You can cut learning time down a bit during the papertrading stage by using a simulator and looking at thousands of days of charts. This will support your paper trading activity. Note down not only the trades, but the thoughts behind them, because the thought processes speak volumes as well. This becomes especially important when you go live. Good luck Natalie
The most important thing you can do is simply to get involved in some way at first WITHOUT LOSING MONEY. REMEMBER THIS AND REMEMBER IT WELL - THAT MONEY YOU GOT IS YOUR BLOOD - LOSE IT AND YOU ARE GONE FROM THE GAME. I discourage you strongly from reading any book at first. It will just prejiduce you to REALITY. Do this. Put up a 1 and 3 minute chart of ES and NQ. Also, put up a 1 and 3 minute chart of MSFT and GE. Put up two moving averages on each, one short term and one long term, like a 10 and a 200. Don't over do it on indicators because at first you just want to develop your instincts as a trader, not be influenced by a bunch of squiggly lines on your screen. Later, you can start to add indicators as you see fit once your intuition has been developed. Put up a chart of TIKI, TICK, and PREM up somewhere as well. Start watching for three months straight and then go back and start reading books and see if what they say has any relevance to what YOU HAVE SEEN WHITH YOUR OWN EYES. ET is also a good resource if you know who is real and who is a piker. Once you have formed a hypotheses, start VERY SMALL AND VERY SLOW WITH REAL MONEY. Best of luck on your JOURNEY nitro
axeman and techanalysis are both right. there's no substitute for sitting in front of the dang screens for several years til you start to "get it" .. a few learning resources along the way can help shorten the learning curve.. but what I've found is that far too many traders simply don't have the work ethic, patience or discipline to make it. so even with training, they are not cut out for trading, lacking the tools, discipline, timing and pattern recognition skills, data analysis skills, work effort etc they want instant cachingos after watching informercials about guys trading in bed using a laptop. please. agree w/axeman that it's best to papertrade for a looong time (1-2 years) first, then trade small share w/ib to get the emotions of being live in a trade, then slowly integrate. any of you guys have ideas, why so many think trading would be easier to learn, than say golfing or playing piano? nobody's good at either of those til after 2+ years practice... same w/trading. there seems to be a get rich quick wowza mentality out there that's not helpful to anyone who's serious. it's Not easy. my .02 ken Trade Strategy in a Nutshell: btw, the #1 thing I've learned about trading, is that it's best to avoid any time when the COMPQ (and/or stock charts you're trading) are inside the previous day's high/low .. do post mortems on your stops to see which rules were blown that cost. and solely look to aggressively trade sector volume breakouts in the 9:40am-10:30 timeframe (eg only trade within the 2 strongest-moving sectors on the open), and avoid trading when the TRIN is between .7 and 1.5. (I like longs when TRIN < .7 and shorts when it's > 1.5). and put on several simultaneous trades on breakouts, manage via open P&L.. routing via arca/isld usually. that's it in a nutshell. the rest is a lot of detailed pattern recognition.
Can't speak for golf (I don't play it), but it takes many years of dedication to become a good pianist... Natalie
Great advice. I might add that Martin Pring's "Intro to Technical Analysis" is a good place to start.
Read the article Psychology and Probability by Mark Douglas in June 2003 Active Trader Magazine (p. 66) (probably still on the stands). It describes the task of making probabalistic decisions in dynamic, random environment (that is, trading). The pinball analogy in Brett Steenbarger's book The Psychology of Trading (p. 231, Playing Market Pinball) provides a really good qualitative model of what it's like to search for and find an edge.
Start watching INDEXES ONLY , SP, NQ and DOW at the same time. Individual stocks are just too confusing for a beginner. Study trendlines, probably best tool there is. Other than that do what axeman said. And remember, it is about the freedom, not about the money. Walter
Looking back, I think that the Market Wizards books made more of a difference to my trading than anything else. No matter what kind of trading they did, options, futures, stocks, arbitrage, whatever, every single one of them stresses that trading small and managing losses is FAR more important than anything else you can do. If you learn good risk management and can stay in the game for a couple of years, the profits have a way of taking care of themselves. Jessie
MONEY MANAGEMENT! No matter what strategy you take...no matter what time frame. This is the MOST important and MOST overlooked aspect of trading. I suggest you pick a dollar amount you are comfortable with losing on each and every trade, this way when you get involved you can say to yourself "self, I have already lost this money so who gives a rats ass what happens now". Right there you remove the emotion. Now Remember this number 34.2% (give or take a sub-decimel number). You can have a dismal accuracy rate of 34.2% and still make make money (gross) if use a simple 2-1 win/loss ratio. Just as example, lets say you make 100 trades with a 34.2% accuracy and a minimum 2-1 ratio (this takes into account you absolutely refuse to take a profit/lose unless it hits your stop in either direction) 500 share lots traded 1pnt loss/2pnt gain 67.6% * 500 = -33,800 34.2% * 1000 = 34,200 You will never make a living like that but if you tweak your win/loss, share sizing and accuracy the number may surprise you! I hope I got my point across properly and that it helps. Good luck and stress free trading, C.