Where do I start?

This is a discussion on Where do I start? within the First Steps forums, part of the Reception category; Originally Posted by fayalac Fx Freedom?..., and they need you to answer that question?, dont waste your time. They will ...

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Old Jan 8, 2012, 8:57pm   #41
 
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Re: Where do I start?

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Originally Posted by fayalac View Post
Fx Freedom?..., and they need you to answer that question?, dont waste your time. They will promise to make you as rich as you have neve dreamed in a couple of nights, you will be paying some bucks for a useless material or a brainless program, agt the end you will be loosing not only time and money, also your confidence.
I guess you better study and learn as much as you can, there are plenty of material around and always keep in mind, !) the trend is your friend and ) dont use real money until you have developed and forward tested your trading method.
Thank you Fayalac. The page do not want to answer anything... just take a look at that page. But thank you again I will take your advice, maybe you're right. Anyway I focus on my demo account.
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Old Jan 9, 2012, 10:49am   #42
 
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Re: Where do I start?

You start at the end.

Find a mathematical viable trading method (this is one of the last things a trader does, it's like every trader has to reinvent the wheel). Do this by backtesting your method. You can actually do this on a basic spreadsheet by downloading prices from Yahoo for a large low volatility market say Dow, S&P or FTSE, then reconstructing the best known indicators in the following columns. You can do this in excel or opencalc, you don't have to go your ends on the mainstream charting software just yet. Once you zero in on a method which gives a positive result you can then begin to spread your wings.
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Old Jan 9, 2012, 11:26am   #43
 
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Re: Where do I start?

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Originally Posted by PollyM View Post
You start at the end.

Find a mathematical viable trading method (this is one of the last things a trader does, it's like every trader has to reinvent the wheel). Do this by backtesting your method. You can actually do this on a basic spreadsheet by downloading prices from Yahoo for a large low volatility market say Dow, S&P or FTSE, then reconstructing the best known indicators in the following columns. You can do this in excel or opencalc, you don't have to go your ends on the mainstream charting software just yet. Once you zero in on a method which gives a positive result you can then begin to spread your wings.
Thank you for explaining in sparse detail the "Secret" of trading.
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Old Jan 9, 2012, 11:31am   #44
 
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Re: Where do I start?

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Thank you for explaining in sparse detail the "Secret" of trading.
There is no secret, I've just told you the answer?!
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Old Jan 9, 2012, 11:38am   #45
 
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Re: Where do I start?

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Originally Posted by PollyM View Post
You start at the end.

Find a mathematical viable trading method (this is one of the last things a trader does, it's like every trader has to reinvent the wheel). Do this by backtesting your method. You can actually do this on a basic spreadsheet by downloading prices from Yahoo for a large low volatility market say Dow, S&P or FTSE, then reconstructing the best known indicators in the following columns. You can do this in excel or opencalc, you don't have to go your ends on the mainstream charting software just yet. Once you zero in on a method which gives a positive result you can then begin to spread your wings.
And "once" I "Do" this then all I have to do is place 1 trade per week and I can put my feet up and spend my days researching dial a flooze or 2 or 3.:lo l::cool :
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Old Jan 9, 2012, 12:08pm   #46
 
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Re: Where do I start?

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And "once" I "Do" this then all I have to do is place 1 trade per week and I can put my feet up and spend my days researching dial a flooze or 2 or 3.:lo l::cool :
You're my kinda guy.

There is no secret to making a cup of tea but if you had to write down every single operation then we would be here forever.

I can keep going if you want.
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Old Jan 9, 2012, 2:15pm   #47
 
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Re: Where do I start?

Is it safe to come back in? I've just joined and straight away the cheeky monkeys are about.

Also googled 'bint'. You tease.

Anyway, now that I've taken out the trash for today, I can show you how to wipe the flaws.

It seems that the gauntlet has been laid down. You have asked, so here it is. Are we sitting comfortably?

This is a long story, so please be patient.

You can think of any market as a singer, which sings the most beautiful melody you could ever imagine possible. Every moment of this melody is unique and spontaneous.

As a trader you are looking to harmonize with the market's melody. You need to learn the typical patterns (the tune), make your instrument (the indicators), and then play your part in the live game.

So. First off, let's learn the tune. You may have heard of the Elliott wave and Hurst's cyclic analysis. Start there and read as much as you can. This will give you a good grounding.


... Tune in next time for part two of I don't know how many ...
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Old Jan 9, 2012, 5:10pm   #48
 
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Re: Where do I start?

Okay, I know this seems quite accelerated learning, but once I've got my thoughts down here you can read them at your own pace.

Now, conventional wisdom and chart watching can become hypnotic. Hopefully, if you are a beginner you have not been drawn into this trance as yet, but either way, to move away from this to a bigger picture, begin to think of the sine waves used in Hurst's model in three dimensions rather than the usual 2d chart, ie as spirals moving around spirals moving around spirals ... ad infinitum.

To explain this further, if you pull out a slinky (you know, like Slinky Dog in the Toy Story movies) and look at it from the side then it looks like a sine wave. But if you move around you can see it's a spiral. If you can use AutoCAD at all you can recreate this 'spiral around a spiral' image for two wavelengths (although after that, the 3d co-ordinates become very difficult to calculate).

Another thought early on is that it's a good idea to read as many books as possible several times over throughout this whole process (I come on to the reading list below). This gives your mind the best chance to fuse everything together, sifting the information into its 'common' sense. This 'sifting' and 'fusing' process is what will be making your trading knowledge become second nature. A knowing if you like, rather than a knowledge.

For the moment, the books on the reading list are the Elliott Wave Principle by Frost & Prechter, and The Profit Magic of Stock Transaction Timing by James Hurst. Hurst's book can be difficult to find, but have a good google and see what's out there, even if it's second hand. I think the ISBN is 9780130950758. (I've just had a quick look and I think it's currently out of print, so used ones have high price tags. It's not priority so if it's difficult to get hold of then forget it until it's back in print. I'll think of an alternative for my next post.)

Also remember, you are reading the Elliott and Hurst books to first learn about different models of market behaviour, and not for any associated trading methods. Learning the melody of market comes first, then you can think of how to trade it.


That's it for now ... tune in next time for part three ...

Last edited by PollyM; Jan 9, 2012 at 9:55pm.
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Old Jan 10, 2012, 9:54am   #49
 
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Re: Where do I start?

Now, I've had a rummage around in the loft.

This one didn't cross my mind yesterday ... Technical Analysis of the Financial Markets by John J Murphy. This is essentially an encyclopedia for basic trading concepts, including the (Elliott) wave and (Hurst's) cyclic models. This is a well written book which is certainly worth it's weight. Again, check the cost of new and used, even if it means having a book shipped from abroad to find the best value.

So, for the moment it's Murphy's encyclopedia and Frost & Prechter's (F&P's) that's on the reading list. F&P's is still good to have even though the Elliott Wave is in Murphy's book, as it discusses the natural characteristics of the fractal patterns which markets trace. This is important, as once your mind processes this information, you no longer see yourself as separate to the markets, and the fear and myths that are generated about the markets begin to fall away. You no longer see trading as a fight (as the fear and myths propagate), but a good ol' sing-song.

... Tune in later for part four...

Last edited by PollyM; Jan 10, 2012 at 10:08am.
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Old Jan 10, 2012, 2:55pm   #50
 
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Re: Where do I start?

Onwards and inwards ...

While you're waiting for the books to arrive, here are some analogies to help your understanding. If you do a bit of googling in the mean time on the Elliott wave and any other new words I mention this will help put things into context.

The 'perfect' Elliott wave is made up of 8 sub-waves, which fit together like jigsaw pieces to form a larger construction of self-similar appearance. This pattern is repeated as you look at even larger Elliott waves (ie telescopically), and also as you examine the smaller waves in greater detail (ie microscopically). It maps out a fractal pattern, one that has been 'perfectly' produced to reflect what is observed in nature (eg coastlines, mountain ranges, price charts, etc).

Now, going back to the spiral formation I mentioned in an earlier post, try to think of the Elliott wave in 3d. Hurst did actually also draw an Elliott wave early on in his book as a model, possibly without realising it at the time, although he later went on to consider the factor between two wavelengths as half that of the Elliott wave. Fusing then the Elliott wave and Hurst's sine wave models together, each up and down of a sine wave can be thought of as one revolution or season. Each one of those revolutions or seasons contains within it a series of smaller revolutions or seasons, and so on.

I use the word seasons because it helps to define different stages of progression. So, the first/second waves are spring, the third/fourth waves are summer, the fifth and sixth waves are autumn/fall, and the seventh/eighth waves are winter.

Please do not misunderstand, I am not saying here that the financial markets follow the timeline of the physical seasons we experience in the weather outside. I am using the word seasons in an abstract form, as an analogy, for each chart has its own unique timeline. It is no different to me talking about 'four seasons in one day', or 'eight days a week'.

That's it for the moment ... I'll have to think about how to get the odd file attached to my posts. I've one I did quite a while ago which sums together individual sine waves and allows you to moves around the variables to see how the combined waveform looks. I'll also dig around and see what other little ditties I have.

Please also be patient, there's plenty of time to go where you are wanting to get to. I'll be moving into trading methods before you know it, where even more fun can be had.

Bye for now ...
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