I know basic stuff and indicators but I am not confident or consistently successful in trading. What is the best way to learn day trading ...do I need a mentor ..if yes where do I find one? These days one should just learn automated trading or there is still advantage of manual trading?
What does a MACD reading of 0.0 mean? What's the difference between Williams %R and Lane's Stochastic? (Or between those two and the MFI with flat volume?) Know how to put anything on your screen into a simple, meaningful sentence besides "Buy when it points up, Sell when it points down." Define "day trading" -- there's a world of difference between seconds-long trades and minutes-long trades and hours-long trades -- which means what you'd learn and where to go are definition-dependent. One could do worse than starting their 'trading journey' with a specific intention to eventually code their practices, as that would demand that *all* their trading was done with the sorts of consistent and rules- and evidence-based trading that would eventually comprise such code. (And this applies too, to whether you're intending on seconds-long, minutes-long, hours-long, or >days-long trades. As you gather evidence on your trading, you'll want to grade how you're doing. The magic word and the general framework you'll want to master is expectancy. Best Wishes. ((FWIW, of what is all over the net, I have never seen anything on day-trading that was 10%-33% patently false -- which in medicine, amounts to murder. In trading, you lose your shirt. But for that matter, even the worse shit I've seen on expectancy is still useful -- what would be *most* useful to you will depend on what you need at the time.))
Hello Curiousv, If I was starting over as a day trader, I would say start a new thread with the subject "How to Learn Day Trade". I would say this: 1. Find a good day trading mentor or day trading video course(s). Spend about 1-3 months researching good trading video courses or a good mentor. Step number 1 should be your first goal.
Hello curiousv, In my opinion, don't waste your time learning automating trading. Why I say this? Because you currently have no trading ideas/plans/strategies to program and back test, because you have no day trading experiencing watching the charts. Manual trade for now to learn the art/psychology/business of trading. Do the automate stuff once you have a consistent way of making money if you want to. Also, a basketball player gets better at basketball skills, by picking up a ball and shooting it 50 times a day. Open the trading chart, and start trading. You will learn faster this way. But I do recommend a mentor or good quality book/course on day trading.
This advice is mostly pointless. I rarely trade manually. I define manually as drawing lines on charts and using those. In fact I have a significantly higher variance trying to trade against my systems that I develop in a mathematically verifiable way (most TA indicators have no statistically significant predictive power over the long term). I started writing programmed strategies and manually trading them on a small account. This wasn't a need to "learn the market psychology". My broker wouldn't give me access to the FIX API with an account under 100,000! My background and training are in Computer Science and Mathematics. It made sense immediately to me to develop a way to systematically trade automated or semi-manually (if my broker didn't give me execution access...sometimes execution can be expensive). I generally use statistical models which don't have clean representations on charts. As I mentioned above if you have the technical chops and a larger account automated trading is fine, in fact it should be preferred. It forces you to cleanly define your rules to a computer for entry and exit. This is important, it's something the best manual traders can do but the average trader cannot. You don't really "learn automated trading". Automated trading is an extension of one of two fields: 1. Technical Analysis: Automated signal generation based on TA tools. 2. Statistical Analysis: Automated signal generation based on statistical tools. You can implode your account very quickly if you're not a good programmer or have unclear rules. Don't pay anyone. You can post your results here but even that is pointless. Use metrics such as Sharpe and Maximum Drawdown to determine how good you are. Compare your results to large hedge funds (ex. The Quantum Fund maintains a Sharpe Ratio of somewhere between 0.42 and 0.6, the S&Ps Sharpe Ratio has rarely exceeded 1) and CTAs. If you aren't a successful swing trader however you are going to struggle day trading. Consider that most technical indicators and statistical analysis begin to fall apart at lower timeframes. You'll have people here claiming the minute bars are great but you are trading mostly against noise. Statistically, high frequency (bars lower than 30m) is difficult to consistently trade correctly. Let's say you aren't an accomplished swing trader. This means your pattern recognition in the higher more established time frames isn't good. Patterns are more statistically significant at periods from the daily and higher. So if in this more statistically favorable environment you are not good you won't be able to day trade properly. You'll be gambling. Many people make a living on gambling but when they blow up, they blow up big.
Hello gaussian, I appreciate you challenging my post above. It makes for a healthy conflict and debate. As we both know each trader journey is different. I was simply stating to the OP try trading manually first to get actually trading experience, before trying to automate something. Your background is Math and Computer Science, so programming to you is a skill you already have. The OP may not need to automate anything, if he/she can trade daily a few trades and make money.
Hey, thanks for not getting defensive. This is correct. I was mostly concerned with not discouraging the OP from trying it. I was primarily just indicating "market feel" isnt really used in automated trading so it wouldn't be worth the OP's time to learn it if he wants to go that route. If he wanted to trade manually in a day trade scenario, I think both of us are correct depending on his path he wants. If he just wants to try to scalp a few ticks here and there manually - you are correct. Trading manually to learn the ropes is probably better than investing in 4+ years of education just to automate some strategies grounded in statistics if the OP doesn't already have that knowledge.
Thanks gaussian and no problem. There is nothing to get defensive about in a open forum. Only an idiot/fool does not take time to understand someone else viewpoint and only accept their own way of thinking when it comes to trading to make money. Debating is good.
Yes I agree. We don't want to discourage the OP from automating, just it may not be that part of the journey just yet. The OP can automate trading, but he/she is probably not ready for that part of the trading journey just yet. Sort of like an Electrical Engineer degree, an engineer does not learn Electrical Circuits the first semester. The engineer had to study all the mathematics courses first, so the engineer can use that math to apply to real world electrical engineering applications in the later courses. Like your Computer Science degree, you did not take Python the first semester, you probably took HTML programming first or Fortran. The same with trading. Skipping the fundamentals/mechanics of trading, may not help very much when just jumping to automation path. I would even encourage the OP to trade/study manually for 3 months, just to learn his/her self.