Advice wanted from any experienced traders

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Old Mar 3, 2008, 9:39am   #9
Joined Dec 2004
blueclaret started this thread Yeah I thought 50k was too high! I have been buying shares for the past 3 years or so with up and down results. I make profits and then they go when the market dips although I do place stops all the time so I have learnt something right i guess. I have learnt most of what I know from books and by just doing it. I do not know anyone else who trades and wonder if this is a good thing or bad thing. I feel overwhelmed like all beginners with all the information and martkets etc. My next step is to learn technical analysis and have a system and paper trade etc. I also want to know if you all do have a plan as I have read this is one of the most important things to do. Any help is appreciated.
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Old Mar 3, 2008, 1:18pm   #10
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let's open a whole can of worms

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Originally Posted by blueclaret View Post
Yeah I thought 50k was too high! I have been buying shares for the past 3 years or so with up and down results. I make profits and then they go when the market dips although I do place stops all the time so I have learnt something right i guess. I have learnt most of what I know from books and by just doing it. I do not know anyone else who trades and wonder if this is a good thing or bad thing. I feel overwhelmed like all beginners with all the information and martkets etc. My next step is to learn technical analysis and have a system and paper trade etc. I also want to know if you all do have a plan as I have read this is one of the most important things to do. Any help is appreciated.
hmmmmm. . . . . . . .

I've never been a fan of the percentage rule. Before BBB was banned he did say: if you can trade any amount of money can help, if you can't no amount of money can help.

I believe the percentage rule is mostly applicable to "statistical" systems. A lovely feature of statistical systems is that losing runs are inevitable, because (and I may get a lot of stick for this), statistical systems are actually "brainless", a shoddy attempt to disguise lack of understanding about the market (like all those back testers).

I started trading pennies a point. Then moved to 50 pence a point on finspreads. Had about £50 - £100 in the account at the time. These were my losing days. Finally got consistent, but could not make much money from fins because they "did things" to my interface and made things awkward for me. Moved to trading £1 a point on the DOW with another SB company, about £500 in the account, still slightly losing overall in those days. Had my breakthrough and rammed the account to £1500 in 3 weeks, lost £1200 over the next day or so because I was totally unprepared for the way the SB's company's interface screwed me (lagging and awkward fills). After a few weeks I made it all back and more. Got banned by the SB after a few more weeks, very nice of them I'm sure.

It's the psychological pitfalls that screw you, and I don't have a concept of a losing run, because when you "know" what's going to happen, you just know. I do make losing trades, but that's just because I've been "lazy" or taken on something I knew was weak.

So no, £50K is not required. As long as you can survive financially while you are learning you could just put £100 in a SB account (fins is probably the only company that let you do this) and trade away. Be prepared to accept that you are in for a very long hard slog, it ain't easy, but then again we are talking about not having to work for somebody and gaining your "freedom", and the price of that MUST be high because most people cannot do it.
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Old Mar 3, 2008, 1:46pm   #11
 
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Originally Posted by dbphoenix View Post
Mediocre systems may become profitable with the "right" money management rules applied on paper, but not in the real world. A beginning trader who can't turn a consistent profit is not going to have the confidence to trade, with discipline, a strategy that shows only occasional profit. Even if his money lasts long enough for him to withstand the losses, this is an unnecessarily torturous road to sustained profitability and perpetuates the emotional responses that marginal traders bring to their work.

Db
I do agree with you but surely without due consideration to Money Management which encompasses such things as Position Sizing, % risk per trade, etc, one does not have a "complete "or most probably long-term profitable system.

I say this as when I first started out I put too much emphasis on the obvious elements of a System such as Entry and Exit conditions, etc.

But I definately appreciate that one needs to focus on the basics first!!

All IMO ....
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Old Mar 3, 2008, 2:41pm   #12
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Originally Posted by Chorlton View Post
I do agree with you but surely without due consideration to Money Management which encompasses such things as Position Sizing, % risk per trade, etc, one does not have a "complete "or most probably long-term profitable system.

I say this as when I first started out I put too much emphasis on the obvious elements of a System such as Entry and Exit conditions, etc.

But I definately appreciate that one needs to focus on the basics first!!

All IMO ....
I'll give you a little hint.

I don't use money management. Money management usually go hand in hand with statistical systems because they factor in the losing runs (or draw downs as they are known) as approximate worse case scenarios. But since even the latter cannot be totally predicted (remember it's statistical), you can NEVER be sure that you won't get totally wiped out. See what I'm getting at?

I do have a use for statistics though: I have spent many pleasant days learning advanced probability theory and playing with strange weird calculations that the general population is not interested in.
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Old Mar 3, 2008, 4:44pm   #13
 
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Originally Posted by Chorlton View Post
I do agree with you but surely without due consideration to Money Management which encompasses such things as Position Sizing, % risk per trade, etc, one does not have a "complete "or most probably long-term profitable system.
Eventually. But the trader whose success rate is low and who has seven or eight losers in a row is not likely to let that winner "run" when it finally arrives. He's going to grab that profit as fast as possible since his next trade may well be another loser, and his account is decreasing with each successive loser. Thus his losses outweight his gains and he goes broke long before he achieves any confidence in his system.
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Old Mar 3, 2008, 5:31pm   #14
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Originally Posted by dbphoenix View Post
Eventually. But the trader whose success rate is low and who has seven or eight losers in a row is not likely to let that winner "run" when it finally arrives. He's going to grab that profit as fast as possible since his next trade may well be another loser, and his account is decreasing with each successive loser. Thus his losses outweight his gains and he goes broke long before he achieves any confidence in his system.
hi db & chorlton

agree, think SR mentioned on another thread, I now it makes BSD cringe but.....


you can learn to run a profit and its relative to targets etc my average winner only around 7 pts with a high hit rate

but theres at least 3 trades over +30 and a few more 12-16 ish in the last month to

you can"t improve anything if your not in it, you have a chance to re-group if you are trading high SR method.

If its a 40% SR and 10 losers come along which is to be expected once in a while(1% chance) = your heads in bits if not fully switched on and confident in method etc

How do you learn to hold your nerve on match ball at snooker

keep getting/putting yourself there and try again, perhaps with a different approach / method / rule, once you have done it, next time is a little easier, you have positive expectancy / growing confidence in your ability and method = how can I improve it, can it be improved etc etc

Just don"t damage your bank imho or your F..cked !

game over
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Old Mar 10, 2008, 11:00pm   #15
 
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While DBpheonix's advice about sorting trading strategy out is important, I can't help but agree with Chorlton, in that in my own experience during the 'struggling years' having a profitable method/system just wasn't enough. Why? Because I didn't have the discipline and emotional maturity to trade it consistently. I'm convined that going into the market with any one of the 3 pillars (Method, Money Management & Mindset) unclear is a recipe for failure.

You can have a great method, but while you are developing the discipline and emotional strength to trade it, its your money management that's going to protect you. And yes you may screw up 20 times in a row but if its only a small percentage of your account (ie. 1% or 2%) then you can keep going until you start to get it.
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Old Mar 11, 2008, 5:54am   #16
Joined May 2007
Anyone called Blueclaret and living in London sounds like he supports the right football team to me so I'll give my opinion.

You need to get all three aspects of trading organised, money management and psychology.

As far as your 50K minimum goes, no you don't need that much. If you will be risking 2% on a single trade and once you take commissions and slippage into account you would need to be careful if you have less than 15-20K IMO. (In any case I thought in Come into my Trading Room he suggests that US 20K should be a minimum from memory?)

With regard to how you should trade then it partly depends on how much time you can devote to it and how regularly you can monitor your trades. If you have a full time job then day trading is not for you. Swing trading could work in that case, holding trades from 3-10 days perhaps. That's what I do.

For chart sites I can't help you much. I use Metastock with an EOD datafeed. That works for me and gives me more flexibility than a website ever could but my account is large enough to easily adsorb the cost.

You need to devise a few strategies and start paper trading. Just simple rules. From your reading and from this site you can pick up plenty. Then test them in the market. I'm sure you can make a profit from backtesting but try making the same trades in real time and you will see that it is harder than it looks!
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