best of luck to you and hope you find what you are after. but while you are waiting for those elusive wise ones to answer and guide you, why not visit the engine of this locomotive to see how the driver thinks for therein you might decide you're looking for a slab of ice in the Sahara. search out and read the "engine's" post(s) http://www.elitetrader.com/vb/showthread.php?s=&threadid=168825
i live on a ship in the middle of the ocean , it has sails but i dont know how to raise them, in all 4 directions i see only water, i have a chart but dont know how to read it and a compass but i dont know what its for, ....This is the newbie, first of all, you are basically a dead man, just a matter of time. You should have never left shore without knowing something about ships, sailing, charts and compasses, my advice would be go back to a sim acct until you have enough skill to spot a good trade,, navigate a trade back to small or no loss, and nurture a profit to its destination...there are a lot of options out there, one way would be to learn how to plot tl's on charts and learn some basic market profile,when you can spot supp and res, limit your losses by selling call or put sprds to compliment what your chart prognosis was,i have never learned a successful way to use stops, maybe someone else can help here but you could trade the futures if u knew how to use stops
You just started out. I want to make 2 suggestions for you. 1. Don't try to catch anything that moves. Some trading schools - Online Trading Academy included - teaches to scan, scan, scan the market for "movers" to trade. But there are dangers in these waters for beginners. Often times they get in long to a late bull situation and the reversals slap them on the face before they know what happens. Also those "mover lists" contain quite a bit of noise. Especially with low-price stocks. They can move 20% to 30% on a day with no (or unknown to the outsiders) apparent reason. And you try to catch a stock's move by news? Good luck. When the so-called news get to you retail, they might even be third-handed. If you buy in to the news, you will be feeding on those pros who positioned in there before you do. The best may be to pick a list of stocks you want to learn from. Those should be highly liquid. (Studying from a thinly traded stock will make you pull your hairs out.) And have a high correlation with the market's ups and downs. Study their movements everyday. Then try to trade those highly probable swings. Or simply study the broad markets (S&P) and learn to trade index futures. 2. I think as beginners, your preparation for the beginning of the day is not as important as your preparation, or review I should say, after the end of the day. Practice trading. Whether use a small size or doing simulation. Date, time, entry, exit, target, stop, and the reason you get in to a trade. Something attracted you. What was it? A pattern? More than keeping a journal of what you traded, keep some files and categorize your trades. It's easy to do these days on a computer. Keep some powerpoint files. Capture (screenprint) the charts when you traded. Note the points where you entered/exited/stopped. Review how that trade worked out. You will learn more from the failed trades. If failed, what you think caused your trade to fail. Over time, in each play category you will have a series of failed trades that were done based on similar assumptions (that attracted you to the trade). And compare your cases. Hopefully you will find some similarities. That would be your pattern of behavior. It has nothing to do with the market or the stock. It has a lot to do with how you act based on what you see from the market. If that same behavior causes you to lose over and over again, then you know what to work on to correct it. Likewise, reinforce those trades that went well.
To prepare for trading first I check Bloomberg to see what news releases are due so I don't get surprised. Then I turn on Leave it to Beaver or The Beverly Hillbillies on TVLD at the market open, with one eye on the screen. I used to think Mr. Drysdale was a jerk, but he is a banker I would like. A local bank executive who tries to help his community (and himself of course). Those were the days.
Kudos for planning each day, analyzing your trades, and recognizing mistakes so early. I was clueless for well over a year, and then finally picked up a few clues not too long ago. Expect the best, not the worst. Don't hope for the best; EXPECT the best. If you want to succeed as a trader, remove HOPE from your vocabulary RIGHT NOW: EXPECT THE BEST. If you're trying to get a feel for the market before the market opens and before the market-movers have come to play, you are trying to predict instead of trade. You list that as one of your biggest mistakes and rightfully so. Are you trading Asia, Europe and the dollar? No. You're trading stocks. If you're not trading these instruments, then look at them merely as a baseline to which our market may react. You have no idea how the market-movers will react until they join the game. Have you ever seen futures up in pre-market only to sell off hard on the open and vice versa? Of course. You're interested in what happens when the professionals come into the market. Are you for the most part a counter-trend trader, a breakout trader, or a trend-follower? Are you trading SPY or ES? If not, then focus on support and resistance for your list of stocks to trade. I also do this and the main reason is because you can quickly determine if your stocks are acting relatively weak or strong vs. the market.
Lack of patience is an account-killer. It leads you to try and make something happen that's just not ready to happen. You'll get into trades too soon, use stops that are too wide, then get nervous and exit too soon leaving profits on the table, and end up generally losing money. You say you review all your trades, so you should easily be able to define your profitable setups. Wait for these setups and trade them. If an entire day goes by and you have no trades, that's fine. All it takes is one solid trade to make a good week's pay. You are doing well to prepare yourself, but because you are diluting your attention, you end up making common mistakes, such as chasing entries. You watch one chart, the glance at another and see a move happening without you. You believe you can somehow "get back" what you missed and that causes you to make silly trades. You feel you should be doing more, but in trading, less IS more. I will now tell you 2 things that I wish more than anything else an experienced trader had told me when I started out: 1) As a beginner, focus on a very, very narrow selection of trading instruments, in fact, even just one. An experienced trader can trade anything and come out net positive. This is where you want to be. But to get there, a beginner must focus fully on learning how to trade. If you are to succeed, you must be able to pass the test where someone throws any stock or market at you and you look at the price action and you trade what you see and come out either net profitable or with a very minimal loss. Leverage is not an edge. Averaging into a counter-trend trade when price has moved "too high" or "too low" is not an edge. Holding a loser through a large drawdown until it eventually becomes profitable or at least break even is not an edge. These are tactics that can work very well for a long time and lead you to believe you have an edge, but they can also wipe you out. 2) Go with the trend. As a beginner I didn't know how to go with the trend. I did quite well as a counter-trend trader until my strong opinion about what was reasonable overrode the reality of what was happening right before my very eyes. A trend is established when the majority of market participants are expecting price move higher or lower in their favor. As a beginner, nothing is easier than playing on a winning team. If you've never played softball before and you join a team that's at the top of the standings, you will enjoy being a winner as you learn the game! Later on you may find that counter-trend trading, or jumping on every stock that's in play that day, is your ticket to riches. These are tactics for very experienced players and even experienced players can get burned this way. But as a beginner, learn to trade successfully by doing what's easiest. Learn to read price bars as a gauge of crowd sentiment. Learn when to enter and exit based on price action alone, not what YOU think should happen. Learn when a trend is approaching an exhaustion point, take your profits, then wait for the reversal signal to get in on the new trend (the second mouse gets the cheese). Make sure your biggest losing day is never more than your biggest winning day. Put in a max loss to ensure this. A max loss per trade, and a max daily loss. Always have an advance plan and an inviolable exit strategy. If you EVER find yourself thinking while in a trade, STOP. You pre-plan your trade and that means your exit point is pre-planned. No matter what you think, only move stops in your favor. Looking back, we can all see why we were wrong and should've known better Keep making notes and analyzing your trades, and eventually you will come to trust your edge enough to be patient in waiting for setups, put on a trade without hesitation, and exit based on what makes sense at the time.
So my advice is to pick one stock or futures market to trade and trade it with small size or in a simulated account until you are confident in your edge, and your ability to honor your trading plan without fail. Picking just one means you will definitely learn patience and focus, and most importantly, you'll learn how to trade without gimmicks. I leave you with my cautionary thread: http://www.elitetrader.com/vb/showthread.php?threadid=193439
You should hire NoDoji as your drill sergeant xdiesel123x. She will whip you to obedient. Congratulations on your 3000+ posts ND! xdiesel123x you should search through her past 3000+ posts for some gems in learning to trade.
I would add a max lifetime loss too. Maybe $10k, $50k, whatever it maybe. A hardstop for you. If you lose that much... STOP. No more trading. Take some time off. Rethink. Trading may not be for you. Trading is not for everyone. But... traders are cats. We have 9+ lives. If you want to come back... define what changes you must make this time. Spend a lot of time observing the markets and drilling for trades before starting back up.