Serious newbie in search for knowledge

Discussion in 'Professional Trading' started by c.chugani, Aug 6, 2006.

  1. Hello everybody.

    I am new to Elite Trader as well as to Trading in general.

    However, I have extreme interest, passion and determination to learn this profession.

    I follow the markets, the news, etc. and already have set up an account with a brokerage firm.

    I am also reading whatever free educational content I can find on the internet related to intraday trading of stocks and warrants.

    However, I lack experience and knowledge in the finance industry. I am 22 years old and currently finishing my Master in Marketing.

    I plan on pursuing online Trading as a profession and for a living.

    Could the experts on this site recommend me some essential books to buy and online courses I should invest in before jumpling blindly into the markets.

    Thanks for all your much needed help and advice in advance.


  2. WarEagle

    WarEagle Moderator

    Hi Chirag,

    There are very few traders that are "naturals" and are succesful right away, so make sure going in that you are prepared for a very long and expensive journey. Get your degree and find a job that you can be happy doing for awhile as you go through the learning process. You will need a source of income because its unlikely that you will generate it from trading for quite some time. Save, save, save. Do not quit your job until it is costing you money not to.

    As for books and seminars, in my experience there is nothing out there that you can't learn from a book available from the local library (if you are in the US, there is the interlibrary loan which is a great resource). Books will only teach you the fundamentals of trading, like the importance of money management or the mechanics of various markets, etc. You will read about a million different techniques for trading, most of which, when tested mechanically, are long term losers. There is no canned trading system that will lead you to fame and fortune, you will have to develop your own over time and much trial and error (hence my advice to get a job you are happy in for awhile). Finding a working trading method is like finding a mate, what is compatible for one will not work for another, so don't base your evaluation of an idea on how someone else trades it (good or bad).

    There is no holy grail (a method that leads to guaranteed profits forever) and don't be fooled by any vendor that tells you otherwise. If they had all the answers they wouldn't be peddling courses but instead would be trading from the deck of their yacht in the Virgin Islands. You will find a few truely generous people out there willing to help you if you look hard enough, but always keep a skeptical eye on anything for sale. You will never find a method that is right 100% of the time, so don't waste your time trying to find it, otherwise you will spend years trying and tossing idea after idea looking for perfection, probably throwing away the things that will make you successful in the process.

    I don't expect you (or any other new trader) to follow this advice because I was once in your shoes and I didn't follow it either, lol. But I wish I had. It would have saved me a lot of pain (and money) early on. The main thing to remember is that this is a marathon and not a sprint, so be prepared for the long road as best as you can.

    Good luck to you.
  3. Chirag,

    Make sure to check the CME and CBOT's websites as they have some very useful FREE things there - recorded seminars, PDF's, etc. Some of the things they cover on those sites are being promoted by trading educators for thousands of dollars.

    As for books, you will have many to choose from out there... some good, some not so good. I would start with ones about market psychology. I think that is more important to learn about than technical analysis.

    Some recommendations (sometimes the links don't work since they are so big, so I made them tinyurl's to be safe): - TRADING IN THE ZONE - THE DISCIPLINED TRADER - COME INTO MY TRADING ROOM - STUDY GUIDE FOR TRADING ROOM - TRADING FOR A LIVING - STUDY GUIDE FOR TRADING FOR A LIVING


    Good luck and welcome to trading!
  4. Wow.

    Some really helpful people on this site as I can see!

    Anyways, just wanted to thank you for the advice. I plan on getting my degree and apply for some well paid job.

    I also am determined to keep away a substantial part of my salary which will be destined for trading (although I will lose it, I will be able to gain much needed experience in the markets).

    I can afford to keep aside a modest amount of money from my salary since I still live with my parents and am not planning on settling down on my own anytime soon.

    I therefore think this is the ideal scenario for me to harness the skills and acquire the fundamental knowledge needed to make trading my lone source of income in the future.

    Regarding the books, I live in Spain. I shall be operating on the IBEX-35 (spanish stock exchange) and the MEFF (spanish market for options & futures).

    My concern then, regarding these recommended books, is whether I can apply their criteria to countries & markets other than the US.

    Since most of these authors provide easy to understand examples of the NYSE, S&P, NASDAQ, etc. etc. I was wondering whether these same methods & advice can be applied to the Spanish IBEX-35.

    I'm sure the principals are the same, but the technicalites such as taxation, market regulation, etc. etc. will be way different IMO.

    Finally, I was also wondering whether there are formal official universities or institutions which provide degrees focused solely on the subject of trading.

    Are there any online courses which teach you how to trade, what tools you need to trade, when to start trading, etc. etc.?? Master Degrees based on corporate finance, banking & business administration arent exactly what I am looking for.

    I was thinking more in the lines of any online course or university degree that specializes in trading the way daytraders, swing traders, position traders, etc. operate and make money from the markets.

    Any thoughts & further advice?

    Once again, thanx for the highly appreciated advice.


  5. BCE


    This is a very good list of books. Most of these are the top books I would recommend also. But you'll only really learn about trading by actually trading. Trading involves learning about yourself and your own psyche, to a large degree, in addition to learning about the markets and how they work. You couldn't learn how to do brain surgery just by reading some books or online articles. Good luck to you.
  6. I most certainly agree.

    Anyways, of all the books listed on this thread: which should be my FIRST purchase.

    Kindly note I am a total newbie to this profession and the finance industry in general.

    I currently need a book that DOESNT focus on advanced tips and other minutia, but can rather give me step by step recommendations and strategies (which are easily explained and can be understood by any interested beginner).

    In other words, a book which might be too basic for the pros on this site might be exactly what I currently need.

    Please note that although it should be basic and easy to understand, it should be able to cover most topics and most facts/myths about this world (ie. it SHOULD NOT lack content or feel incomplete).

    Thanx again.


  7. I agree.

    But rather taking the expensive step of learning (or to be more precise: gambling) at the expense of my own personal account, I prefer to study the markets and resort to reading and paper trading.

    Any good paper trading programmes / simulators that are synched with real time market prices?
  8. I agree its good to do some reading and learning about the markets before trading for real BUT you can only read and paper trade for so long. Only real, live trading will do the trick. The key is to start very small and work your way from there.

  9. BCE


    Interactive Brokers, refered to as IB in these forums, has a very good paper trading program that lets you trade with the exact same software, Trader Workstation, TWS, as you would from a regular account. But you need to open an account there to have access to it. They give you $1 million to trade with and you can reset this if you go through that (unlike your real account - that would be nice wouldn't it? :) ) Plus they let you trade most anything that trades electronically there. A lot of people here use them as their broker. They also have a demo trading program but I think it doesn't use realtime quotes. The minimum to open and maintain an account at IB is $2,000 US.
    BTW I agree with Steve and you that reading can be useful and online info can be useful too. That's why we spend time here. But actual trading is where you really learn. And not random trading. It's very important to really think about and just observe really what happens when you do trade. What were your objectives? What were you thinking before and during the trade? How did you react to what happened? etc. A journal can be very useful altough it obviously takes time and energy to maintain one.
  10. Chirag,

    As mentioned before by several wise traders, capital preservation is your utmost priority during your introductory learning stages. You will, however never cease learning--it is continuous---if you're serious.

    Decide what instruments you wish to trade, such as stocks.

    Learn their behavior and browse through the advances and declines tables at one of the free charting websites.

    Learn how to read charts, study them as though your life depends on it. Use very few technical indicators if any.
    You'll waste alot of time looking for "the one."

    Ask yourself questions such as why did this stock move? News, rumors, hot sector? Why?

    Could I have seen this from the charts?

    Why the hell did it tank the next day?

    Why did xyz stock with terrible financial run like crazy for three days?

    Look for common denominators.

    Did I mention you need to study the charts?

    Go from big to small time frames,max years of history with monthly, then weekly, daily and minute charts. Now reverse the process.

    Whatever interface you use to execute orders, know it inside and out. Perform drills of quick executions.

    Avoid chatrooms where they give stock picks.

    Don't listen to analysts:p

    There is no holy grail so don't waste time looking.

    Find your own edge and exploit it.

    Pick a stock that is heavily traded, maybe buy one or two shares on a dip or where you think a low may be then try and flip it for a small profit.(This is really how you learn)
    Roll up your sleeves as get dirty but with a very small commitment of funds. (Beware cheap stocks like otc and pinks.)

    Don't get greedy, just be patient, there will always be another set-up.

    Don't subscribe to expensive news letters and programs you'll just be constantly confused and changing your approach.

    Learn how to read charts!!

    I thought I'd borrow this: (snip) "The main thing to remember is that this is a marathon and not a sprint, so be prepared for the long road as best as you can." --WarEagle

    Wish you the best.
    #10     Aug 6, 2006