I can't help but feel like I'm shooting darts with a blindfold on. I buy strong short weak stocks, but I dont' feel like I have any greater understanding of the market. i've gotten better @ self control etc, but still...how do you guys start to form a strategy? I'm not sure i get it...
Do what works for you. It took me a while, too, and I've just started trading. I'm already up 12% today and the day is still young. You'll find your niche, just keep at it.
I can't tell you what will work for you, but I can give you an idea of how it worked for me. I had the same question about how to form a strategy. First I determined what type of time frame I wanted to trade in. Then I read a number of books that had ideas and strategies in them i.e... Larry Williams - Long Term Secrets to Short Term trading Linda Braske (don't know the spelling) and somebody Connor or O'connor can't remember but it had short term strategies. Van Tharps - Trade your way to Financial Freedom. Alexander Elder - Trading for a Living or check out the book review section here. I used these as ideas for what to look at as to form ideas, how to analyze price and patterns for the time frame I am interested in. Played with thier ideas by changing settings and parameters or whatever. At one point I have played with every indicator in my charting package to watch what happens eventually threw most out. I basically comes down to time and effort and watching price and the patterns that evolve from the movement of that price. Make 'em pretty, Chris
My advice to all traders in your situation is to trade small, the smallest lot you can. Find a method, stick with it. Understand that it takes a lot of repetition to "get it". Backtest your strategy before committing capital. Those are the main ones that come to mind. Good Luck!
Read the Hedge Fund Edge by Mark Boucher, its one of the best books out there. Also Gary Kaulbaums radio program is good. Both of them have services via Tradingmarkets I believe, I am not in any way affiliated with TM. If you have specific questions feel free to ask, either here on in PM. I wont charge for it.
I need point out "do not try out methods or so called bullet proof methods. there is no such method. it is a fruitless search!" when I feel I am trading well is when I realized why I entered the trade, why I should get out of the trade, and why I should hold the trade, particularlrly importantly I knwo the reason why I should cut loss. I have various reasons (some are funbdamental and some are technical )to enter/hold/exit a trade.
Your strategy should be something you think you can understand. I started a thread called "breakouts" one of my fav strategies, however I had hard time getting out of my head that it was a BAD idea to buy the breakout, and instead wait for it to fall before getting in. I got both greedy and scared at the same time that I'd miss the move and wouldnt make as much money. I would say to myself: 1. If I'm bullish, WHY wait for the stock to fall before buying..it seemed to defy logic... however, like many on et have said before, trading is more of a mind game than anything, and breakouts are a great example of this. Emotion at its best. check out this chart ( http://elitetrader.com/vb/attachment.php?s=&postid=1370095 ). Breakout on feb 5th...The suckers who went long and held on..well we know what happened to them . Sometimes a strategy seems simple, especially when you read it in a book, because they dont bother to go into detail. the BEST thing you can do is to take screen shots of ALL the strategies you want to trade and watch for common patterns, and save these on your hard drive. You'll do better in your trading, even if just by a little bit. cm
That's a great example, I will try to take screen shots. FYI, I'm a daytrader and they really dont' teach me anything where I work. They just give me money and let me loose and while I enjoyt he freedom, it is the confidence that I'm having problems with. As with any gambling, without confidence you cannot win (of course with arrogance you will crash).