I've been trading live off and on for about three years and I'm in-between jobs currently and looking to trade full time and really make a go of it. I have other sources of income to meet basic living costs so no pressure there. I feel like I've been trading for years and don't have the first clue on how to find an edge in the markets that I can trade consistently. I'm willing to put in the time and effort and would like to seek a mentor that can help guide me. I've been taken advantage of twice by crooked internet trading "gurus" so I'm done paying big upfront costs. I am willing however to pay a monthly fee or a % of profit split. If you are profitable and willing to teach me for compensation please pm me. I would like to see some proof that your trading style works and I imagine we would want to have a few conversations prior to any agreement. Thanks in advance for your time.
Contextual filters are what helps you avoid chop and catch the stronger directional price swings. The way I developed contextual filters was to first “eyeball” the price action leading into significant directional price swings to see if I could identify any patterns that occurred more often than not. A pattern in this sense could be a price action pattern (such as an M or W formation, commonly called a 1-2-3), or a relationship of current price to the overall price environment (proximity to a previous day’s key level, or to a trend/channel line in a higher time frame, or to the range of a price bar in a higher time frame, etc). Then, I’d perform a thorough statistical analysis of favorable and adverse price excursions surrounding these patterns to determine whether or not my “eyeball analysis” had any merit. If you're willing to put in time and effort, study charts carefully and find technical reasons why price stops at a level and turns the other way. Find technical reasons why in a trend more often than not price stopping and turning the other way is an opportunity to enter in the direction of the trend, not a reason to put on a counter-trend trade. Find the patterns that trigger enough fear in trend-followers to cause most of them to take profits, thereby resulting in a trend reversal. You can find the reasons by looking back in time on the chart. Rarely does price find support or resistance and turn the other way randomly. There are too many algos trading these days for such randomness. Thanks to programmed trading, there are things that happen often day after day. If you eyeball the price action surrounding strong directional price moves and turns, especially on a smaller chart (for example a 1-min chart if you're using a 5-min chart for your main trading ideas), you'll start to see certain things happen over and over again. If you can't see any of this, then it would probably be wise to read Al Brooks or Bob Volman for ideas about this. If none of that helps you, then I doubt a mentor would be helpful either.
It's really simple: Find someone who had success in the market and copy from him (or read their books). If I could start over, I would tell myself to memorize William O'Neil's how to make money in stocks and Nicolas Darvas' how he made $3M in the stock market. That's all there is to it! (Do you know how many cup and handles happened on the NASDAQ this year alone? More than five: CNET jan, ADHD jan, ONCY feb, NYMX march, MELA march, DSKX apr. And on the AMEX: AST march, and at least a couple on the NYSE)
I second this answer. Try reading Trading for a Living by Alexander Elder for a beginner to intermediate course for trading. It has many good trading systems and techniques which can be useful. And if you are really serious of getting good in trading then i will also recommend Al Brooks. His books may be a hard to read first time but his video course will definitely give you the edge you seek. But again its very very detailed price action analysis, which is actually price behavior analysis. And it works universally on all charts with sufficient volumes. Cause its the actual analysis of price behavior, based on which all indicators are derived and created. So if you somehow manage to grasp the concepts that Al Brooks teach then you will see the edge shine automatically on every charts and timeframe. Just by learning MTR ( Major Trend Reversals), Two legged moves, and Wedges you can start making a good living out of trading. But there is a whole lots of concept to learn and a huge breadth to cover in order to get really proficient. Anyways, may you find your edge in trading. Good Luck.
Thanks for the responses so far. Nodoji, could you let me know which book you recommend to read first? Lawrence, looking forward to finding that strategy that fits. Fx, I read O'Neils book years ago and really enjoyed it. Thanks for the suggestion.
The problem I have with Al Brooks is he's never publicly stated how much he's made in the markets (or at least not to my knowledge). O'Neil and Darvas are/were confirmed market millionaires. Plus, some of the stuff Al Brooks teaches you like buy on pullback near MA could get you killed... You just have to take my word for it, ALL bullish setups in the markets (where you buy as the price breakouts) are either an O'Neil or Darvas setup 100%. I've never seen anything else! There is the third type where you buy at a new 6-month low, essentially bottom fishing. That stuff nobody has ever taught in a book yet and one I'm only beginning to understand. (P.S.: The only thing I've ever used in my trading strategy that originated from Brooks is to look at the MA20 only while ignoring all other indicators. Even then I hardly pay attention to this line but rather the candlesticks!)
Its funny because Brooks also says that if you can make 1 ES point a day, then you can trade 100 contracts, and extrapolating, I think he shows the math of how you can make 1 million a year. But my god, 100 ES contracts... are you kidding me to only make 1 point? So its hard to really put 100% faith in this. If he is actually doing this, he should say so, and if he is just showing the math of how this could work, how can we believe anything else he says? In fact, I think its difficult to have any faith in what anyone is saying because nobody is showing the complete picture. I highly doubt Brooks is trading 100 contracts hoping to make 1 point, but of course given extraordinary analysis, he clearly knows something... but why he would give out advice like this is beyond me. The other thing is that all of these things shown are very market dependent. Yes, price action seems to all look the same, but when it comes down to the nuts and bolts of entry, stop, and exit, this changes greatly for the market, and also perhaps even for the day. These past few days are of course a perfect example where if ordinarily my screen might be set up to be 30 NQ points wide, I now have to compress it 5 times to allow for viewing 150 point trends!!! So my point is that all of these books, as great as they are, only get so far. They all offer great ideas, but they are just ideas. Even if someone says they are going to buy the low of the day if price ever gets down there again.. what does this mean? Do they have a limit order to go long at exactly 4200.25 as an example? What if we come within 1 point of this level before reversing. Does this mean they didn't get in? Are they looking for some type of action to get in when close to this level? And what does close even mean? Perhaps they buy above the first 1 min bar that comes within 1 point of the LOD? What a stop.. where will that be? So even saying that someone is gonna buy the LOD is too arbitrary of a comment. I know that Brooks goes into quite a bit of detail, but many of these other books I don't think do. Now I'm not suggesting that they should actually give you a tick by tick play book, but taking an idea and then actually making it work is actually just as hard as having an idea to begin with. Anyway, my point is that unless you find someone who you can literally follow, even to the bathroom when they take a break.. LOL... it will be difficult to learn enough from them. NoDoji does have the right idea because she is very precise with what you need to see, but so much of this other advice doesn't come close enough for my liking. None of it might be bad, but its just not specific enough so you will ultimately have to build your own specifics.
I agree totally with what NoDoji said, but I like to think of it as a complete process. I used to get frustrated when the market would change, or my life circumstances would change and cause me to trade differently. And I didn’t seem to know what to do. I’d just keep trying various things. Some would work but they didn’t seem to continually work. Then I finally understood what NoDoji was saying as a process of learning from observing <--> back testing <--> forward testing <--> sim trading <--> live trading. And going back and forth as necessary until your stats carry across. And then if the market changes, or I change, or I see something new to consider adding to my trading… I just go back to the process and work it out. Part of what I’m saying is that I used to think at some point I would “get it” and then forever be a consistently profitable trader – without doing a whole lot more work. And I wanted someone or something to get me there. What I have now seems to be more of an ongoing process; there are plateaus but I don’t know that it will ever end. Handle123 has been trading for decades and says he still spends more time back testing than trading. So when you ask for someone to show you what to do… of course a mentor helps, books help, but a process may be what you need to understand and do. Then you work it out for yourself and own it.