What should I learn?

I would like to learn how to trade. I've read a lot of books, and see there are many markets and many strategies and approaches to trading. When I learned to play online poker, I lost my full account the first go round, but I learned, improved, and made money at it. But trading seems a bigger beast than poker. I expect I will lose a lot as I start, just like poker, but how do I decide which markets to put my money in, and which strategies to learn and apply?

I plan to spend time saving and learning the rest of this year, and then start small with a few thousand dollars in 2014 and add $500-1000 every month. I have a somewhat flexible work schedule as a consultant, so I can be at the computer sometimes during work hours, but not always.

I've read about many different approaches, like swing trading, options strategies like covered calls and spreads, and many systems like CANSLIM, Turtle trading, ACD, Elliott waves, Jack Hershey's method, and so on. Any of these surely take a long time to reach a high level of competency. How do you choose, and what do you do on a daily basis to consistently improve?

 

Let me choose for you.

Your job has to be related to trading with you at a terminal, or else you'll never learn.

I think screen time is less important than being aware of the news on TV and only trading using algorithmic code that'll take a bit before you have something worth using.

 

Are you serious? What do the news and algorithmic code (automated trading) have to do with each other?

 

Do you mean one would need to work at, say, a prop firm in order to learn how to trade? Or are you just saying that unless I can go at it full time during the work day it's prohibitively hard to learn how to trade?

 

bwolinsky is saying that you can't compete with people who do this as their primary job. To really 'learn' how to trade, it has to be a full-time effort. even consistent traders are always learning and evolving because it's not a 'side gig' for them.

markets evolve, those who pay attention more often evolve faster/sooner than others.

 

Since you're coming from a poker background, why don't spend a little time and analyze your experience in that arena.

- Why play poker? Are you in it for the entertainment? To prove your right or smarter than the others? Or are you in it to make money?
- What did you like?
- What didn't you like?
- What were your strengths?
- What were your weaknesses?
- Can you read the other players? Pick up tells and nuances in their playing/betting styles?
- How much time did you commit?
- How much time did you want to commit? Less or more?
- Have your priorities in life changed? What are they now? How will poker or trading help you achieve them?
- What kind of lifestyle do aspire to? Do you need a steady income or will infrequent big increases/decreases work better?
- Can you take losses? Can you live with folding before the flop 75% of the time w/o getting bored and leaving the table?
- What's more important to you - low batting average, but a lot of home runs and strikeouts, or high batting average from hitting singles?

Your poker experience is directly transferable to trading. Use that experience to guide you to the appropriate approach that fits your personality, lifestyle, and goals/aspirations...

Like poker, you're going to have to figure most stuff out on your own. The books only go so far. The principles are good, but the examples are cherry-picked. Experience, making mistakes, and losing money are the only ways you'll learn. You'll either buckle down, focus, and pay attention, or give up and try something else...

 

One of the things that is unique about trading is that there is no prescribed course of study that will make you successful within a defined period of time. There are schools that make claims, but they don't deliver. If you enter medical school, you either wash out or become a doctor "on schedule". Trading is more like enlightenment: You either get it or you struggle endlessly. Most simply give up and do something else. People don't fail at trading so much as lose interest.

The problem with your question is that everyone here has an opinion, and there is little agreement. That is partly because there are many ways to trade profitably, few of which will fit your personality. Also, many here are in the same situation you're in, but most won't admit it. Those who say, don't know; and those who know, don't say.

 

RWK is correct, and you're going to have to ask yourself some questions first so that people can provide answers you can actually use. The following may be helpful:

In order to succeed at trading, you must have an edge. Your edge begins with the knowledge you gain through your research and testing that a particular price pattern or market behavior offers a level of predictability and a risk to reward ratio that provides a consistently profitable outcome over time. Without it, one is just "playing" the market in order to have something to talk about on message boards. To get it, you have to know exactly what you're looking for and what to do with it once you've found it. This process is what the journal is all about.

The journal goes through several stages depending on where you are. Once you've decided where you want to concentrate your efforts (at this level, the journal may resemble a diary), then you begin the process of developing a system (or method, strategy, procedure, whatever you want to call it). Here the journal takes on a different character. Once you've developed a tentative/preliminary system, you begin testing/trading it, and the journal adopts a still different character.

The first step is to decide what kind of trader you want to be.

• What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it? Even the greenest of the green knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X.
  
• Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches are selected deliberately and for thoroughly-considered reasons.) How patient are you? How adventurous? Are you a leader or a follower (most people think they're leaders)?

The second step is to decide what you're going to trade and when you're going to trade it.

• Have you found an instrument -- futures, stocks, ETFs, bonds, options -- that provides you with the range and volatility you require but also the safety that enables you to relax and trade in an objective and rational manner?
  
• Have you yet found a time (5m, hourly, weekly) or tick (1t, 200t) or volume (1K, 100K) interval that gives you enough trading opportunities but also gives you enough time to think about what you're doing? If you want to limit your trading to the "morning", are you physically and psychologically prepared to trade all day? If not, can you shrug off whatever opportunities you may miss by limiting the amount of time you spend trading?

And so on . . . (http://www.traderslaboratory.com/forums/wyckoff-forum/15535-developing-plan-trading-journal.html)

 

This.

And that's what make learning trading very challenging. You're basically on your own and will get help from nobody. Of course, some will try to help you, but usually it's the blind leading the blind or someone who does not know how to trade who wants to sell you something.

My only general advice would be to avoid day trading and see if you can develop a method that you can utilize at the side of what you're currently doing. Day trading requires a lot of effort, you need to be glued to the screens and in the end it may not be worth it compared to swing trading.

I don't know anything about non-directional trading, but some people would probably argue that's the way to go.

Good luck (you'll need it)! : )

 

OP

What the heck you been doin for the last 4 yrs (rhetorical of course)




Hmmmm, lessons to learn;


Losing small is beneficial…, and necessary

You will never know…, nor do you need to

Price is always right.., and the final word on all matters trading

Trust yourself.., your eyes…, your actions…, most of all – trust price

Stops – place em only where the trade fails – otherwise you’re pissin money away

Millions of ways to make money trading – you must find yours

Clarity

Decisiveness

Patience

Listen to price... and nothing/ no one else

Win more than you lose (not necessarily more often, just more - by at least 2X)

Once you find that special something - scale up..., and don't F with it

===============================

Aside;

However long it takes you to learn – whatever from here….

Plan on devoting 3X, or more – to unlearning 99% of the crap you've already learnt – it will never serve you…, and it will likely kill you (trading wise) if not eliminated

jmo
RN