Newbie - first month towards day-trading

Hi guys,

Been reading this forum for a few weeks, and recently joined, so I thought I would finally introduce myself. I am a 21 year old Londoner, keen on becoming a successful day-trader, in the US stock market.

One month ago, my knowledge of trading was pretty much as low as you could get. In a bid to see if trading was "my thing", I was put in touch with an acquintance (a friend of a friend) who had tried day-trading and figured - after a long 2 years and £7,000 loss - that trading was not for him. "If you are a gambler at heart, trading is not for you" - that is what he told me as he handed over a bunch of DVDs.

The two DVD courses, Tony Oz's "Stock Training School", and OnlineTradingAcademy's "Professional Trader Series Part I & II". What I learnt from these, in order of when I would use them:

Pre-trade
- Pre-market, keep an eye on the news. Global news. Big stories that are political, economic, or business related - especially from US, UK and Asia - will have an impact on how bullish/bearish the different market indices will be for that day.

- As a novice, I only need to trade a few stocks. Get to know my stocks inside out. Picking my stocks: I need to to find a strong sector relative to the market, and a weak sector relative to the market, then pick 2 of the strongest stocks from the strong sector, and 2 of the weakest stocks from the weakest sector. All the stocks should have the preferable characteristics: Average Daily Volume > 1,000,000. Bid/Ask spread of $0.01, and a beta of 1.00-1.99.
It is helpful to know the key dates for my stocks, such as quarterly reports and the such.

During market hours
- I should try to avoid trading the first 30-45 minutes, and the last 30-45 minutes of the market as this is usually when the market is most volatile. Also, as a general rule, I should try not to trade in the "2 hour lunch" (between 12-2pm) as this is when the market is usually in consolidation.

- Top down approach: First thing I should know, before I even look at my stocks, is how the market is behaving. Use the first 45 minutes of non-trading to do this. Keep an eye on $tick and $trin, to help decipher how bullish or bearish the market may be. In a bullish market, keep more of an eye on my stronger stocks, and trade them long only. Vice-versa for a bearish market. I should be keeping an eye on an index throughout the whole day, and especially before I make a trade. The S&P500, for example, would be an acceptable index to monitor. Trade in the same direction as the market.

- Know my market makers. Using Level II, learn who the dominating market-makers are for my stocks; knowing who they are and what positions they are taking can be useful information, and will be something that other novices probably fail to keep an eye on.

Technical Analysis
- Become familiar with, and plot, "support" and "resistance" levels for my stocks. Learn the different chart patterns such as "head and shoulders", "Cup and handle", "double bottom", "double top", and learn to read candlesticks such as "Doji", "Hammer", "Morning star", "Evening star", "Dark Cloud" etc. Do not use them as a sole reason to enter a trade, but to help paint an overall picture.

- Learn to use "trend indicators" such as Parabolic SAR, MACD and Exponential moving averages to help indicate the direction of a trend. Also, learn to use "momentum indicators" such as CCI, RSI and Stochastics to help determine when a trend has become "exhausted". Once again, as with patterns and candlesticks, indicators should help me paint an overall picture and NOT be used as a sole reason to enter a trade. However, "Momentum" indicators can make good exit signals on their own.

Trade & Money management
- Learn money management. I should be aware that the number one rule in day-trading is "do not lose money". Making money should be an afterthought. Make a plan, and stick to it; set stop losses, and if they are hit then exit the trade. Do not let the trade run in "hope" that it will turn around. Have realistic profit targets, and set a stop loss that is 3x smaller than the profit target. Be patient, and in control of my emotions. Fear and greed drive the market - use this to my advantage, and not to my detriment.

- For my first few months, I should trade with only 100 shares. Make only 2-3 trades a day. Once again, patience is key. Analyze the market, and analyze my trades. Write all my trades down, with entry price, exit price, profit/loss, reasons why I entered the trade, and anything else that I feel will help me learn and progress. If no highly probable trades are available that day, DO NOT TRADE. The market will still be there tomorrow.

- I should learn how to manage my trades. Trailing stops are paramount. Do not let greed drive me. At reaching 30% of my target profit, I should move my stop to breakeven. At 50% of profit target, I should move my stop to 20% of profit target. At 75% of target, move the stop up to 40%. At 100% of my target, I should sell 50% of my shares and let the other 50% run, using the 100% of target as my final stop.

- As a novice, I should not hold any overnight positions. Markets and stocks can, and very frequently do, gap up and gap down. Knowing when to keep overnight positions will come with experience. Also, I should not trade during after-hours.

Things I learnt from reading this forum:

- Multi time-frame analysis: if I am trading using 1-minute charts, use 3-minute and 5-minute charts to confirm trend direction. Do not trade against the trend direction of 5-minute and 3-minute charts. New trends are born at the smaller time frames, but the bigger time frames dominate. Probability of trade success increases by going with the higher time-frame trends, when the lower time-frame dictates to do so.

- During consolidation periods, if a price falls/rises out of the consolidation on higher than average volume, this is a sign of that price will continue in that direction.

- 90% of traders fail. Therefore, I should not trade on borrowed money. Save up $25,000. Use the time that I require to make those savings, wisely. Familiarize myself with patterns and charts, use trading platforms such as NinjaTrader (which is free) to simulate trading. Purchase a live-data feed for NinjaTrader and trade as if I were trading with real money. I should not base any success in "paper trading" as projections for future success. Live trading is a completely different kettle of fish. Use it to perfect entry, exit, stop-loss, money management and "becoming one" with the market.
I should be aware that my first year I will probably end up with a loss. My aim should be to keep my $25,000 balance above $22,000. This should be considered a success as it leaves me to fight another year in the markets, but this time with a years experience behind my belt.

Right, now I'm sure I've missed some stuff out, and I'm sure somethings that I have learnt are wrong. I would love and be grateful to you experienced traders to help correct/add to my current knowledge base.

I am here to learn.

Regards,
Twistedheat.

Hi Twistedheart,
Good luck at this game.
There are 1000s of systems people have worked out over the years.
the most important thing i can give you is
PROTECT THE CAPITAL AND AFTER THAT PROTECT THE CAPITAL to trade another day.

As for not trading the first 45 mins, that is when i tend to do the most trading, as I like to get in nearly and finish early. but each to each one to there own

Hi twistedheat,
Welcome to T2W!
As a fellow day trader of U.S. equities, I'll offer my thoughts. Please keep in mind that my ramblings are just that 'my opinion' - so please don't attach any particular weight to my comments.
First things first: there's a bespoke U.S. forum here on T2W - so I suggest you check that out. Currently, the two main 'heavyweight' members (i.e. successful day traders) are Grey 1 who has his own private forum (membership is free) and Mr. Charts. Their respective styles are very different, but you can learn a lot from them both.

twistedheat said:

"If you are a gambler at heart, trading is not for you".

Click to expand...

Good advice. Until you know - without a shadow of a doubt - the difference between what you do as a trader and what a 'shoot from the hip gambler' does - then don't trade, coz' chances are you're gambling and not trading.

twistedheat said:

Pre-market, keep an eye on the news. Global news. Big stories that are political, economic, or business related - especially from US, UK and Asia - will have an impact on how bullish/bearish the different market indices will be for that day.

Click to expand...

Yes, what you say is true and is fine - to a degree. The problem with assessing all the pre-market information is that it colours your view about what is likely to happen when the market opens. I was caught out by this only last week when (unsurprisingly) the news was doom and gloom, the market gapped down at the open and I was conditioned into thinking that it would fall - just as the U.K. and Asia had done earlier in the day. The result: my biggest single day loss in a very long time. That's right, I LOST a bucket load of money by being short the market!!!

twistedheat said:

As a novice, I only need to trade a few stocks. Get to know my stocks inside out. Picking my stocks: I need to to find a strong sector relative to the market, and a weak sector relative to the market, then pick 2 of the strongest stocks from the strong sector, and 2 of the weakest stocks from the weakest sector. All the stocks should have the preferable characteristics: Average Daily Volume > 1,000,000. Bid/Ask spread of $0.01, and a beta of 1.00-1.99.
It is helpful to know the key dates for my stocks, such as quarterly reports and the such.

Click to expand...

A good starting point although the 1 cent spread isn't that easy to find in my experience and isn't that vital either. If a stock has a daily Average True Range (ATR) of >$5.00 - e.g. AMZN - then a $0.01 spread isn't important. A wider spread is acceptable. However, If you trade a stock like QLGC, then a tiny spread is vital because the daily ATR is a dollar or less.

twistedheat said:

I should try to avoid trading the first 30-45 minutes, and the last 30-45 minutes of the market as this is usually when the market is most volatile. Also, as a general rule, I should try not to trade in the "2 hour lunch" (between 12-2pm) as this is when the market is usually in consolidation.

Click to expand...

The first and last periods of the day are indeed the most volatile - but they are also the periods that offer the most opportunities for profit. To be cautious and conservative - as you seem to be - is very sensible and wise. On the other hand, it begs the question as to why you want to trade U.S. equities if you want to shun the two best opprtunities for profit (and loss, obviously). If you're not wanting to embrace these periods (that's fine, no criticism implied or intended), then you may want to consider a less volatile market over a longer timeframe, e.g. swing trading U.K equities instead?

twistedheat said:

Top down approach: First thing I should know, before I even look at my stocks, is how the market is behaving. Use the first 45 minutes of non-trading to do this. Keep an eye on $tick and $trin, to help decipher how bullish or bearish the market may be. In a bullish market, keep more of an eye on my stronger stocks, and trade them long only. Vice-versa for a bearish market. I should be keeping an eye on an index throughout the whole day, and especially before I make a trade. The S&P500, for example, would be an acceptable index to monitor. Trade in the same direction as the market.

Click to expand...

You may be one of those bright young things that can do all of the above and enter your trades, place stop and limit orders and a hundred and one other things at the same time. All credit to you if you can. I can't, so I keep it real simple: I monitor SPY (the etf for the S&P 500) and the sector etf and two charts of the stock I'm trading (2 timeframes) and that's it. I can't cope with more than that!

twistedheat said:

Know my market makers. Using Level II, learn who the dominating market-makers are for my stocks; knowing who they are and what positions they are taking can be useful information, and will be something that other novices probably fail to keep an eye on.

Click to expand...

The benefits or otherwise of level II are hotly debated. Some traders - e.g. Mr. Charts and Naz both swear by it, but both point out that it's pretty useless most of the time. Others, e.g. Grey1 don't use it at all. Personally, I don't use it, but I should make clear that's because I'm a simple soul and I'm just not clever enough to interpret all those flashing numbers in a blink of an eye. Again, if you can - all credit to you.

twistedheat said:

- Become familiar with, and plot, "support" and "resistance" levels for my stocks. Learn the different chart patterns such as "head and shoulders", "Cup and handle", "double bottom", "double top", and learn to read candlesticks such as "Doji", "Hammer", "Morning star", "Evening star", "Dark Cloud" etc. Do not use them as a sole reason to enter a trade, but to help paint an overall picture.

Click to expand...

Without wishing to be rude or unhelpful twistedheat, I'm starting to wonder if these are your own thoughts or just a list of things you've copied and pasted from another source? Of the list quoted, focus primarily of support and resistance - the rest is (relatively) unimportant. Patterns like head and shulders will do you and your account more harm than good until you understand the forces at play that create them. Trade them blindly and you will lose money over time, I promise you.

twistedheat said:

Learn to use "trend indicators" such as Parabolic SAR, MACD and Exponential moving averages to help indicate the direction of a trend. Also, learn to use "momentum indicators" such as CCI, RSI and Stochastics to help determine when a trend has become "exhausted". Once again, as with patterns and candlesticks, indicators should help me paint an overall picture and NOT be used as a sole reason to enter a trade. However, "Momentum" indicators can make good exit signals on their own.

Click to expand...

Where have you got this stuff from!?!?
As with patterns like head and shoulders, indicators are only of value if you understand exactly how they are constructed, how they can mislead you and when they shouldn't be used. Please note the negative bias of my comment. To enter a trade simply because 'the red line crossed the blue line' will end in disaster as sure as eggs are eggs. Indicators are fine if - and only if - you understand their limitations.

twistedheat said:

Learn money management. I should be aware that the number one rule in day-trading is "do not lose money". Making money should be an afterthought. Make a plan, and stick to it; set stop losses, and if they are hit then exit the trade. Do not let the trade run in "hope" that it will turn around. Have realistic profit targets, and set a stop loss that is 3x smaller than the profit target. Be patient, and in control of my emotions. Fear and greed drive the market - use this to my advantage, and not to my detriment.

Click to expand...

Now I know this is a 'copy 'n' paste job! Whilest the above is correct - broadly speeking - putting it into practice is a a whole lot easier said than done.

twistedheat said:

For my first few months, I should trade with only 100 shares. Make only 2-3 trades a day. Once again, patience is key. Analyze the market, and analyze my trades. Write all my trades down, with entry price, exit price, profit/loss, reasons why I entered the trade, and anything else that I feel will help me learn and progress. If no highly probable trades are available that day, DO NOT TRADE. The market will still be there tomorrow.

- I should learn how to manage my trades. Trailing stops are paramount. Do not let greed drive me. At reaching 30% of my target profit, I should move my stop to breakeven. At 50% of profit target, I should move my stop to 20% of profit target. At 75% of target, move the stop up to 40%. At 100% of my target, I should sell 50% of my shares and let the other 50% run, using the 100% of target as my final stop.

- As a novice, I should not hold any overnight positions. Markets and stocks can, and very frequently do, gap up and gap down. Knowing when to keep overnight positions will come with experience. Also, I should not trade during after-hours.

Click to expand...

While there's nothing inherently wrong with the statements quoted, whether or not they are applicable to you and you style of trading is another matter entirely. Horses for courses. If you've got absolutely no idea where to start, then by all means start with a canned approached picked up from books or the net etc. But don't take it as gospel - there is no one right or wrong way to trade and no two traders are the same.

twistedheat said:

Multi time-frame analysis: if I am trading using 1-minute charts, use 3-minute and 5-minute charts to confirm trend direction. Do not trade against the trend direction of 5-minute and 3-minute charts. New trends are born at the smaller time frames, but the bigger time frames dominate. Probability of trade success increases by going with the higher time-frame trends, when the lower time-frame dictates to do so.

- During consolidation periods, if a price falls/rises out of the consolidation on higher than average volume, this is a sign of that price will continue in that direction.

- 90% of traders fail. Therefore, I should not trade on borrowed money. Save up $25,000. Use the time that I require to make those savings, wisely. Familiarize myself with patterns and charts, use trading platforms such as NinjaTrader (which is free) to simulate trading. Purchase a live-data feed for NinjaTrader and trade as if I were trading with real money. I should not base any success in "paper trading" as projections for future success. Live trading is a completely different kettle of fish. Use it to perfect entry, exit, stop-loss, money management and "becoming one" with the market.
I should be aware that my first year I will probably end up with a loss. My aim should be to keep my $25,000 balance above $22,000. This should be considered a success as it leaves me to fight another year in the markets, but this time with a years experience behind my belt.

Click to expand...

Yes - ish, although I wouldn't pay too much attention about the oft quoted failure statistic. Trading is a business like any other and your chances of success are about the same as starting a restaurant - assuming you know nothing about the catering business. Can't comment on Ninja Trader as I don't use it. The $25k thing is a SEC regulation if you day trade U.S. equities via direct access (as opposed to spread betting or CFD's).
My tip would be to think for yourself and don't just go with something you've read in a book or on the net. Challenge what you read and hear and only accept it and utilise it once you've tested it and find that it fits with your personality and your style of trading. So, just because a trader you know, like and respect uses the CCI indicator to great effect - doesn't necessarily mean that you should too. What works for him/her may not work for you.
Best of luck.
Tim.

timsk said:

Hi twistedheat,
Welcome to T2W!
As a fellow day trader of U.S. equities, I'll offer my thoughts. Please keep in mind that my ramblings are just that 'my opinion' - so please don't attach any particular weight to my comments.
First things first: there's a bespoke U.S. forum here on T2W - so I suggest you check that out. Currently, the two main 'heavyweight' members (i.e. successful day traders) are Grey 1 who has his own private forum (membership is free) and Mr. Charts. Their respective styles are very different, but you can learn a lot from them both.


Good advice. Until you know - without a shadow of a doubt - the difference between what you do as a trader and what a 'shoot from the hip gambler' does - then don't trade, coz' chances are you're gambling and not trading.


Yes, what you say is true and is fine - to a degree. The problem with assessing all the pre-market information is that it colours your view about what is likely to happen when the market opens. I was caught out by this only last week when (unsurprisingly) the news was doom and gloom, the market gapped down at the open and I was conditioned into thinking that it would fall - just as the U.K. and Asia had done earlier in the day. The result: my biggest single day loss in a very long time. That's right, I LOST a bucket load of money by being short the market!!!


A good starting point although the 1 cent spread isn't that easy to find in my experience and isn't that vital either. If a stock has a daily Average True Range (ATR) of >$5.00 - e.g. AMZN - then a $0.01 spread isn't important. A wider spread is acceptable. However, If you trade a stock like QLGC, then a tiny spread is vital because the daily ATR is a dollar or less.


The first and last periods of the day are indeed the most volatile - but they are also the periods that offer the most opportunities for profit. To be cautious and conservative - as you seem to be - is very sensible and wise. On the other hand, it begs the question as to why you want to trade U.S. equities if you want to shun the two best opprtunities for profit (and loss, obviously). If you're not wanting to embrace these periods (that's fine, no criticism implied or intended), then you may want to consider a less volatile market over a longer timeframe, e.g. swing trading U.K equities instead?


You may be one of those bright young things that can do all of the above and enter your trades, place stop and limit orders and a hundred and one other things at the same time. All credit to you if you can. I can't, so I keep it real simple: I monitor SPY (the etf for the S&P 500) and the sector etf and two charts of the stock I'm trading (2 timeframes) and that's it. I can't cope with more than that!


The benefits or otherwise of level II are hotly debated. Some traders - e.g. Mr. Charts and Naz both swear by it, but both point out that it's pretty useless most of the time. Others, e.g. Grey1 don't use it at all. Personally, I don't use it, but I should make clear that's because I'm a simple soul and I'm just not clever enough to interpret all those flashing numbers in a blink of an eye. Again, if you can - all credit to you.


Without wishing to be rude or unhelpful twistedheat, I'm starting to wonder if these are your own thoughts or just a list of things you've copied and pasted from another source? Of the list quoted, focus primarily of support and resistance - the rest is (relatively) unimportant. Patterns like head and shulders will do you and your account more harm than good until you understand the forces at play that create them. Trade them blindly and you will lose money over time, I promise you.


Where have you got this stuff from!?!?
As with patterns like head and shoulders, indicators are only of value if you understand exactly how they are constructed, how they can mislead you and when they shouldn't be used. Please note the negative bias of my comment. To enter a trade simply because 'the red line crossed the blue line' will end in disaster as sure as eggs are eggs. Indicators are fine if - and only if - you understand their limitations.


Now I know this is a 'copy 'n' paste job! Whilest the above is correct - broadly speeking - putting it into practice is a a whole lot easier said than done.


While there's nothing inherently wrong with the statements quoted, whether or not they are applicable to you and you style of trading is another matter entirely. Horses for courses. If you've got absolutely no idea where to start, then by all means start with a canned approached picked up from books or the net etc. But don't take it as gospel - there is no one right or wrong way to trade and no two traders are the same.


Yes - ish, although I wouldn't pay too much attention about the oft quoted failure statistic. Trading is a business like any other and your chances of success are about the same as starting a restaurant - assuming you know nothing about the catering business. Can't comment on Ninja Trader as I don't use it. The $25k thing is a SEC regulation if you day trade U.S. equities via direct access (as opposed to spread betting or CFD's).
My tip would be to think for yourself and don't just go with something you've read in a book or on the net. Challenge what you read and hear and only accept it and utilise it once you've tested it and find that it fits with your personality and your style of trading. So, just because a trader you know, like and respect uses the CCI indicator to great effect - doesn't necessarily mean that you should too. What works for him/her may not work for you.
Best of luck.
Tim.

Click to expand...

I appreciate the feedback.

Sad enough to say, I typed that all myself. Although, I can pretty much guarentee it may as well have been a copy and paste job, as it is all stuff I have regurgated from what I learnt during the past month. Fresh in the memory, and all that. None of what I have written can constitute as "my thoughts", for I have never traded, it pretty much was what I, in my current capacity, have been led to believe works in the market.

You are correct though, having too many parameters and "rules" lead to saturation of thought and too many variables only add to the noise. The best thing for me to do would be to K.I.S.S (keep it simple, stupid).

I have already read some of Grey1's post, but was denied access to his group (being a newbie). Mr. Chart's method seems wonderfully simple - the trend is your friend, take a slice of it. However, his method relys on finding stock that are in an obvious bearish/bullish trend; unless I know his method of finding those stocks on a daily basis, it would be something I would find hard to replicate.

That being said and done, in truth I think I would prefer to have my own method in trading stocks. It always feels more fulfilling when you know you have completed/overcome something on your own - using Mr. Charts or Grey1's systems would feel like taking a shortcut. (Now watch me lose $25,000 )

Twistedheat,
you seems like a newbie but not quite a newbie. you have done your home work well.
welcome and goodluck

twistedheat said:

Sad enough to say, I typed that all myself. Although, I can pretty much guarentee it may as well have been a copy and paste job, as it is all stuff I have regurgated from what I learnt during the past month. Fresh in the memory, and all that.

That being said and done, in truth I think I would prefer to have my own method in trading stocks. It always feels more fulfilling when you know you have completed/overcome something on your own - using Mr. Charts or Grey1's systems would feel like taking a shortcut. (Now watch me lose $25,000 )

Click to expand...

Hi twistedheat,
Please accept my apologies; it's a very impressive post to write in your own hand - especially as your not yet trading. Your job now is to look at each of the ideas you've presented and decide which of them are appropriate to you and your style of trading and which of them can be discarded. This is no easy task and, in reality, is something that most traders constantly review. At some stage, you may want to organise your thoughts into a trading plan. Click on the icon under my name if you're interested in a template to help create one.

Your comment about shortcuts is an interesting one. The trading world is littered with people who want short cuts and there are any number of vendors who claim to be able to offer them. Anyone who's been around the block a few times will tell you that in reality there are no shortcuts, and that sooner or later you're gonna have to roll up your sleeves and get stuck in. Paying attention to the views and adopting the practices of successful traders isn't taking a shortcut - it's a sensible thing to do, as is ignoring the idiots - of whom there are a great many. Differentiating between the two isn't always easy - especially for a newbie who doesn't know what to look for. If you joined Grey1's forum, you will find a wide variety of traders there and, although they are all interested in his ideas and adopt them to a greater or lesser degree - no two of them are the same and I doubt very much that they feel like they're taking a shortcut by subscribing to his ideas. All trading ideas come from somewhere - including the ones you've written about so eloquently on this thread. So, my advice would be that if you read something on here that gels with you and you can implement to make some money (or help prevent you from losing it) - then take it, use it and don't look back. If you try and work out all this stuff out for yourself (and there's a lot of stuff to work out), it'll take you forever and you'll just end up re-inventing the wheel. So, as and when you stumble upon a needle and some golden thread in the giant haystack that is T2W - seize it firmly, use it and make some money with it. No one will accuse you of taking shortcuts, I promise.
Tim.

Hello Twistedheat, I am also new to trading, I have been studying for the past 1-2 months as well. But the amount of information you have acquired in this period is phenomenal.

The summary of what I have learnt are:

demo, demo, demo, trade your plan on demo, dont rush into trading with real money

Get an education in FX, or stock or precious metals or whatever it is you are trading, study, read , learn, its a life long learning process, and there are lots of free information on the net, so dont go running to pay plenty thousands of pounds or dollars to learn what you can learn for free or at minimal cost, put that money into your savings instead towards when you do start to trade in ernest

Set up ur stop loss before u enter the trade, and you can manage your emotion and dont increase it afterwards, you can move it to lock in your profit accordingly, but never increase it to accomodate a losing trade

Take all emotion out of trading, dont be afraid to walk away if you make a loss, dont try to take revenge on the market

The trend is your friend until it ends, dont try to bet against the trend, ride the trend, and get out when it reverses

Control fear and greed ( the two emotions that lead most people to fail)

Never open a trading account with insufficeint funds, this is another reason in FX trading why people fail. so open a standard account with 100K, a mini account with 10k and a micro account with 1k. I know this thread was original for stock, but I am planning to trade FX, but there are certain principles that appear to run accross different types of trade

I cant over emphasize risk and money management

I am still at the stage of developing a trading strategy, and I tell you, this had been the hardest part for me, so please if anybody can help in that department, I would really appreciate it. Right now, I am favouring a simple system of support / resistance, SMA, candlesticks, and bollinger bands to identify break outs. Thanks y'all

Double post.

Newtrader + Millionaire, thank you for your welcomes.

Millionaire, I completely agree with you that trading with insufficient funds/over-stretching your capital is a quick route to failure. That is why, once I start, I will be trading only 100-200 stocks in the beginning with a stop-loss equivalent to 1-2% of my initial starting "bank".

Timsk, definitely no need to apologise. I think I incorrectly stated my intentions of "not taking shortcuts". What I meant was, that I do not want to just follow a persons trading strategy, word for word, tick for tick, especially if I am unaware of why that strategy works.

In the end, it's almost certain that I will be trading based on a variation of someone elses strategy. However, it will be because I understand the concept of why it works and because it will work to my psychology/style.

I also thank you for the offer of creating a template for a trading strategy. I do not think I am ready to have a strategy yet, as I am still trying to figure out my style of trading (most likely a form of scalping/momentum) but if the offer will still be open in a few weeks time, I grately appreciate your offer.

Hi twistedheat,

twistedheat said:

Timsk, definitely no need to apologise. I think I incorrectly stated my intentions of "not taking shortcuts". What I meant was, that I do not want to just follow a persons trading strategy, word for word, tick for tick, especially if I am unaware of why that strategy works.
In the end, it's almost certain that I will be trading based on a variation of someone elses strategy. However, it will be because I understand the concept of why it works and because it will work to my psychology/style.

Click to expand...

The option of following someone elses strategy "word for word, tick for tick" isn't really available to you anyway as a discetionary trader. I suppose you might get close to cloning someone elses system if you work at a prop' firm or city institution. Even then its doubtful, evidenced by the testimony of Richard Dennis, Curtis Faith and other 'Turtles'. The nearest I've witnesses to this happening here on T2W is in trader-dante's pin bar strategy thread - well worth a gander if you've not yet seen it.

twistedheat said:

I also thank you for the offer of creating a template for a trading strategy. I do not think I am ready to have a strategy yet, as I am still trying to figure out my style of trading (most likely a form of scalping/momentum) but if the offer will still be open in a few weeks time, I grately appreciate your offer.

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The template is just that - a template - and its already written. You can download it by clicking on the document icon beneath my name. That's the easy bit, the hard work comes from completing it - which only you can do.
Enjoy!
Tim.

twistedheat said:

I appreciate the feedback.

Sad enough to say, I typed that all myself. Although, I can pretty much guarentee it may as well have been a copy and paste job, as it is all stuff I have regurgated from what I learnt during the past month. Fresh in the memory, and all that. None of what I have written can constitute as "my thoughts", for I have never traded, it pretty much was what I, in my current capacity, have been led to believe works in the market.

You are correct though, having too many parameters and "rules" lead to saturation of thought and too many variables only add to the noise. The best thing for me to do would be to K.I.S.S (keep it simple, stupid).

I have already read some of Grey1's post, but was denied access to his group (being a newbie). Mr. Chart's method seems wonderfully simple - the trend is your friend, take a slice of it. However, his method relys on finding stock that are in an obvious bearish/bullish trend; unless I know his method of finding those stocks on a daily basis, it would be something I would find hard to replicate.

That being said and done, in truth I think I would prefer to have my own method in trading stocks. It always feels more fulfilling when you know you have completed/overcome something on your own - using Mr. Charts or Grey1's systems would feel like taking a shortcut. (Now watch me lose $25,000 )

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hi

if you kindly re apply I will accept your membership

thanks

Grey1 said:

hi

if you kindly re apply I will accept your membership

thanks

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Grey, thank you for the offer.

I am sending in a request for membership now.