Transition from Beginner to Pro Trader. How?

Discussion in 'Psychology' started by ePandit, Oct 27, 2006.

  1. ePandit


    I’m a fairly active trader. However, I still reckon myself a beginner who's spent a lot of dough on worthless systems, read a lot of books but who repeatedly experiences losses and hasn't managed to develop any good trading approach or system. Naturally, I want my trading to be more systematic/profitable than what it is now. Obviously, if this continues I’ll soon have to devote most of my time to “real” office work.

    Thinking about how to achieve stable & positive results and get through the beginner’s stage faster, I think maybe it's a good idea to give it a rest for a while and try to come up with new ideas, read more books, paper trade? Or maybe I should join a prop firm where I’m not alone plus I could compare my results with those of others. What do you think a newbie should do to trade like a pro?
  2. CTT


    I think a question you should ask is, where are you loosing money?
    Don't be in a hurry to get through the 'beginner' stage faster than you are able to, determine what trades make you loose money, and try to limit the number of times that happens. Stop trying to make money quickly and work on not loosing.
    Taking a step back may be useful for you and just watch the markets, paper trade, etc.

    I work with a prop firm and have been told that don't expect to be profitable for at least a year, there is a lot to learn, not only about the markets, but yourself.
  3. dac8555


    to be a pro...go to work for an institution. Yo will learn much more than being on your own.
  4. kiwi777


    Some guys believe that there’re no beginners and pro. Only ample, cognizant and boilerplate traders.

    “… there are several levels on which the trader can self-identify himself relative to the market. These levels are not just theoretical postulates but they are the reality one can observe – one of the levels “lives” in every trader, defining his relationship with the market, and, correspondingly, his reaction to market situations… each of the levels offers effective means and opportunities for achieving a trader’s goals”.
  5. i been almost three years since i started trading full time from home...

    it is a long learning curve...

    i still consider myself a beginner in many areas but the one thing i can not stress enough is that you trade small and learn from your mistakes...

    i still make plenty of mistakes...only bigger ones than before...

    that said i analyze what i did wrong or right and try to learn from it...

    one you get something that works...then build up units till you are comfortable with your progress..

    i have bumped my units about 5 times since i started...

    good luck and don't be in a hurry...
  6. Fractal


    To begin: analyze the trading you do already. Calculate your expectancy (how often you make a winning trade), then your reward:risk ratio (your average win to your average loss).

    This might give you a bit of insight into how you see patterns in market behavior. If you actively trade and regularly hit winners 40% of the time, but those winners are equal to your losers in $ value, then you might want to start thinking about how to pick out 2:1 reward:risk setups, while cutting out churn trades that might be generated out of boredom or frustration. Your emotional reactions to a loss tell you a lot about your own expectancy as a trader.

    It'd help to start thinking in these terms as soon as possible. While trading, your mind and results may feel like a mess, but over a month of analyzing that data you should begin to see regular patterns in your own behavior. Here is where you will begin to unlock how your own mind operates.

    Trading is a very personal skill. It's high performance in that you HAVE to maintain a high level of discipline and self control, like an athlete, but profitable traders vary in their techniques. One person catches 10:1 windfall profits on a very rare basis, another pounds out 2:1 winners day after day with 45% expectancy.
  7. MaxLD



    You didn't mention, nor is it really any of our business, how much of a trading account you have to work with. My point is that you may have unrealistic expectations of how much gain you might achieve with regard to your beginning balance. You also didn't mention whether or not you are options oriented.

    The old adage "You have to have money to make money" is true. There is no getting around that one. Without the necessary starting capital, you may be taking too great a risk for too little reward. Consider your risk/reward profile for EVERY trade you enter into. Before you count your profits, consider FIRST what you stand to lose in the event your trade goes against you. As a trader you are in business for yourself and you must proceed accordingly by preserving your capital.

    When I first started trading, I had the same experiences which led me to ask myself if I'm really cut out for trading. Well, before you through your arms in the air and give up in disgust, do yourself a big favor and do what I did. You need to learn about options contracts. It's not rocket science and I promise you that your bottom line WILL improve. Your performance will improve because options allow you to control risk to varying degrees. Did I mention you need to CONTROL RISK first?! :)

    There are plenty of good book titles out there and I have my favorites if you would like. While I'm new to this board, there seems to be no shortage of experienced people who would help you get on your trading feet...myself included.

    Good luck...
  8. Great file - thks.
  9. ePandit


    CTT, dac8555, kiwi777, chiguy, Fractal, MaxLD many thanks for all of your AWESOME answers and recommendations. Very helpful and encouraging.

    MaxLD, I’m not options oriented, never tried this instrument – will consider this opportunity to improve my bottom line.

    Fractal, analyzing the reward / risk ratio is not new technique for me. Though, I did not apply it to seeing patterns in market behavior. Thanks for the insight.
  10. 1. Keep a diary.

    2. Try all of the different permutations and combinations of ideas, belief systems, theories etc., until you find the one that is profitable AND feels right to you.

    Then you will be on your way.


    #10     Oct 31, 2006