint into the right direction: Forget about indicators.

 

 

EDIT: Don't get me wrong. I don't want to offend you. I have been there before myself. But this is how I see things now after failing a thousand times..

Edited April 2, 2012 by karoshiman

[goodoboy 10]

My number one advice for you: Change your mindset.

 

I am relating to the mindset on how you have to approach trading in order to be successful.

 

From the way you ask this question it is obvious that you have a looong way to go...

 

Have you searched this forum for similar topics and checked out the advice given there?

 

How many books did you read about trading?

 

Have you done some backtesting on your own?

 

...

 

Imagine a forum for doctors and someone asking: "How can I conduct brain surgery?" ... You get my point...

 

Do your homework before you attend the final exam. And, it's a lot of homework...

 

You will learn also by doing the "exam" directly (i.e. learning by doing) and you learn a lot this way (... not recommended with brain surgery, though)... but be prepared to fail more often than you can imagine (i.e. lose a lot of money) before you succeed. Do you have enough money for that?

 

If the above is not enough (but it should) I can give you also a more concrete hint into the right direction: Forget about indicators.

 

 

EDIT: Don't get me wrong. I don't want to offend you. I have been there before myself. But this is how I see things now after failing a thousand times..

 

Thanks for the time and advice. Really appreciate it. I only read one book so far, The Discipline Trader, which is very good. I have some capital set aside for learning and practicing. I decided to hold off on real live trading until I have a learning plan and trade execution plan. I will still be actively analyzing the SPX and ES chart for speculation and then some back testing at night to see if what I speculated was correct. Sort of like a football coach reviewing game film.

 

I wanted to read from more experienced traders so atleast make sure what direction to take and think you guys/gals helped me. I need a plan and learning material! I will start by searching this forum for more information for newbies.

 

Thanks all for the help.

 

Also, why do you say "Forget about indicators."

 

Thanks

[karoshiman 10]

 

...

 

Also, why do you say "Forget about indicators."

 

...

 

I am referring to the technical indicators to which new traders are often attracted to (MACD, RSI, etc.) as they make trading look so simple (e.g. buy if that line crosses this line or the line crosses this figure from below, etc.).

 

They are just derivatives of price and show only what happened in the past by reducing the amount of information you have already on your price chart. They have no predictive value.

 

I am sure you can build a profitable system by applying these in an intelligent manner together with a sound money management system. However, it will very probably be only a marginally profitable system.

 

Regarding your learning period, gather every information you can get on trading.

 

But no matter what your information source on trading is, you have to

 

- be critical about every piece of information you get, even if it is from a trustworthy source

- think for yourself and apply common sense

- develop your own approach to trading based on what fits best to your personality.

 

Good luck with your learning!

[goodoboy 10]

I am referring to the technical indicators to which new traders are often attracted to (MACD, RSI, etc.) as they make trading look so simple (e.g. buy if that line crosses this line or the line crosses this figure from below, etc.).

 

They are just derivatives of price and show only what happened in the past by reducing the amount of information you have already on your price chart. They have no predictive value.

 

I am sure you can build a profitable system by applying these in an intelligent manner together with a sound money management system. However, it will very probably be only a marginally profitable system.

 

Regarding your learning period, gather every information you can get on trading.

 

But no matter what your information source on trading is, you have to

 

- be critical about every piece of information you get, even if it is from a trustworthy source

- think for yourself and apply common sense

- develop your own approach to trading based on what fits best to your personality.

 

Good luck with your learning!

 

 

Thank you for your efforts and time. I really appreciate it.

[thnickster 10]

It sounds to me, unlike others, that you have a worthy set up for trading. I just think you expect too much from that particular system. If you are trading overbought or oversold areas using a slow stochastic, cci, etc., you are reversing on a possible trend..which is ok. But this technique is primarily for scalping. 3 points on ES? Do you mean 3 points or 3 TICKS?

3 points on ES is 12 ticks. No way. No wonder you are losing money. Here's is what is happening to you. Often you get a couple of ticks on the reversal and then it backs up on you and takes a bite. I use somewhat the same technique for 90% of my trades. I go for 2 ticks at 4 or 5 contracts. Let's take 4 contracts, two ticks. Let's say you are paying 4.80/per round trip (there are places you can pay less). 4.80 includes clearing fees..everything. Your cost is then 4x4.80=19.20, ok? 4 contracts x 2 ticks is 8. 8x12.50=$100. So you net 100-19.20= $80.80. You can do that a number of times a day. Also if you trade ZB and use the same technique you can accumulate a good amnt of money per day. ZB pays a lot more per contract. In my opinion you should definitely stay away from the mini dow. It pays $5.00 per tick which starts you off upside down. It is worthless and will suck money from you faster that an Oric.

 

Nick

[joshdance 10]

My question to experienced ES traders is what do I need to learn to with ES to be more efficient? Should I get a mentor/coaching? Introduce more lower indicators in my evidence.

 

In a nutshell, learn that for a while, ES will be your daddy, and you will be its bitch. You will never be a master of it, for you are never in control of it; you can only participate while others hold the reins. You will at some point experience the awesomeness of being in tune with it, and not feeling like cannon fodder. But it is always greater than you, and you MUST respect it, no matter how successful you may become.

 

Do not pay anyone a dime for their opinion, there's far too much good free advice available. Some bad free advice too, but not much worse than what most will charge for supposed wisdom.

 

My approach to trading the ES is evidence based technical analysis by identifying overbought/sold, chart patterns, support and resistance, and fibs retracement and then I either go LONG or SHORT on the ES with hopes of 3+ points. I only use MACD and RSI.

 

I'm not sure what "evidence based" analysis is... why 3 handles? Why not more or less?

 

I am not anti-indicator, although I do not use derivatives of price/time/volume, I find it easier to use them directly. Why MACD or RSI?

 

Here's the simple test: if you can't off the top of your head explain how either of those two indicators is calculated, you shouldn't have them on your chart. In fact, if you can even correctly identify what the inputs are for each, you would be way ahead of 90% of the others who use MACD or RSI.

 

If they are there because you have a very specific reason for use those specifically, then good for you. Otherwise, why are they there? And if you don't understand why those are on your chart, it doesn't make much sense to add more does it?

 

The losses occur, when I am not being patient or not verifying everything, before taking the trade.

 

You can't verify everything. "Confirmation" does not exist. By the time something is "confirmed," everyone knows it, and the market does not allow everyone to be right. We often blame lack of patience or lack of verification, when in fact it's more simple: you have only been trading ES for a month, and I don't know how long other things before that, but it sounds like not a long time.

 

Give it time, get to know ES like it's your new best friend, and then you'll be in a much better position to profit from it. When does it move? How much does it like to move? What does it care about?

Edited April 7, 2012 by joshdance

[goodoboy 10]

 

I'm not sure what "evidence based" analysis is... why 3 handles? Why not more or less?

 

I am not anti-indicator, although I do not use derivatives of price/time/volume, I find it easier to use them directly. Why MACD or RSI?

 

Here's the simple test: if you can't off the top of your head explain how either of those two indicators is calculated, you shouldn't have them on your chart. In fact, if you can even correctly identify what the inputs are for each, you would be way ahead of 90% of the others who use MACD or RSI.

 

If they are there because you have a very specific reason for use those specifically, then good for you. Otherwise, why are they there? And if you don't understand why those are on your chart, it doesn't make much sense to add more does it?

 

 

 

You can't verify everything. "Confirmation" does not exist. By the time something is "confirmed," everyone knows it, and the market does not allow everyone to be right. We often blame lack of patience or lack of verification, when in fact it's more simple: you have only been trading ES for a month, and I don't know how long other things before that, but it sounds like not a long time.

 

Give it time, get to know ES like it's your new best friend, and then you'll be in a much better position to profit from it. When does it move? How much does it like to move? What does it care about?

 

Thank you so much for your blunt and realistic comments. You are right, no mastering the ES, its my daddy, I am the as you said above.

 

For now, I am keeping it simple and just observing the price action of ES and working on my plan for learning. I want be paying anyone for any coaching or mentoring at this time. Learning on my own what works for me with the advice and reading here.

 

I am not using lower indicators, only 5 and 5 min chart and price action and resistance and support and get what points I can with money and risk management.

[BlueHorseshoe 10]

Here's the simple test: if you can't off the top of your head explain how either of those two indicators is calculated, you shouldn't have them on your chart. In fact, if you can even correctly identify what the inputs are for each, you would be way ahead of 90% of the others who use MACD or RSI.

 

I would take this a step further: if you don't understand how each is calculated and what that calculation is intended to achieve, then you won't know how to use the indicator.

 

A completely ridiculous sounding (but true) analogy is this:

 

Each day I drive my boat to work on the road. One day my boat won't work. I don't understand anything about my boat or its engine or the processes that go on inside it, so I take the boat to a boat mechanic. The mechanic has a look and says 'well there's no wonder it's not working, mate, you're trying to drive it on tarmac roads - this vehicle is meant to go on the water!'. I reply 'but I've been driving the boat to work on the road every day for three months now', to which the boat mechanic shrugs 'well you got away pretty lucky not having a very nasty accident pal: this is a boat, and it just ain't designed to go on tarmac. . .'

 

We're used to taking things for granted. In reality I drive a car to work on the road everyday because everybody tells me that this is what cars are for. But I know nothing about cars, so ultimately I'm just making a big assumption. This kind of assumption tends tends to work well in real life and it would be pretty difficult to function without it. In trading you can't afford to make these kinds of assumptions; you need to know exactly what's going on under the hood. This does not mean that you need to know the formula for every indicator under the sun, however, because you won't need to use every indicator under the sun.

 

I hope that's helpful.

[BlueHorseshoe 10]

 

My question to experienced ES traders is what do I need to learn to with ES to be more efficient?

 

Any advice is welcome.

 

In my opinion, the main thing that you need to know about the @ES is that it is heavily 'mean reverting'. This means that it spends most of its time backing and filling, retracing earlier movements and chopping around, never really going anywhere much. It's average daily change is miniscule. In the simplest terms, wherever it is headed right now, it will soon be coming back the other way.

 

Trending, breakout exceptions do occur, but they are few and far between, and often they are just a reversion to a longer-term mean in a higher timeframe.

 

In my opinion (which may not be other's), your approach needs to be based around trying to sell strength and buy weakness. If you get good at this, then you will need to try and find ways to make the more advanced distinctions that MightyMouse describes.

 

As you are already familiar with the RSI, here is an example of the type of approach you could take:

 

- If the market is in an uptrend then buy on the close whenever a 2-period RSI falls below 5.

- Exit your long position when the 2-period RSI crosses back above 60 (whether for a profit or a loss).

 

You'll need to find a way of determining the trend. A simple MA might do until you find something better. What was the best length (historically) for the MA? And why use a 2-period RSI rather than a 5-period RSI? And why use 5 as the oversold level? To answer questions of this sort you would need to learn to program and backtest your strategies. I would imagine you would want to use something like an 80 period SMA.

 

You might also want to consider the trend in higher timeframes and align yourself to this. You could only take longs from a fifteen minute chart when both the hourly and the daily chart were also above their MAs, for example.

 

You might want to try and refine your entries as well. Instead of entering on the close when the RSI falls below five, wait for this to happen on your fifteen minute chart and then wait for it to happen on a one minute chart to give your actual entry. Does this work any better? Once again, you'd need to learn how to mechanically backtest this in order to get anything like a reasonable answer.

 

I hope all that helps you and you can find ways to build upon it.

 

Bluehorseshoe

[wrbtrader 10]

...My question to experienced ES traders is what do I need to learn to with ES to be more efficient?...

 

Why did you decide that the S&P 500 Emini ES futures will be your primary trading instrument amongst all the other different types of futures?

 

I'm going to assume that you tested your trade method on all available futures trading instrument and that your backtest results showed you that your trade method performs the best on the Emini ES.

 

My point is that the goal is to be profitable and if your trade method performs "better" on a another trading instrument as shown in your backtest results...you're going to need a few good reasons why you still want to trade Emini ES when you have hard evidence you'll perform "better" in another trade instrument...assuming you've done the necessary backtesting and that your trade method performs "better" on a different futures trading instrument.

[goodoboy 10]

Why did you decide that the S&P 500 Emini ES futures will be your primary trading instrument amongst all the other different types of futures?

 

I'm going to assume that you tested your trade method on all available futures trading instrument and that your backtest results showed you that your trade method performs the best on the Emini ES.

 

My point is that the goal is to be profitable and if your trade method performs "better" on a another trading instrument as shown in your backtest results...you're going to need a few good reasons why you still want to trade Emini ES when you have hard evidence you'll perform "better" in another trade instrument...assuming you've done the necessary backtesting and that your trade method performs "better" on a different futures trading instrument.

 

I want to trade ES to be profitable and because I also swing trade stocks as well. I work full-time and as well and ES follows the S&P as well. In addition, as a source of additional income.

 

But from what you guys mentioned already, I need a plan to learn and plan to trade the ES that fits me. So thats what I am working on now. I am digging more into Al Brooks method on price action and monitor the ES on how it moves on the 15 and 5 min charts. So far, I a have become more patient, so thats a good start.

 

Thank you all for the help.

[wrbtrader 10]

I want to trade ES to be profitable and because I also swing trade stocks as well. I work full-time and as well and ES follows the S&P as well. In addition, as a source of additional income.

 

But from what you guys mentioned already, I need a plan to learn and plan to trade the ES that fits me. So thats what I am working on now. I am digging more into Al Brooks method on price action and monitor the ES on how it moves on the 15 and 5 min charts. So far, I a have become more patient, so thats a good start.

 

Thank you all for the help.

 

Regardless to you using Al Brooks method and/or Japanese Candlestick Analysis...don't trade Emini ES futures with real-money until you have mastered your trading plan. Just as important, after completion of designing your trading plan, make sure you then backtest it on all available futures trading instruments that you have access to so that you can determine which trading instrument will give you the best chance at being a consistently profitable futures trader.

 

If your backtest results point to the S&P 500 Emini ES futures as the best trading instrument...then trade it. Yet, if it points to something else...I highly recommend you trade that other trading instrument to prevent problematic trading and gives you the best chance to achieve your trading goals.

[roztom 10]

IMHO you can trade Jelly Beans if there is enough movement in it to cover slippage, fees and justify risk...

 

You mentioned you were down $700. - you should be down ZERO... that is what Sim is for...

 

There is often a tendancy to believe that complexity creates profits but nothing is further from the truth... simplicity rules but that is in the eye of the beholder.

 

Day trading is very much like being a fighter pilot... You must be in the moment..no time to think it through - no arm chair laid back experience..it is peddle to the metal when you have to move....

 

One thing that is very difficult is to know yourself.. you will be embarking on a journey of self-discovery. This is not like making a pilgrimage or anything but the alignment that is required psycologically can not be generalized. It is specific to each individual... You will discover how misalignment causes you to "break rules", etc... Even if you come up with a process that works you might not be able to execute it...now there's a can of worms.. Just be assured that is something we all had to face on the path..

 

One thing about price based indicators..there is no holy grail...no secret sauce, no special indicator or combination that unlocks the Trading ATM - it doesn't exist, imho...

 

BTW, I do use indicators as reference points along with other tools but I execute my trades without confirmation. Confirmation is needing to be right.. there is no such thing... "confirmation" exists off to the right side of your screen... that's when you will find out..

 

All price based indicators are derivative and if you look at a typical software charting package they are loaded with all kinds of redundent indicators... most aren't worth #%^*

 

So what do you do? Trying to figure this trading thing out is like wandering in the desert for 40yrs... and you cannot replicate what someone else does otherwise we would all have signed up for that program years ago.

:doh:

 

I do not want to discourage you but you do need to lay out a educational plan... If you read enough on these forum's you will see that approaches are very diverse. Why is that?

 

One size does not fit all... you cannot mimic or replicate someone elses plan. Many of the vendors, many of whom cannot make $ trading, will offer the keys to the kingdom. Even if you were fortunate to find one that actually was successful - there are some, there is no reason to expect you could replicate their approach.

 

If you search around you will find what the pieces are to put a plan together... the learning curve is signifigent but do-able.

 

We all have our own preferences and I am no exception... I am going to suggest that you learn how the market works - Auction Theory. Why it rotates, why it moves and why most people lose their $. When you understand why money is lost then you will begin to learn how it is made...

 

Good luck... be patient... ask questions... be skeptical .. there is no easy $ this is the financial Superbowl but again, it can be done. Just don't underestimate who you are trading against..not us..the Goldman Sach's, Prop Shops, HFT's.. you must find an "edge." Something that lets you execute with a positive expectancy over time... Define that, execute it consistntly and there you are...

Edited April 10, 2012 by roztom

[phantom 16]

Hello,

 

I been trading the ES for nearly 1 month. The results so far has been a loss of $700. My background is mostly buy and hold stocks for long term based on fundamentals, but for the last 6 months, I been studying technical analysis and money management.

 

My approach to trading the ES is technical analysis by identifying overbought/sold, chart patterns, support and resistance, and fibs retracement and then I either go LONG or SHORT on the ES with hopes of 3+ points. I only use MACD and RSI.

 

The losses occur, when I am not being patient or not verifying everything, before taking the trade.

 

My question to experienced ES traders is what do I need to learn to with ES to be more efficient? Should I get a mentor/coaching? Introduce more lower indicators in my evidence.

 

Currently I am reading Candlestick Charting Explained.

 

Any advice is welcome.

 

Hmmmmmm.

 

 

Okay, bud. So you've become interested in trading...

 

I definitely feel your pain! Most everything out there in the info sectors is dubious, at best. For the most part, if someone were successful in a potentially ridiculously lucrative field such as professional trader, and he were willing to freely pass that info on to someone else other than his/her own brothers or children, that would be unbelievable!

 

Nevertherless, from my experience, I think that the stock indices are NOT the weapon of choice for the inexperienced trading neophite...

 

In fact, even though I made a steady income for years trading NQ and ES, I discovered that there were other markets that offered much better returns on investment (in terms of both time AND dollars).

 

If you were to refocus your efforts into the, say, energies markets and coffee, for instance, YOU WOULD BE ABLE TO TRADE SUSTAINABLE SWINGS FOR MUCH LARGER RETURNS THAN THE AVERAGE ES TRADE USUALLY PRESENTS.

 

I fully realize that alot of the readers here on TL swear by the almighty ES contract. But I'm not bullstng here when I say that it is IMPERATIVE that you take every advantage in your arsenal while you are learning to spot sweet opportunities and milking them for big bucks... enough to overcome your losses and still pay the bills...

 

Also, and I cannot stress this enough, if you've been losing money on short term charts, stop looking at them! Start looking at 15-30 minute charts, especially during key times of the trading day (ie 8-10 am and 2-4 pm in New York) and trade trend continuations from consolidation breakouts (2-4 bars wide consolidations) and focus primarily on limiting losses. If you risk small amounts of capital until you score a big wave, the big wave WILL COME as long as you stick to the key trading times!

 

Use a trailing stop to manage your trades. Trading for 3 pts is nonsensical when you should be trying to pick up $900 and $1000 dollar per contract moves (and you will see these routinely in the energies and coffee). Its called "reward to risk." Why play Russian Roulette when you could be playing "Loaded Dice"???

 

I've probably given too much information...

 

Anyway, best of luck. Oh yes... and trading well does not come from a book or a mentor. It comes from confidence and experience in making winning trades pay well and limiting losing trades...

 

 

Luv,

Phantom

[goodoboy 10]

I would take this a step further: if you don't understand how each is calculated and what that calculation is intended to achieve, then you won't know how to use the indicator.

 

A completely ridiculous sounding (but true) analogy is this:

 

Each day I drive my boat to work on the road. One day my boat won't work. I don't understand anything about my boat or its engine or the processes that go on inside it, so I take the boat to a boat mechanic. The mechanic has a look and says 'well there's no wonder it's not working, mate, you're trying to drive it on tarmac roads - this vehicle is meant to go on the water!'. I reply 'but I've been driving the boat to work on the road every day for three months now', to which the boat mechanic shrugs 'well you got away pretty lucky not having a very nasty accident pal: this is a boat, and it just ain't designed to go on tarmac. . .'

 

We're used to taking things for granted. In reality I drive a car to work on the road everyday because everybody tells me that this is what cars are for. But I know nothing about cars, so ultimately I'm just making a big assumption. This kind of assumption tends tends to work well in real life and it would be pretty difficult to function without it. In trading you can't afford to make these kinds of assumptions; you need to know exactly what's going on under the hood. This does not mean that you need to know the formula for every indicator under the sun, however, because you won't need to use every indicator under the sun.

 

I hope that's helpful.

 

Thank you for the comment. Good analogy.

[goodoboy 10]

Regardless to you using Al Brooks method and/or Japanese Candlestick Analysis...don't trade Emini ES futures with real-money until you have mastered your trading plan.

 

You are definitively correct about. I stop trading live for now and take some time on a learning approach.