New Trader: Should I Call It Quits?

[newtrader 10]

I have been trading for a few months without any success. Ive hit a mental block in my trading career. I spent quite some time researching and reading every book I can get my hands on over the past 10 months or so.

 

I need good trading advice that can help me change my trading. I keep a trading journal which is flooded with all the wrongs things I have done. Ive tested every indicator possible, studied strategies of authors, etc...

 

I can not seem to figure it out. What am I missing?

[Soultrader 12]

You sound like you want to succeed badly. As long as you have that motivation and passion you are on the right track.

 

Sooner or later you will have a wake up call. That is when you realize how not to lose and you focus on starting to make money. My wake up call came after losing my account twice.

 

One trading advice: instead of searching for the truth.... look within you. Trading style and strategy can only be mastered if you study on your own and create what fits you.

 

Forget indicators. Who needs them? If indicators made money, everybody would be rich. Indicators are completely useless to me. My trading changed 360 degrees when I dropped all indicators off my chart and focused on price action alone combined with tape.

 

There are two types of men. 1. Those who fall. 2. Those who fall and get back up.

 

I wish you the best on your journey.

[newtrader 10]

Thank you. I have looked everywhere for some good tape reading educational materials but failed to find any. Can you recommend any books?

[Soultrader 12]

Thank you. I have looked everywhere for some good tape reading educational materials but failed to find any. Can you recommend any books?

 

Not many good books out there. But for now learn the basics of tape reding by reading Humprehy Neill or Vadym Graifer.

 

After that stare at the tape for months. The only way you can fully understand it is to watch it carefully and practice. Learn how to seperate noise from info. Learn to watch for price rejection and short-term reversals.

 

Also check back at the trading video forum, I will try to post a video on tape reading.

[newtrader 10]

Very appreciated. Thank you Soul.

[luke24.5 10]

Not many good books out there. But for now learn the basics of tape reding by reading Humprehy Neill or Vadym Graifer.

 

After that stare at the tape for months. The only way you can fully understand it is to watch it carefully and practice. Learn how to seperate noise from info. Learn to watch for price rejection and short-term reversals.

 

Also check back at the trading video forum, I will try to post a video on tape reading.

 

Amen. Amen. Amen.

 

Would Boeing tell new pilots to read a book on flying a 747 and then stick them in cockpits?

 

Would you read a book on Judo and tell someone, "alright now, come at me with that knife."?

 

Would you read a book on how to play guitar and expect to cut a record when finished?

 

You can learn from books, tapes and seminars but nothing replaces practice. If you can't afford a real-time datafeed and simulator, at least find a free delayed feed and paper trade. Practice, practice before you step in the ring against the world champions of trading.

[newtrader 10]

I have no clue how to look at the tape or what I am supposed to be watching for. Will I be able to understand it just by staring at it?

[Soultrader 12]

I have no clue how to look at the tape or what I am supposed to be watching for. Will I be able to understand it just by staring at it?

 

Thats pretty much what need. I trained my brain to go on autopilot. Tape reading is a very hard skill set to learn and takes hundreds or thousands of hours to master.

 

I know as a new trader tape seems very confusing but once you understand what it is you need to look for, it is not that hard.

 

I made a tape reading video during yesterdays unbelievably boring market action. (Sept. 6, 2006) We literally had no movement in the markets. I will upload it now and post them when it's ready.

[Lisa 10]

Amen. Amen. Amen.

 

Would Boeing tell new pilots to read a book on flying a 747 and then stick them in cockpits?

 

Would you read a book on Judo and tell someone, "alright now, come at me with that knife."?

 

Would you read a book on how to play guitar and expect to cut a record when finished?

 

You can learn from books, tapes and seminars but nothing replaces practice. If you can't afford a real-time datafeed and simulator, at least find a free delayed feed and paper trade. Practice, practice before you step in the ring against the world champions of trading.

 

Very true! Trading is probably the only advanced career that literally anybody can step into without the proper training. This makes it harder than most profession that requires higher education.

 

So be prepared newtrader! Success in trading takes alot of work especially because you are on your own. Good luck.

[Soultrader 12]

Newtrader, I posted a two part video on tape reading. It is definitely not the best video because of the market conditions on Sept. 6, 2006. The markets was literally dead.

 

I tried to make 3 parts to this but did not see the need to because of the dull market.

 

CLICK HERE FOR VIDEO THREAD

[chaostrader 11]

Amen. Amen. Amen.

 

Would Boeing tell new pilots to read a book on flying a 747 and then stick them in cockpits?

 

Would you read a book on Judo and tell someone, "alright now, come at me with that knife."?

 

Would you read a book on how to play guitar and expect to cut a record when finished?

 

You can learn from books, tapes and seminars but nothing replaces practice. If you can't afford a real-time datafeed and simulator, at least find a free delayed feed and paper trade. Practice, practice before you step in the ring against the world champions of trading.

 

Nicely said. Practice makes perfect. There is no other teacher in trading other than experience.

[Wallstreet 10]

Practice is without doubt important but the educational resources should not be taken lightly either. These after all arise out of the experience of the trading knowledge of the author and why not make a good use of a prior experience. Of course, it should not make one adverse to experimenting one's own ideas.

[Agora 10]

Thank you. I have looked everywhere for some good tape reading educational materials but failed to find any. Can you recommend any books?

 

 

Graifer's book is more about chart reading than "tape reading." Although I'm not sure what everyone's definition of "tape reading" is. I've trained myself to read the bid/offers, pace of print, spreads, size of prints on the NYSE issues but they're changing as of this month to a hybrid market so things will change.

 

Here are several books that have pretty comprehensive explanations of "behind the scenes" strategies of market makers on Nasdaq stocks:

 

Jae Yu, "Electronic trading" (best one, I think)

Etzkorn, "What works in online trading"

 

BTW, tape reading is tape reading, is tape reading. Meaning in a broader sense the vehicle doesn't matter. I recently compared notes with an E-mini trader that reads tape and his approach and thoughts were very similar to what I do on the NYSE. Although the finer points, such as execution, actual physical possibilities and differences dictates what is and is not profitable in one environment vs another - I imagine.

 

One word of advice, tape reading, I think, is better suited for "scalp" type trading, as it gets you too myopic at times. You get so involved in figuring out the subtle nuances of each action that you often lose the bigger picture and end up over trading - unless scalping is your strategy. Although sometimes you can figure out that there is a large buyer/seller behind the scenes and ride his coat tails for several points. But than again, you don't need tape for that, just look at the charts.

 

As for quitting, that depends on how much you want to do this. There are many that have taken years to become profitable and finding an approach that speaks to them. Meaning, something that they can feel comfotable doing. There are different time frames, different approaches and different vehicles, any one of which maybe suitable or not for an individual. The hardest part is matching your inner personality to something that allows you to feel comfortable doing. It does not take any special talent nor skill or brains, it's whether you can find a niche that you intimately understand.

 

Good Luck!

[feb2865 10]

Some advice here from an old dog

 

Newbies has this tendency to look for this formula (I am not necesarily talking about the holy grail) that will make them comfortable and will give them confidence about what thier doing. That's why the switch from Fibbonaci, to RSI, to Stochs, ect ect etc. At the end they're frustarted because they don't know what they're doing. This is the point where they start to blow off their accounts.

 

Even losing in paper is frustrating becuase you lose confidence not only in the market but within yourself. The problem is that they rely blindly on that formula, indicator, marker, etc whitout knowing what's really happening on the market.

 

"When the RSI have a divergence with price, you sell/buy"

 

or "when the market bounces off 61% fib level you buy/sell"

 

They take the signal and most often than not, the market turns around against them. Sounds familiar doesn't it??

 

Don't quit. Just stop trading for a while Please forget about tape reading, market profile, moving average crossovers, I mean...no strategy no technique...nothing

 

Clear off your charts. You're going to draw two horizontal lines. Up/Down. Up for the uptrend and down for the downmove That's it Use lower time frames. I'll suggest 2 and 5 minutes. After a while put 30 minutes charts to see the trend for the day

 

You're going to look for how the market accepts or reject certain levels(area) during the day

 

Check in what area(not price) the market loses steam. Then reverses. Place a line in there. Practice that for a while. check 'n see how many times the market went back to that area. Now the market went to another area (shifted). Then look to where it stopped and lost steam. Also check how fast/slow the market reach to that area. Look for correlation between time frames.

 

Soon you're going to see that there's a "bracket" in your charts rigth??

 

well, check if the market breaks this "bracket" and see how it goes

 

 

Please don't put a time table over this practice. You have all the time of the world and nobody is pushing you............... Relax

 

Now seems that you know what's happening rigth?

 

You're opening the market chest and watching how the heart beats. Before, you had no idea. You know there was a heart pumping. Now you see it

 

Very soon this practice will start to make sense to you and when that happens, incorporate daily pivot points. Then you take it from there.

 

Take your time. Like I said before...relax.

 

Again, don't trade. Don't even paper trade.

 

Markets are based on laws of supply and demand. That's the real core. You're just watching when these forces shifts.

 

Stop forcing you to be succesful in the market. I assure you that will cripple the ability to understand what's going on. It's good , well I should say, it's necessary to have a drive in order to be succesful. But here you need a "controlled" drive. You'll get that with experience. Don't worry, you'll make it

 

Souldtrader has a wonderful site . Stay around. Ther's plenty of wonderful and experienced traders here willing to help.

 

Don't put a time table in your learning process.

 

I have the feeling you've just read many books, articles about tthe markets, how to trade, etc.

 

If it's so, stop reading. You don't need more technique. You need practice and patience. I suggest don't even come close to tape reading. Not yet. Tape reading is diffcult and traders outhere are in conflict on how the tape should be used. You don't need more confusion. You need clarity so you have a free mind and be able to understand what you're doing.

 

Sorry for the long post

 

Regards

 

Raul

[Soultrader 12]

Wow feb, you just made this thread into a "Great Thread". I agree with your approach in learning the markets. New traders will find it hard to incorporate advanced strategies of pivots or market profile before they actually understand the auction of the markets.

 

Traders must understand the law of supply vs demand and learn to view the markets from a bigger picture. Many traders get too caught up in the fast action in day trading that they completely miss observing for balance vs imbalance. Once you understand price action, then you can apply advanced strategies into your trading methodology.

 

Price action is pure. If you learn to trade with price only, you will always stay in this game. Learning to trade with indicators alone is a bad way to start and you will always be clueless on what the markets is telling you.

 

When I first learned how to trade, I used no indicators, no pivots, or market profile. I simply watched a 5min candlestick chart with price only. I watched for support/resistance to understand price acceptance vs rejection. After months of training I was able to understand price action. The time I dedicated myself to this has paid off for me.

 

Trading takes determination and passion. New traders often rush from promises of the quick buck. There is no such thing as easy money in trading. Learn, practice, experience. Craft your skill gradually and improve on it day by day. Keep a journal and write a business plan. I remember when times were tough for me.... passion and ambition helped me push through to the next level.

 

If you want to succeed in this game, you need the mind set to do whatever it takes to succeed. This even means transforming your conflicting beliefs and changing your mental makeup. You need to set yourself apart from the hundreds of thousands of losing traders.

 

Good luck.

[Reaver 10]

OUTSTANDING POST FEB!

Wow, like Soultrader said, you definitely stepped the thread up a notch or two.

 

Excellent advice.

 

 

Some advice here from an old dog

 

Newbies has this tendency to look for this formula (I am not necesarily talking about the holy grail) that will make them comfortable and will give them confidence about what thier doing. That's why the switch from Fibbonaci, to RSI, to Stochs, ect ect etc. At the end they're frustarted because they don't know what they're doing. This is the point where they start to blow off their accounts.

 

Even losing in paper is frustrating becuase you lose confidence not only in the market but within yourself. The problem is that they rely blindly on that formula, indicator, marker, etc whitout knowing what's really happening on the market.

 

"When the RSI have a divergence with price, you sell/buy"

 

or "when the market bounces off 61% fib level you buy/sell"

 

They take the signal and most often than not, the market turns around against them. Sounds familiar doesn't it??

 

Don't quit. Just stop trading for a while Please forget about tape reading, market profile, moving average crossovers, I mean...no strategy no technique...nothing

 

Clear off your charts. You're going to draw two horizontal lines. Up/Down. Up for the uptrend and down for the downmove That's it Use lower time frames. I'll suggest 2 and 5 minutes. After a while put 30 minutes charts to see the trend for the day

 

You're going to look for how the market accepts or reject certain levels(area) during the day

 

Check in what area(not price) the market loses steam. Then reverses. Place a line in there. Practice that for a while. check 'n see how many times the market went back to that area. Now the market went to another area (shifted). Then look to where it stopped and lost steam. Also check how fast/slow the market reach to that area. Look for correlation between time frames.

 

Soon you're going to see that there's a "bracket" in your charts rigth??

 

well, check if the market breaks this "bracket" and see how it goes

 

 

Please don't put a time table over this practice. You have all the time of the world and nobody is pushing you............... Relax

 

Now seems that you know what's happening rigth?

 

You're opening the market chest and watching how the heart beats. Before, you had no idea. You know there was a heart pumping. Now you see it

 

Very soon this practice will start to make sense to you and when that happens, incorporate daily pivot points. Then you take it from there.

 

Take your time. Like I said before...relax.

 

Again, don't trade. Don't even paper trade.

 

Markets are based on laws of supply and demand. That's the real core. You're just watching when these forces shifts.

 

Stop forcing you to be succesful in the market. I assure you that will cripple the ability to understand what's going on. It's good , well I should say, it's necessary to have a drive in order to be succesful. But here you need a "controlled" drive. You'll get that with experience. Don't worry, you'll make it

 

Souldtrader has a wonderful site . Stay around. Ther's plenty of wonderful and experienced traders here willing to help.

 

Don't put a time table in your learning process.

 

I have the feeling you've just read many books, articles about tthe markets, how to trade, etc.

 

If it's so, stop reading. You don't need more technique. You need practice and patience. I suggest don't even come close to tape reading. Not yet. Tape reading is diffcult and traders outhere are in conflict on how the tape should be used. You don't need more confusion. You need clarity so you have a free mind and be able to understand what you're doing.

 

Sorry for the long post

 

Regards

 

Raul

[torero 10]

We sure miss feb! Hope he comes back.

 

If you really love the market, you're willing to do it for free? I paper traded for a year without thinking if I was going to make money. My only idea was to understand the market and eventually with luck and readiness I can start trading for real. Money should not be part of the equation, it's an afterthought. If you think about it before, during, and after the trade, you're off to a wrong start. Believe it or not, it's not about the money. It's the whole irony that makes most of us lose in the markets. If your surgeon think about how much he's going to make on your operation and not about saving your life, you'd think twice right?

 

Take some rest and see if this is what you really want to do, write down 2 columns with pros and cons, and see if it's what you really want to do, even if it's for free. If you do decide to go for it, think of it as an internship, no pay, just learn the ropes until you're ready to be hired as a fulltime employee.

 

The other thing is a couple of months is very little. Took me a few years to break even. Lots to learn, relearn, develop, redevelop, define, refine, repeat, etc. All these takes time.

 

Good luck.

[redlew 10]

Newtrader,

Some good advice from the others here. I would add that my trading improved a lot when I came to the realization that I was looking at indicators because I wanted to be told what to do. When this line does this, then I should do that. The problem there is that all those lines are generated from the past price action and really just tell you what you should have done, not what you should do now. A trader is just one auctioneer amongst many other auctioneers, and all are in a two way auction. So your job is to try to find what value is in the market you are trading. In other words does the price want to go up or down? And then try to position yourself accordingly. I got away from all the high powered computing and started to study the people who first figured out what really constitutes a market. Take a look at the old guys. Richard Wyckoff is my favorite.

[torero 10]

Agreed redlew. Those old guys are the real gurus of the market! Why? Even if they're not around anymore their books are still selling. It only validates their methods, and they are still valid in today's markets and that says alot without marketing machines.

[Soultrader 12]

I agree. They are the original market thinkers. Every methodology that you learn today is just a altered version of the old timers. Humprehy Neill is one of my favorite teachers... these guys used simple methods and made a killing in the markets. Which is why I like to keep my trading simple as well.

 

Grab the entire Frasher Publishing collection... its pure classics.

[Reaver 10]

It's just like in the military, when you are trained, you are trained using very simple methodologies. In close quarters combat for instance, what you learn is basically to strike a target such as the nose throat or groin instead of some fancy spin kick cartwheel maneuver. Why? Because when the {crap} hits the fan, you have to be able to react and not let your mind get delayed from thinking what to do. -Slow is smooth, smooth is fast- Everything is has to be as hardwired as possible, meaning keep movement efficient and smooth and not too fancy (unless you're on a movie set). I think the same thing applies in trading. You don't want to have to reference 30 indicators or try to pick apart 20 different fibonacci lines,etc You may get confused, even if you know what you're doing...sometimes you have what we used to call a brain fart, or experience what Marty Scwartz used to call "The Sunspot Factor" which means you willjust completely do something irrational even though you otherwise wouldn't have.

[dementyia 10]

Wow, just wow.

 

I think this is the thread I've been looking for. Simply amazing!

 

I'd say I'm ready to open this up and see how it really works now. *grin*