Apologies if this is in the wrong area, it's more a backdrop and then a request for advice (no, I'm not going to ask for your strategies). I was initially introduced to stock trading back in 09 and suffice to say, I gambled and chased rainbows - I could be up a few thousand to then go and lose it all by buying on a spike and selling out at a loss of 60%. After burning through what amounted to about 8000-10000 I "quit", I was simply chasing the next thrill and was honest enough to admit it to myself and stop. Come 2012 I was introduced to a forex trader who wanted to train someone (yep I'm aware of the "those who can..." saying) and I was hooked once again, I honestly believed in this person and initially he'd spend hours on skype teaching me trends, indicators, candles etc, eventually he started running small training seminars. I spent a total between £3000-5000 on his courses and trading strategies - I've now thrown these away as they're ultimately BS and I know nobody making money off them, his shouts generally lose money and he exaggerates his claims and I now see he makes money off his seminars rather than all his trades. I was very close friends with him but ultimately decided I cannot take money from people as naive/gullible as me and would rather earn an honest 9-5 pay than make money lieing and cheating people out of their hard-earned £'s, so I went my separate way. It also happened to be late last year that I finally "wiped" my account and all funds designated for trading - so I essentially would have to start from scratch if I were to want to start again. So, it's 2016 - I've tallied up my total "losses" from the account, to spending on seminars etc to be about £26K, but it WAS/IS money I could afford to lose as I have no debts etc...yet I find myself constantly looking at stock movements and currency pairs - yearning to get back in but doing it properly this time. My query is simple - I know I need to start from scratch again, but where do I "start"? I don't know if I should remain within forex, or go into stocks. Are there any good books I can read, do I start with the basics and then start studying different strategies to see which naturally matches my personality and then tweak it to see if there's an edge? The internet is awash with so much BS that I am finding it difficult to filter out what is pure cr@p and what is genuine, legit information - I believe it's not quite as complicated as most of us think it is, but it's getting to that stage that is the trial. I am considering if I should start a journal on here - this is so I (and others) can see whatever becomes of me with regards to trading.
First of all, understand that most of who trade for a living experienced losses while learning. Some of (me for example) a number of multiples of you own, some unfathomable numbers.....dues will be paid. You are correct in that you are starting at the beginning. As there are no credentials, degrees or certifications necessary to trade, most jump into the deep end having no idea how to swim. I can recommend some books to get you started. What you need to get from them are examples of strategies and how traders think. If you are ultimately successful and I hope you will be, you will trade like you....we are all different and see things differently. Be patient, this requires highly specialized skill sets that will take time to develop. If you remain on ET, you will have to ignore the naysayers and losers. They will spend all day telling people it is impossible to do what they want to do. To we traders, they just sound like fools but to the new or struggling trader, they are a cancer. Once you study what other traders have done, you have to spend a lot of time watching price development on the charts. If you are diligent and spend the time, the fog will lift and the patterns will emerge and make sense. Once that happens you can devise a trade plan based on what you see which you will have to test for efficacy. This process may take many variations before you have a viable plan. I can recommend for study such as Bill Williams, Trading Chaos, Joe Ross, Trading by the Minute, Linda Raschke and Larry Connors, Street Smarts and for a solid Technical Primer, John Murphy's Technical Analysis of the Financial Markets. There will be other good people on this site who can recommend others....good luck.
I think trading as a lonely wolf is very dangerous. A better approach is forming a trading club and sharing funds, profits and losses. A big advantage of this is that enough capital will be available. One just needs to agree on a trading plan (ie. the rules of the club). I came to this IMO very important conclusion while I was developing and testing a trading system. Suddenly the results improved significantly when I used 10 bots instead of just 1. The more members the better. And it's logical: losses get shared by all equally, so nobody gets hurt much. Ie. one can call it "socialist trading" as in "united we are strong". Members should be allowed to act individually (like my bots do), but the losses should still be shared among all. No, I myself haven't found or formed a club yet as these ideas are just fresh, but IMO it make very much sense.
Honestly (and with all due respect), it sounds like you might have a gambling problem, and if that's the case you need to be honest with yourself and stay away from the markets. If your not a gambler...I'd recommend you focus on developing a trading plan, backtesting that plan to establish confidence in itS profitability ( or lack of), and then STICKING TO THE PLAN. I've chosen to go to the automated/systematic trading side of things primarily to remove my own emotions and biases from the process. Maybe that's what would work for you too
Thanks Speedo, I'll look into getting those books, you've given a frank answer which I appreciate, also appreciate the warning - it's something I'm aware of and think would be good to enable me to control my emotions (and thus keep them in check when trading). Thank you for giving me a place to start. botpro, I don't think that's how traders are made, it really is a personal development thing imho but I agree with some guidance it can be easier. Your idea is something that I personally believe would make more sense once/if a person is consistently profitable. IAS_LLC, sorry, I use the term "gambling" in the sense that I'd simply pick the highest riser and go long (when in stocks) to "feel" i was trading when in essence I was gambling, I had discipline in my last 2 years but unfortunately was picking some awful stocks in the AIM market which were diluted over the long term and thus also my portfolio, or i simply was stopped out in the fx market. I am fairly discipline once I see a plan works so for me it's essentially what you said, devise and stick to a plan.
hi DH91, I would start with stocks because they are less leveraged, and too much leverage will get you into trouble unless you are an expert. (I do love some of the 3X ETFs, though!) I would also learn more about risk management, because that is what truly prevents accounts from blowing up. And then "learning" it and implementing it with patience and discipline can be two different things too! I sure know that. I would recommend swing trades, risking 2-3% per trade, trying to snatch a 3-to-1 reward. Look what LABD did from its hammer bottom from five days ago. A 3% risk with entry 2 ticks above hammer, and stop loss two ticks below, would've paid handsomely already. (Darn, it is easier to get in than to find where to get out sometimes!) bry
Things aren't necessarily "BS" just because You lost in them.; I believe everything has some truth to it. It's up to you...to decipher and utilize it. (nothing will ever be laid out for you 100%, so don't go looking for that magical bullet.) "I believe it's not quite as complicated as most of us think it is" ...you're right about that. trading is not complicated...but also, it is. if that makes sense. It's easy to learn it, but doing it successfully...is kind of another story of zen mastery.
I think that although there are some good replies so far, we don't exactly know what was wrong with what you were doing. I've heard lots of stuff about how trading forex isn't all that neat because of lots of opportunity to get scammed, but I know nothing about that. They say trading the currency futures is better, but this still doesn't probably matter all that much. I think the best way forward is to figure out why you were losing money. If you look at your last 10 trades, what went wrong? If you want, throw up a chart, and I'm sure enough people will reply. Maybe you're trading in the wrong direction? Maybe you're too early? Maybe your stop is too tight so you get taken out at the slightest hiccup? I say forget the books and all that crap. If you have been at this a few years, you probably already know enough to put something together that works. If you switch instruments, you will be starting over with learning a new beast. Although they say that futures are the hardest to learn, in my opinion they are also the purest. You don't have to worry about if there are enough shares to short, you don't have to worry about overnight surprises, you would have plenty of liquidity, and the list goes on. It does mean starting over in a sense if you're going to learn a new instrument, but by focusing on just one futures contract, you will actually eliminate all sorts of other problems. But as a start, why exactly did you lose money? What are the trade stats of your last 10 trades? Maybe your problem is simply a mathematical one in terms of positive expectancy and tweaking the numbers would be a huge benefit. There was a poster months ago who always called fairly decent trades. He won some, he lost some, but when I looked over his stats, I could see that there were just a few trades that went against him quite a bit. Simply put, it was obvious from his data that most trades that never worked out stopped working at roughly 10 points (just pulled that number out of a hat). And yet, he would hold these for lets say a 30 point loss. By simply putting his stop at a firm 10 points and eliminating these 30 point losing trades, he was nicely profitable and could have just carried on doing what he was doing. So in order to figure out how to get to where you want to go, you need to figure out where exactly you are right now. I doubt you're doing everything wrong, but with trading, if you aren't doing 90% of it right, you're gonna lose. Even doing things 80% properly just isn't enough.
They say you should never put all your eggs in one basket. I say you shouldn't put all your eggs in one trade. If you lose, you lose. Learn to move on. There's always another trade. And if today's a loser, then know that tomorrow awaits you with open arms.