After reading about trading for two weeks, I know it's something I want to pursue. It appeals to me because of the: - mental challenges and discipline involved. - the potential for riches (and losses) tied directly to performance. - lack of a boss or a customer/client. - solitary nature of the endeavour. Here's my plan to go from clueless to pro. I would appreciate your opinion: Phase 1 - Read the classic general trading books (elder, van tharp, et al) and learn about all the available instruments. - Study and understand probability, statistics, analysis, calculus I, and hi-speed math. - Study and understand risk management and trading psychology. - Study and understand general technical analysis while avoiding books with titles such as "14 profitable charting patterns!" Phase 2 Follow the markets closely for six months as per Maverick's advice on this page: http://elitetrader.com/vb/showthread.php?s=&threadid=70140&perpage=6&highlight=vehn&pagenumber=3 Phase 3 Trade on a simulator for six months. Phase 4 Trade with real money through IB for a year or until I am consistently profitable. During this time, I will record all the essential information regarding every trade (why I entered, why it was a win or loss, etc). Phase 5 Once I'm profitable, compile my trades into a book to demonstrate my track record. Then approach a reputable prop firm with starting capital($10-20k), and show them my trading history. Once I'm accepted, start trading full-time and become best I can be. My strengths: - Extensive programming knowledge - Ability to be unemotional in the moment - Willing to learn and study hard My weaknesses: - Easily discouraged - Tend to beat myself up for even minor losses/setbacks Questions: 1) Is it necessary at all to purchase any historical data? If so, what's the best source? 2) What is the best source for market info? 3) How deep should I go with my math knowledge (I'm willing to go far into it as long as it's advantageous)? 4) Maverick said his advice works for stocks, but not for other instruments. What's the best way to learn the patterns of futures, options, and forex? 5) How does one discover a methodology which works for him? On ET, one will extol the virtues of technical analysis, only to be followed by another post which lambasts it in favour of tape reading. If you've read this far, thank you. I would appreciate your thoughts.
My recommendation is focused on stock fundamentals, especially on stock analyzer's earning estimation revision. ---- Tony
I think that is too long on sim. I did the same and trading real money changes alot. I couldn't duplicate the same results. It is easy to trade detached on the sim, no money is at risk.
Phase 1 - Keep reading books through all the stages. They will give you some new ideas. Make sure you understand money management! You need to stay afloat during the learning phase. Phase 3 - No need to trade on a Sim for that long. Maybe 2 weeks. Learning to trade will take a long time, but if you really want to do it then it's worth it. Read ET as often as possible, yeah sure there is a ton of crap to wade through but there is also a lot of good info here. Good luck!
I like the fact that you list your weaknesses. Good! Now, with that being said your weaknesses are definitely ones that could kill any successful trading career before it even gets going. Another thing that concerns me is the fact that you have time frames. Now, this is a wonderful thing and also a bad thing. Wha? If you are rigid in your learning but also stay true to yourself and your weaknesses, you may need to be more flexible with your time horizons. I don't doubt you have the desire, easily seen from your post. But, you seem to be very analytical and your profession supports this observation, and you'll find very quickly that you must be more accepting of reality than analytical about that reality. I do like the idea that you are committed to solid background education and study. Keep that attitude, growth in self and account size is soon to follow. Give yourself time and build in some flexibility in your expectations. Hey, who knows, you may be a Market Wizard and easily achieve your stated goals within the time frames. If you truly want it, your weakness of being easily discouraged should and will be overcome as long as your expectations are realistic. You will come to prize/value flexibility. Just my .02
I agree. These tools (models) are the "fundamentals" behind the auction market process. IMO, they also work for any liquid instrument (SPY, QQQQ)... Kovacs, From reading your post, I can see you have given this manner some thought. You original post also speaks well towards the framework of a good, realistic trading plan. You are in fact more prepared than I was when I started trading, hopefully this entails your learning curve being proportionately shorter then mine was There is good information on this website ~ if you do read the books you intend to read, you will find many of the same ideas expressed here via some of the more experienced posters. Take note of who sounds like they know what they are talking about and follow them around a bit. I did this in 2003 before I joined here and it helped me quite a bit. Note this site did not help me in developing any strategy, rather, it helped me in evaluating critically my own thinking process regarding what actually moves the market and how. You mentioned your weakness of being too hard on yourself. Being self critical is OK and self analysis of your actions in the market can be a very revealing and fruitful exercise. However, there is a balance between self-abuse and good productive behavior modification. With that in mind, be prepared to make a ton of mistakes - mistakes are healthy as long as you learn something from them. Also accept the fact that you are attempting to teach yourself a business that punishes severely for making mistakes of any kind. Keep in mind that when you make a mistake the first time, and you do not get punished for it - the next time you almost certainly will get punished. This is where personal discipline comes into the picture. The quicker you admit to and correct a mistake the better off you will be in all circumstances - psychologically and financially. Don't beat yourself over making mistakes, do beat yourself up over making mistakes and not instantly acknowledging them and correcting them ASAP. EDIT: Note, I didn't answer any of your questions. The reason for this is that I beleive these answers will come via your personal experiences in the market ~ your questions are in essence the "learning curve".
Thank you very much for your generous thoughts and feedback. I will definitely stay open to continuous learning and make sure I don't give in to my weaknesses.
Simulator is like a video game.....trade a small account with real money...then you will know what it is like to really be a trader....We only come to know our true selves when real money is on the line....simulator is a waste of time in my opinion....unless you use it primarily to familiarize yourself with a particular trading platform.... trust me, the decisions you make on simulation will not likely be the decisions you would make with real money....i know this from experience...