"Trading in the zone" by Douglas. "Mastering the trade" by Carter. The book by carter IMO is a masterpiece, as it deals with all aspects of trading, answers most of the newbie questions and also gives plenty of examples of trade setups. Paper trading is not bad to get used to a platform but will in the long run harm you more than it will help. I know I will get plenty of bad blood for this (prop firms are usually viewed as evil on this forum) but I would strongly suggest looking into a prop firm. You pay for education and screen time as well as live mentoring and the cost overall is much smaller than trying on your own.... I've seen people go through anywhere between 30K and 5K in weeks thinking they can do it and when it turns out they can't the money is gone and for most this is where the road ends. Anyone suggesting options or even worse futures has no clue about how fast that can eat a small account. Basically when you start, whether it is with 5K or 10K, consider that the first year you will most likely lose it all, or best case scenario make nothing - if you use a broker that is not direct access without rebates and with high fees, it's a losing proposition.It's a matter of what you learn with the initial money, and how long that lasts you. Prop offers rebates (you can actually trade for free or even get paid for your routing) and when you become consistent you will get more buying power (that will by far surpass your initial contribution)... I would recommend www.Keystonetradinggroup.com take a look call and see if this may work for you. I trade there and can honestly say that I have made tons of progress. Best of luck.
I don't have any books to recommend, but I will tell you what worked for me. #1 PROTECT YOUR MONEY!!!! Don't easily give it away to the market or trading services. Be skeptical and very cautious. Don't trade real money until you are have a solid plan. When you do start, trade very small. Don't pay for any trading service unless they are willing back it up by showing a credible trading statement (99.99% of them won't and there is a reason for that). Knowing what I know now, I'm so glad I didn't waste my money on countless trading services. #2 Learn to identify trends using support and resistence patterns. http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=support+and+resistence. #3 Keep loser small and let winners ride. Trade with the trend. #4 Not all markets / stocks trade the same. Some markets are easier to trade than others (or at least for the style of trading that I do). Give different markets / stocks a look. Once you learn to spot trends using basic support and resistence patterns, you will be able to find good spot to try catch a trend using a small stop without getting chopped up by the market. It require patients and sometimes you will miss out on a good move, but that is ok, because there will always be another one around the corner. It is batter to wait for the right opportunity than to try and force it. Not a complete trading plan I know, but it is a start.
"you will be able to find good spot to try catch a trend using a small stop without getting chopped up by the market" I would rephrase that. Try to find a spot where your idea will no longer be valid, allow enough room for the market to prove that your idea will not work, while allowing enough potential for profit (unobstructed) so that the risk vs reward still makes sense. Risk vs reward is a very flexible notion, and does not have to be 3 to 1 to warrant a good trade....Lower is ok as long as the odds are high enough.... I think poorly positioned stops lead new traders to many errors, getting chopped out of good trades, or reentering the trade in revenge mode too late just to get chopped again.....So the trader had the right idea, the stock moved a point in his direction from entry, yet he is down half of that wondering wtf happened....I've done it enough...lol
Wow, really good job on rephasing my poorly worded comment. Thanks BartS. Another thing I did was stop reading any trading and financial web sites like ET, plus chat rooms. Focus on reading the charts and go with the trend that I see on the chart. Any distractions may cause me to lose focus on my trading. Not being able to edit previous messages is FTL, but I guess it makes sense considering some of the users here at ET.
BTW, I didn't mean to sound like a smartass, but instead wanted to emphasize that too small of a stop is usually the number one reason for losses....rather than the correct reason being the idea simply failed, which is perfectly acceptable. Sometimes I don't enter good trades because there is no "risk point of reference" to go against in the trade and even though the stock is going up I refuse to enter because it just makes no sense....until the next risk point is built such as a flag, pause or swing after pullback.... And I wholeheartedly agree, that news, forums etc are nothing but a distraction....the anchors at CNBC sound like schizophrenic lunatics with their big headlines from day to day....plain garbage, just as 99% of TV out there right now.
Hey Bart Just a thought to ponder Look at the bar just preceding the one your watching as a range â hence it becomes that ârisk point of referenceâ you're looking for... And as the preceding bar is now a range â then youâre simply trading a range B/O as price moves along its merrily way Sir See Ya RN
I didn't take it that way and my thanks was the real deal. In otherwords, I was not being sarcastic if that is what you might be thinking. You really did do a good job at rephrasing it. Lets face it, my comment was kind of half ass... LOL.
Waiting to trade the breakout is usually the safest way to trade the retracement. In other words, if the trend is up (pattern of higher lows), wait for the pullback, let price establish support and consolidate a little. ideally it will create a contracting support/resistence area aka a wedge pattern. Place a buy stop where you feel price need to go in order to break out of the wedge and re-establish the uptrend trend. Then place the stop where price is no longer reflecting the re-establishment of the trend. This is usually below the last price support area. Now once you get the feel for things, you can start to front run the break out in some cases. I won't not recommend it to new traders because they will get it wrong, but once you have traded this pattern hundreds or thousands of times, you well start to see when it is ok to front run it. Once again, I recommend waiting for price confirmation via the breakout of the wedge/contraction/consolidation. Using this method you can pretty much create a 100% objective trading method which allows you to focus on execution.
One more thing. Hmm. Kinda sad about the state of ET and Web forums in general that my well meaning comment and thanks could be mistaken for sarcasim. Reading it now, I can see how it could be read that way. And just to be clear, that is not a stab at anyone in particular, just a general comment.