Sometimes MACD works, sometimes MAs, sometimes price patterns... Nothing is 100% But I guarantee, that lacking the criteria or willpower to admit to yourself that you are wrong, that you will go down hard. That does two things for you. It keeps the losers reasonably small. And it grows your confidence. If you are a discretionary trader, confidence is your bread and butter. If you lose confidence by allowing yourself to get scared from large losers or a large series of losers, then the game is more than half over. Start small, gain confidence and the account will grow accordingly. Albert
Since I misunderstood you: I prefer walk-forward testing; no better way to find out if something will work NOW. Not to mention that back testing is far from perfect, albeit still helpful. Develop systems based on your thought processes and test them in the present, then my previous post comes to life: Think big, start small. Small meaningless positions slowly evolving along with your method to larger; eventually meaningful size. Ultimately the strategy must be something you believe in/feel comfortable with. I will not likely ever be a scalper for instance, as I cannot for the life of me calm my nerves enough to do it. I trade options almost exclusively (good feelings), therefore I believe I have the best chance for long-term success. Puffy was wrong, it's not all about the Benjamins, it's all about the psychology.... 1) Walk forward testing is easier, less time consuming (I believe more relevant) 2) Quite possibly as a result, more accurate in today's ever changing landscape 3) Might be considered more exciting 4) Doesn't require expensive back testing software Just some food for thought D
Essentially yes, paper trading current market conditions. This type of analysis can occur in real time with software recording results, or cheaper yet, with a trader who is very honest his (herself). Believe me when I say, I love all the toys and gadgets, and perhaps many live and die by them. However, I am convinced that a majority just tend to attempt to make things far too complicated than they need be. It's more fun to think about and try to develop the holy grail than it is to actually trade and lose money. So many get lost in the haze of indicators and toys; include me in that. Pay for them (expensive services/indicators) to make your life easier, not to be the answer, > 51% will end up disappointed. This game is as much about saving money as it is about making it. Hate me for saying this: Each significant additional cost is like adding another zero to the Roulette wheel of trading. Now, if these tools are available to you for free, knock yourself out
if i were starting out new and had the benefit of fred bloggs advise, i'd forget trying to be a hero and trading high volatility index or currency futures or stocks for all that 'easy money' u c on a chart. instead, id listen to good ol fred and look at the fixed income futures (bonds, eurodollar, notes etc) this is because value on fi - or the perception of value is fixed and almost certain (in any given day) creating more equilibrium than 'hero' futures where no one can really tell you what true value is, when, where or how. in other words there is persistency and more confidence in a fi move. once youve learned to trade in 'slow motion' on the fi futures, you can then speed things up on the index futures, then after youve learnt that, you can drop a gear, put your foot down, and trade fx futures. BUT if youre making sure money on fi - why would you want to go to the index? just increase your size on fi and have more control of your risk. as for platform - it just dont matter. if you cant trade, you cant trade and no platform will save you - not even if it has backtesting, bells, whistles etc. ok - flame me me i dont care
Good thread. I got caught up in this one so I had to post. I'm newer then new to trading but have similar questions and ideas as jaronimo. Here's my thoughts to building a system that I've taken from books, posts on this forum and job experience. Set Goals - Develop Plan - Implement Plan - Analyze - "tweak" plan" - Repeat Set Goals How much do you want to start with? Do you want to take money from the market daily? Weekly? Monthly? How much money is enough (the answer to this one is "there is never enough" but if you don't set your win/loss limits you're surely dead) Develop Plan Trade stocks? If so, what price levels? (this maybe a formula of how much you have divided by how much you want to make given a time frame) What indicators or facts about a stock lead you to buy or sell it? (I think this is the most controversial and important question - for which I'm looking for the answer also) Implement Put some money in an account and trade. STICK TO PREVIOUSLY MENTIONED PLAN. DO NOT WAVER. If you do, record it so you can analyze later (or kick yourself) Analyze What worked? What didn't? Where/when were you profitable? Did you waver? Were you comfortable during the process of trading? Any heart attacks? Could you sleep? Do you still have a home and enjoy trading? "Tweak" Make changes based on research into similar issues found by others. Make changes that allow you to sleep and enjoy trading. Repeat This maybe absolutely off base and naive. I selfishly posted this on your thread so I could put my own ideas on "paper". This is my own process and by sharing I finally wrote it down. Now I can spend the next year filling in the details, testing and reading before I begin to trade for a living. kcmike