Ok, I have been trading futures/commodities for a few years. Just went over to a direct access platform (Terranova Investor). I like many things about the platform but there are a few problems. So I am still looking. I am seriously considering opening an account with Tradestation in the next week or two. I like the idea of being able to backtest/automate trading strategies. I have never developed a trading strategy on a computer. Obviously if I am still trading after a few years I have developed some kind of strategy that works. My question is, if you were starting out now, how would you proceed? Obviously I am reading everything I can get my hands on. I am also picking up a lot from this site. What things, looking back in hindsight, have helped you the most? What was a waste of time?
Trading is so simple, and learning to trade is simple too. It is just that we tend to make it so complicated. There is only two things in trading, Make Money or Lose Money. The only way to really learn how to Make Money is to Lose Money. No one can tell you to do that or do this etc; yeah they can tell you those things but it will never sink in, like it would if you felt how it would be to be bulldozed over. So, you have to scrape up around 20K that you really cannot lose and jump right on in, and lose it all while trying to not lose it, and wonder and wonder why you lost it all and eventually you'll figure it all out.
I looked at what everybody else was doing, then developed a couple techniques that are pretty unique. It's a giant poker game in that there is not enough money in the pot for all of us to win. Many must lose so that a few can win.
If I were to start over, I would (a) avoid indicators like the plague except for simple scanning, i.e., an MA XO at market turns (b) avoid fundamentals entirely There's more, but these are the biggies.
Thanks a lot. I have lost money. I do know what that feels like. It sucks. Luckily I have made a lot more than I have lost. Partly because other than a few trades, most of my trades in the past have been very conservative. I would love to work on the trading floor! The only problem is my current job probably wont give me the time off to pursue that dream. Plus with a wife, kids and mortgage, it makes it hard to switch jobs when you are the only breadwinner. Are there any good trading floors in NYC? I live in NJ. I do like the comments about "trading is so simple", and "avoid indicators" and fundamentals. That is so true. Most of the best trades I made were simple. They just looked too good to pass up and afterwards I felt "is it really that easy?" Too bad I cant find those trades everyday. Yet. I do avoid fundamentals. I had a bad experience trading on fundamentals at the beginning of my trading experience. It was one of those "look at this news, its gotta skyrocket!!!". That hardly ever works. Plus I am a huge believer that all fundamentals are already factored into the price at least the day before I get to hear that news. Although I do have a theory that by trading only on price movements I am actually trading on fundamentals. My reasoning is that price is the only true measure of every fundamental factor, so follow the price and essentially you are following fundamentals without having to actually figure out what report/weather/FED/etc is going to make the price move up/down. If you had to list three things that you consider the most important, what would they be? I know so far my list would include, - cut the loses quick, and don't look back. (except to see why you lost money. I never feel if I lose money I have to make that market give it back to me. That only makes you lose more money. Don't trade angry) - I try not to think too much. (if it looks good, try it out ) - I go with my gut feeling. (sometimes my best trades have been done "just because it felt right". Not too technical, but then again I have no idea how my mind actually works.) I appreciate all the comments. I always love to hear who/why others trade the way they do. Please continue to add to the list. I guess I did not word the question correctly. What I was interested in was more along the lines of "If you were starting over today, trading online/direct access and setting up your own trading strategy such as on TradeStation, how would you proceed?" In other words, I have never written a trading strategy or back tested anything. Knowing what you know now, how would you proceed?
If you're not using indicators, I don't see the point in using an expensive platform. If you're trading price action, you're most likely going to want to do a manual backtest, and you can do that with anything. So perhaps the central issue is whether you're going to trade stocks or futures. If futures, the Sierra charting program with an IB feed is the next thing to free.
Seems like this thread was an 'accident', but I'll post my view regardless .. If I were to start again I would not buy any subscription to trading software nor would I open a brokerage account until I had discovered how to trade competently by: Not buying any 'trading books' (For the record, I never purchased any myself but I would say many aspiring traders have done because it is an 'easy route' to simply read a book) By finding out how the markets operate and what are its mechanisms. (This didnt even cross my mind when I first began, I jumped straight in, like everyone else, with preconceived conceptions of what a 'market' is, not that most bother even with this fallacious view.) By pondering and questioning absolutely everything from every possible angle, no matter how ridiculous the idea seems. For example, how many aspiring traders even bothered to question why they are buying a charting package? Who said you had to have bar or candles chart, infact who says you even need charts at all, did I ask that question? Nope! And by doing my own research, isolated from any other people trying to learn to trade. Meaning, not coming to ET or anywhere else to learn. A lot of the things posted in the above posts I agree with, but really they're "throw away" comments. Not to say that in a bad way, I'm merely implying that for someone reading them, they need to prove to themselves whether what is being said is true or not. I think if people really knew the work involved in cracking this profession they would not even bother, its far too daunting for most, but people arent driven to the stock market on rationale, but by a love of money.
I think I am going to agree with an earlier post in this thread or elsewhere: I feel that the best way is to ease in to trading today slowly with amounts that are simply too small to matter. Over time when one finds them self winning consistently enough, slightly increase exposure. Only when they are finding success and comfort (psychological relevence) at the new level, increase more... Eventually, if the trader is the real deal, they will find themselves trading enough size to make either a part-time or full-time living. Any other way is quite possibly wreckless as there is far too much pressure to succeed; more importantly far too much probability for ruin. This evolution is boring, but then again so (most often) is real calculated business endeavors. I know that no beginner wants to hear this (neither did/do I) but I feel it is necessary. It's a marathon, not a sprint my friend. Think big, start small D