Some excellent advice has already been given in this thread, so I will try to keep my input short and sweet. I would urge you to disconnect yourself from all scribblings in the public domain. They will only serve to pollute your mind during the early stages of the learning process. Later in your education you may find it beneficial to reacquaint yourself with the material freely available to the public so that you can exploit those that use it. You will be taking the other side of their trades. If you have the technical talent then I strongly suggest that you code up all your trading operations into a fully automated suite of applications. Buy a chunk of data for your chosen initial market from somewhere like CME DataMine and start your journey. That way you will be able to assess the validity of your market models with absolute objectivity. If you are successful in your venture it will also allow you to easily scale out your operations across multiple instruments as your capital grows. There is no need to employ complex statistical modelling. As an example, the algos I have developed use nothing more complex that high school mathematics. Once understood, the dynamics of supply and demand are intrinsically fairly simple. Whilst some quant funds do successfully employ very complex models there is certainly no absolute requirement to do so. Very wise. I have found that there is nothing to be gained from discussing trading with anyone who is not as absorbed by the markets as you must be in order to succeed. I genuinely believe that isolating yourself from any market related discussion with others is the best way to start the journey. That way you can clear your mind of any distractions and start to focus on the important questions. If you are to succeed then rationality and common sense will lead you in the correct direction. If it gives you any confidence, I was in a similar position to yourself a few years ago. After dicking around in the markets for a while I decided to dedicate myself to a prolonged period of full time research. I saved enough money to support my family for at least three years and we lived frugally whilst I spent the best part of two years at a desk by myself figuring out how the markets function and developing a system to fully exploit them. I initially funded a futures account with just $30k and have since grown that by nearly two orders of magnitude. It is possible, but only if you are prepared to make the effort required. Good luck!
Once again, thanks for all the excellent advice and words of encouragement. Okay, let me play this back then. In terms of immediate next steps the common themes among the useful and constructive posts seem: 1) Develop my own beliefs about a market by starting simple and studying the given market. Studying = âscreen timeâ analysing price and time information, making observations, asking myself questions âWhy is such and such happeningâ and over time coming-up with answer to those questions and so on. I should expect this 1st step to take many months or even years depending on how many hours/week I devote to this. 2) Detach myself from otherâs beliefs about the markets in order to reduce the noise and help with achieving (1) â in my particular case this means less reading of magazines, books, FX education services and so on . Once I have some âbeliefsâ I can then start thinking about any sort of system/method but thatâs really down the line. Would you say thatâs a decent summary of what my initial objectives should be or have I got it wrong? On passion for the markets & problem solving I am very interested in the markets and trading and do enjoy problem solving and analytical challenge. The few spurts of proper effort I devoted to this were actually really interesting to me. I was for example totally consumed by some NinjaTrader scripts for about two weeks few years ago. I know thatâs extremely little and whether or not I was spending my time in the most efficient way is a different question altogether, but nonetheless I did very much enjoy it and wanted everyone to leave me alone so I can work on my strategy. As mentioned before though I struggled to maintain this momentum once my holiday was over. Whether I am âpassionateâ about the markets I honestly donât know. I am not going to pretend that Iâve spent sufficient time on it to get a feel for that. On not trading: The main reason Iâve never done a single trade is that I promised myself that I would not make a single trade until I can clearly explain exactly why Iâm making that trade. I am nowhere near that at this point; hence why trade. I can quite easily open a $5k account and start trading. Even if I blow it up, Iâll save that money next month so it wouldnât be a big deal. But why do that? I agree with some of the points about having to experience trading with real money in order to work on my emotions, but I really think Iâm still far away from that. My understanding is that first I need at least some sort of a âbeliefâ, and a âmethodâ so I can at least answer âWhy am I taking this tradeâ. Am I wrong? On my savings, job: Thank you for all the words of warning. I can assure you that I will not leave my career easily, nor would I start risking my savings any time soon. I gave some of this info to set the context for my personal situation in order to get the best advice. I am not discouraged or scared by the â98% failâ statistics. This part Iâve known for a very long time as itâs in the intro of every trading book . I have no illusions about my ability to succeed. I genuinely Want to succeed and I hope over time I will prove to myself that I am prepared for the long and challenging journey.
Hi sdd80 I've been a trader in the futures markets for the past few years. The first thing I found to becoming a successful trader is finding a platform that best suites your trading style. If your a day trader looking to trade the electronic markets you need a strong fast execution platform where you can scalp the markets easily. (Be in and out of your position in a matter of seconds) If you your looking to be a swing trader and hold positions for longer periods of time, you may need a platform that has a great charting software that comes along with the execution side. There are many free platforms out there that offer demo accounts. Also, when trading these markets you must learn discipline and learn to take a losing day. That's where most traders screw themselves because many just don't know how to walk away from a losing trade and call it a day. When you can find the discipline in yourself and set yourself a daily loss limit that will help you because a successful independent trader. But before all of this you have to find strategies that fit you best. Which markets are you looking to trade, have volatility in it your comfortable with, how much of your capital are you willing to risk in a certain time frame, how long are you looking to hold your positions, etc? There goes a lot before becoming a self directed, career trader. But I'm sure you know that coming into this forum I hope this helped!
Yes - my question was why are the majority of people not self aware enough not to choose paths which they are not suited for and mature enough to follow through when they have made a commitment to do something. This means follow through properly to the best of their ability. Hence my admittedly poor analogy with the trainee doctor. Do we tell aspirants to other professions that perhaps it is hard, involved, and possibly uninteresting to them and therefore they should do something else? Or do we assume fairly that in expressing an intention to follow a career the individual knows something about what is required and something about whether they are willing and able to attempt it. You are quite correct in your last three posts that in order for the OP to succeed he must be other than bored with trading, and must be prepared to put the effort in. The broader point I was aiming at (and which admittedly was not well communicated) was that the question of the OP was "what should I do to become a successful trader". I think the answer to this is to ignore any gurus, market canards, what other people think he should do, sacred cows etc and just go to where the money is. Day trading futures. Specialise in a market. Devise a model, preferably quantitative, for taking net gains from the daily session. When developed, test, token trade with 1 lot, and if successful progress from there. I don't see truth or reality as "brutal". "Nothing either good or bad but thinking makes it so", yes? In fact what aspirants don't get around here is a dose of the truth when needed. I appreciate your intent to give an accurate appraisal of whether you consider the OP is suited based on your own experiences. I do disagree with you however on the future aptitude of the OP. The prognoses for all the morons who come on here trading their live accounts with some TA mumbo jumbo they read about on the web or a book a few weeks/months ago and some psychology cliches are truly beyond hope. All of these guys have passion coming out of their ears, and will happily make hundreds of posts a month here on ET. That doesn't mean they are going anywhere or doing any work which will produce them positive results. Add in that most really want to fail and be losers.... If this guy is prepared to take time away from work to do his research full time, doesn't listen to popular opinion about markets, learns to think for himself and applies the scientific method, he might know enough not to jack away his money until he knows exactly what he is doing in the market. He is financially secure enough to outlast a 3-5 year learning curve while living modestly once he is sure he is on the right track. Finally, anyone capable of making 200k-1m a year has at least something going for them - they are not strangers to the concept of achievement and success. Everyone is attracted to trading for the "grass is greener" aspects. The issue is whether one arrives without an understanding of the requirements of the job or the aptitude to perform such requirements. For the independent, one must be strategy development, analyst, execution specialist, and risk manager. Add to needing to be motivated, disciplined, a self starter, able and willing to work long periods in isolation etc. These factors should all be explored, however bottom line they are fairly obvious to most people who seriously approach trading and I don't think it is correct to discourage on that basis.
A few brief points. Your first sentence is excellent and has 99% of your competition beat right out of the gate. Well done to you, keep this up, and be true to yourself. Don't ever compromise and start trading with an insufficiently tested / understood method just for the sake of having a method. Apply your attitude of not making assumptions and investigating to find the truth to all your trading research and you won't go wrong. "I agree with some of the points about having to experience trading with real money in order to work on my emotions" You're not in a position to agree as you don't know. Your emotions are likely just fine if they are. If you have emotional issues, you need to work on these prior to trading but this is a separate product. The story of not being able to follow ones' trading plan is a story told and retold here on ET. If you took the majority belief here as gospel you might think that this applied to every trader. I can assure you that there are those, not few in number, who had zero or close to zero "emotional" problems executing a strategy which they had developed and understood. The common tendency in the market is for losing traders (this is most of ET) are reactive - they frighten themselves in and out of trades and look at price patterns and visuals on a chart without understanding what is going on. They become food and due to the errors they are making and the fact that they know that they don't know, they have all sorts of problems executing what wasn't a profitable strategy to begin with. If you are insufficiently cool and calm to execute live trading then this is probably not for you. I think there are indeed factors of the personality which are difficult or very difficult to retrain, and the source of the problem may not be fully understood. Don't worry about it. You can hire an execution specialist if you come up with a cracker but cannot trade it. There are other options. No need to start dicking around to see how your so called emotions hold up under haphazard uninformed gambling.
One of the most erudite informative and truthful posts I have seen on this board in a long time. I can recognize instantly that you get it. As you know trying to talk sense to newbie traders here is often like herding cats or trying to make water run uphill. Thankfully this thread has been largely undisrupted. You don't leave anything out and there is nothing to add in my view except a congratulatory nod from one professional to another in recognition of the hard work and dedication needed to get to where we are. Perhaps it is the case however that only a certain type of individual can succeed in this profession: I'm sure it didn't occur to either of us to do otherwise.
click this link: http://www.elitetrader.com/vb/showthread.php?threadid=228628 if u know the fail rates, then don't do it. there are other ways to become a career professional trader whereas the fail rates are 4 times lower than becoming an independent trader. I believe only 1% will choose the path to go to school and work at the big trading firms/institution. Those 1% will be successful. They are not lazy and will be laughing at small traders. They will laugh, laugh, and laugh thinking how low educated small traders are. More than 90% of small traders lose. They just lose! P.S $300,000 from personal saving is still consider small trader. A minimum should be $500,000
having enough money does not make a rookie successful. Think! need to go to school first ( MIT, Harvard, Yale, etc), work for a big firm, and finally become an independent trader opening a minimum $500,000. $5 million is most recommended.
Ok, it seems I underestimated your interest. Here then are some posts with my ideas on how to start trading as a beginner: http://www.elitetrader.com/vb/showthread.php?s=&postid=3018667&highlight=learn+trading#post3018667 http://www.elitetrader.com/vb/showthread.php?s=&postid=2816369&highlight=learn+trading#post2816369