In this instance, I respectfully disagree. Read back through the entire thread if you are so inclined. I believe you will change your tune. New software is not the issue here. After seeking advice, he was told by several not to trade real money until he had a proven plan AND knew the software inside out. That is the purpose of demo software. Unfortunately, it wasn't what he wanted to hear, so he simply ignored it, and it cost him. He wasn't even gambling, he was simply tossing good money to the wind on a hope and a prayer. Neither have any place in trading. Furthermore, I can assure you he has no idea of the leverage he was carrying with 20 YM contracts. Nor did he have a sound reason for entering any of the trades. I hate to be harsh, but his mother should whip his hiney but good!! st
Stealth Trader, I am about to open an account with IB. I have decided to focus only on the YM to start. I have all day to watch the price action. 1. Is the IB simulator/TWS a good place to watch price action and paper trade? 2. Will I learn all I need to by watching the price move or do you recommend a source/book to help identify what I am looking for in learning to read the moves by price action? Hope my basic questions do not bother you.
The reasons I suggested IB are as follows: 1. Free real time demo. 2. You can trade most instruments from one account. 3. Free real time data including exchange fees. ($10 per month if less than $30 in transaction fees; exchanges fees alone with other brokers are more than twice that amount and not typically waived). 4. Most low cost/free charting programs are compatible with IB data feed. 5. Low cost commissions. Basically, using IB with a free charting package, your cost to learn is a mere $10 a month and you have access to most markets to get a feel and find what suits your personality to trade. Once you are ready to go live, you can then begin trading using a small amount of shares or contracts at very low cost per unit. I know of no other broker that offers so much for so little. The downside is, IB is a barebones broker. If you are the type that requires handholding, they are not the broker for you. Their business model is not "newbie" orientated, and is designed more for low cost trades with minimal personal contact with the customer. As such, their customer service is minimal. As for the charting IB provides, they are in name only. You would be better served to use one of the many free or low cost charting programs that are available. QuoteTracker is one of the more popular choices, but there are several others as well. To answer your question, for the reasons given above, I believe IB/TWS demo is an excellent place to begin your venture into trading. Others may chime in with how other brokers give better service or that Sierra, Ensign, Multicharts, etc. charting is superior charting, and they would be correct. However, for low cost, simplicity, a wide range of instruments to demo/live trade, etc., I am not aware of anything better suited for the purpose intended. And being IB is widely used by others, help in setting up or a question can be quickly addressed in either the IB forums, here, or many other trading web sites. As for books or source references, I am probably too far removed from the training arena to make solid suggestions, as none come to mind. In my opinion, many books regarding trading are written by failed traders selling their wares as a means to aid in their survival. I believe you would be better served reading material not related to trading in terms of human psychology and money management. If you cannot first and foremost manage your emotions and/or risk, you will not succeed no matter what method of trading you use. And that's a given. I've seen very little written about price action as a stand alone trading method, as most trading related "novels" are either about an indicator the author invented and is promoting, or simply another worthless spin on known methods that simply don't work but sound good in theory. One could suggest that failed traders write most of the books, and being few books are written on price action as a method, successful traders don't take the time to write books. Draw your own conclusion. I would suggest searching the web for drawing/charting trend lines. Skip over the sites that have something to sell with promised riches. Learning to draw trend lines and how they are formed will teach you how to recognize swing points and how to use those swing points to identify the current and past trend. Trend is shown by higher/lower highs and higher/lower lows. Swing/pivot points also identify support and resistance areas, and these areas can be identified by drawing either horizontal and/or trending lines along these points of interest. The first step is to learn how to identify these swing/pivot areas. The second step is to recognize which ones are of most importance. The third step is to know which of these areas will most likely hold or reject price and which ones will most likely be broken. Learn those three things and you will be well on your way to success. Trend lines are momentum indicators that can give a peek into the future. Many who claim to be traders never grasp that simple concept, and there is an entire camp of these people who deny trend even exists. The path to success in not in fibonacci numbers, moon cycles, canned indicators, waves, etc. Do these other methods work? Sometimes they do, many times they don't, "sometimes" being the key word. Truth is, each and every one of these other methods that so many cling to can be identified and more accurately defined on a chart using simple price action. The closest I have found to the holy grail is pure price. Establishing where higher highs, lower highs, lower highs, and lower lows form allows you to quickly and easily identify current trend, momentum, an outlook of future price, trade entries which allow stops to be placed outside the noise yet close enough to entry to provide excellent risk to reward values, trade exits, projected size of next price move, etc. Using multiple indicators to try and grasp this same information will only result in lagging and conflicting data at best. Iâve only given you a small piece of what I do and am looking at, but it will set the stage for expanding on a very simplistic yet rewarding trading method. Many will disagree with my findings and that is their prerogative, as well as whether you decide to follow it or not. I believe most find learning price action as being somewhat vague and difficult to master, and as such, they move on to canned indicators for visual stimulation and then convince themselves they are the key to profitability. In summary, understand that 95+% of traders fail. The majority, if not all of these individuals began by reading books by those as I have described them above. Need I say more? Good luck with your research. And by the way, it was no bother all! Hopefully, I haven't bored you with my long winded response. st
Thank you for helping confirm IB as a good place to start in learning about trading and watching price action as well as all the details on why they would continue to be a great choice to trade with. Thank you for your explanation of the first things to watch and focus on in price action. "The first step is to learn how to identify these swing/pivot areas. The second step is to recognize which ones are of most importance. The third step is to know which of these areas will most likely hold or reject price and which ones will most likely be broken. Learn those three things and you will be well on your way to success." Since most seem to never do the above, how many months should it take watching the price action before I should be able to do these three?
Good advice here for everyone, even those who have been around the block, especially regarding the holy grail issue.
Attention all new traders: You should study the remarks of Stealth Trader very carefully. Then, read them again. Then, read them again. (Get it??) This is a member who is offering you something that he should be charging you for; big time. Go back into stealth mode now, Stealth. You've revealed far too much already!!
I couldn't agree more. The OP needs to read and reread and reread his comments. ST -- you're to be commended for both your patience and the quality of your advice in this thread. Thumbs up.