Uni Grad looking to learn.

[SlowlyButSurely]

Hi there everyone, I recently signed up to T2W after browsing through the content for the past week.

I have recently graduated from University and am studying a second language abroad. I have some spare time and have decided to pursue a childhood dream of becoming a trader.

I really have very little knowledge at the moment but was good at economics when at school. I am starting with the very basics, learning what stocks, options and futures are. Next ill start looking at entry and exit points etc.

My real aim is to prepare myself to get a job in the industry, a friend recommended i take CISI Regs, and also the derivatives and securities exams in order to stand a better chance of getting into the industry.

Would you guys agree? What else can i do to improve my chances, and what are the best ways to get to grips with the charts and their meanings? ( i get bewildered when trying to comprehend them at the moment).

Thanks very much in advance,

Oliver

 

[VielGeld]

Would you guys agree? What else can i do to improve my chances, and what are the best ways to get to grips with the charts and their meanings? ( i get bewildered when trying to comprehend them at the moment).

Thanks very much in advance,

Oliver

Sit in front of your computer all day, every day and make practice trades.

Note your observations, accumulate performance data for your trades, and learn how the market moves.

You'll get it eventually, and maybe you'll even start making good calls. There is no substitute for experience, so go get it!

 

[SlowlyButSurely]

Thanks for the reply VielGeld,

I don't think i am ready to start practice trading yet, im not even sure how i would accumulate performance or what markets to look at. Could you recommend some starting resources?

For now im learning about probabilities and fundamental + technical analysis. Next will probably be looking at entry and exit points. Once i have a game plan i will look at getting into paper trading, most likely in currencies as Forex offer free demos.

 

[VielGeld]

Sure you can practice trade!

Just pick a market and start watching. You can even look up the main market indexes on Google/Yahoo Finance if you want something really easy to start with.

Forget about news, fundamentals, technicals, etc. The only thing that matters is supply/demand (i.e buyer/seller interaction). Anything and everything else derives from that. What you want to do is get an idea of how the market moves. Then you can apply filters like fundamentals, technicals, Elliot Wave, Sunspots if you want, etc.

How can you know probabilities and what's an entry or an exit if you don't know how the market moves? That's where practice comes in.

As for getting started, here's a rundown:

1) Play around. Learn about markets and instruments (stocks, bonds, futures, options, forex, etc.)

2) Pick one you seem to like (hint: don't be afraid of leverage, but don't load up on it, either).

3) Open up a couple charts for this market/instrument and pick a time frame that seems to suit you.

4) Experiment. Find out whether you prefer making short-term trades or long-term position stuff (hint: I would recommend starting by scalping, or very short-term trades in nature. It's an exercise that can help you tune in to the market's rhythm).

5) Learn how a market moves (hint: what's a trend? What's a trading range? Why does this happen?).

6) Formulate a strategy based on your understanding of the market. This will not be obvious.

7) As for performance stats, it can be:

- Date/time of entry/exit
- How far did it go in your favour before you took an exit (Maximum Favourable Excursion (MFE)).
- How far did it go against you before you took an exit (Maximum Adverse Excursion (MAE))
- Profit/loss
- Type of trade
- Pro-/Contra-trend

Then you segregate by your best types of trades, and you focus on seeing whether you have an edge here or not. If not, keep practicing.

8) Once you have a method, work on sticking to it. This is the psychology part of the game, and the most important. It is what determines if you are profitable or not. The line between being a winner and a loser is razor-thin. Only you can make it a winning strategy!

9) Grind, grind, grind like a madman! Cut those losses, and run the profits. Much, much, much harder to do than it seems at first glance.

------

Now, chop, chop, Mr. Slow. Get trading; the only way to know if it's for you is to try it out (on demo, mind you)! Time waits for no one.

Just remember that trading is experiential in nature, and no one can teach you how to trade, but we can certainly help you learn it!

Good luck!

 

[SlowlyButSurely]

Ok thanks so much for your help, your second post has some great information in it which i will begin reading up on. I have started watching the Forex markets and already im interested by the dip in price of the Euro/USD since the end of March. I am going to make notes on the patterns of behaviour and simulate what i believe will happen - which is that eventually it will rise again as it has in the past (looking at the past year).

I am probably doing it wrong but at least its all theoretical. I will also look at the market indexes on Google as nice and simple seems to suit me for the time being.

Once again thanks for your help!!

Also, if anyone else wants to chip in feel free, im a sponge at the moment and the more information the better...

Slow but steady the Turtle wins the race

 

[SlowlyButSurely]

PS. I have discovered that todays dip in the Euro was down to Spains poor performance in its bond auctions, and this was probably realised by the market in the previous days running up to it, however i still maintain the theory that the Euro will eventually bounce back up (government/european bank interventions) and it would be wise to invest on the way up.

Anyway ill keep track of events

 

[counter_violent]

PS. I have discovered that todays dip in the Euro was down to Spains poor performance in its bond auctions, and this was probably realised by the market in the previous days running up to it, however i still maintain the theory that the Euro will eventually bounce back up (government/european bank interventions) and it would be wise to invest on the way up.

Anyway ill keep track of events

Well that's a great lesson learnt. You already know that the markets are being manipulated all the time.

As for the Eurozone...i'm rather hoping that it will all fall apart in short order, then we can get back to the days of common sense, proper accounting, no welfare, small government, full employment and generally people living within their means.
:smart:

 

[new_trader]

Sit in front of your computer all day, every day and make practice trades.

Note your observations, accumulate performance data for your trades, and learn how the market moves.

You'll get it eventually, and maybe you'll even start making good calls. There is no substitute for experience, so go get it!

There is no way you can be sure of this. Most will never get it and give up or go broke. Profitable trading isn't a skill that you learn simply by rote. Although I'm sure many here live in hope and will disagree...

 

[SlowlyButSurely]

Profitable trading isn't a skill that you learn simply by rote. Although I'm sure many here live in hope and will disagree...

I think he meant just to see how the market behaved and to get a feel of it. Using a Forex demo has helped me understand the graphs a lot better which is a positive. Also it reinforces my real problem understanding how to use stops and limits. I will have to do some homework on this!

Is there any resources you could share which you think would help set me on the right road?

Thanks,

Oliver

 

[VielGeld]

I think he meant just to see how the market behaved and to get a feel of it.

Exactly. If you spend 16 hours a day just watching your screen, you'll notice recurring patterns or other market behaviors. It can't not happen if you're at least paying attention.

Of course, being profitable is another thing entirely, but just getting a feel for market movement is entirely doable.

As for resources, there's plenty online, though with a caveat: the most you'll get from reading books is the following:

- Money/risk management

- Psychology

There is, as far as I know, very, very little of legit in terms of methods; these can only be developed and practiced individually which is one reason for the high failure rate. There is no Holy Grail, only you, your method, and your experience.

I'll make a list of good books later -- gotta run for now.

 

[SlowlyButSurely]

Viel Geld, i have been watching the forex market and have noticed some trends, a lot of what happens there is event-related (such as spanish bond auctions going poorly and a poor outlook for europe sending the EUR down).

I figure that concerning the forex market, technical analysis is probably more useful than fundamental...and have started learning and implementing SMA, EMA and bolinger bands. although i still need a lot of practice in reading the markets for signs. I have studied the elliott wave theory but cannot seem to ever spot it in the live charts.

I was wondering if you thought taking FSA regs, and exams in derivatives and securities would give me a good chance in getting a job as an apprentice or junior analyst etc at a firm?

Also thank you scose-no-doubt, i have signed up to that website too and find the learning resources really great!!

 

[EulerFourier]

If you have a degree in a technical field try getting into a professional firm. It will be much easier than trying to do this on your own. If you really want a career in this run run run away as fast as you can from all the technical analysis stuff and all the forums, it will only pollute your mind with nonsense. Seriously 99.9% of everything written on trading forums/trading books/trading articles is complete and utter garbage written by losers who have never and will never make a cent in the markets. Consider this post to be no different and start learning from the exchange websites and graduate texts on finance.

 

[SlowlyButSurely]

So how did you guys get into trading and what do you trade in? Im interested to hear some back stories if you are willing to divulge.

 

[tuscan]

If you have a degree in a technical field try getting into a professional firm. It will be much easier than trying to do this on your own. If you really want a career in this run run run away as fast as you can from all the technical analysis stuff and all the forums, it will only pollute your mind with nonsense. Seriously 99.9% of everything written on trading forums/trading books/trading articles is complete and utter garbage written by losers who have never and will never make a cent in the markets. Consider this post to be no different and start learning from the exchange websites and graduate texts on finance.

I agree with that, just want to add the fact that losers and idiots can be found everywhere, also "within the industry". These idiots are just provided with specific knowledge, specific tasks and the capital, spoon fed with information so only an idiot would not do the job right. Sometimes they are even PhD's "with experience", but this does not change their base. They are not the brightest minds.

 

[ChocolateDigestive]

i recommend you read reminscences of a stock operator and always trade with the trend. good luck

 

[SlowlyButSurely]

Well unfortunately my degree is in business so not really related to the industry. I could go into retail management or service ops but i have no passion for it and would much rather a career in trading.

At the moment i am practising using the foreign exchange as my basis as well as learning all that i can about trading. I like fundamental analysis but think that some technical can be useful when trying to understand charts. That said most of what happens in the FX market is down to news. Such as this mornings EUR decline

 

[tuscan]

Face the fact that probability of getting a trader position is in your case very low (very delicately speaking) as you dont have any educational or professional background. You did totally different things in your life and now you suddenly want to be a trader.
Save your time and don't expect being hired by someone this year or the next year. Don't expect but you can try and it is good to believe in miracles, they HAPPEN in life, but be aware that would be a miracle.

There are guys who had knew they wanted to be a trader when they were 17 , they adjusted their way , got related education and with some luck or belief they got a position.
By expecting to be hired within next 2 years you consider yourself better than this type of people.
What an arrogance!

Learn, earn some money and go to trading arcade as self backed trader so you'll get a sense of a reality you are talking about.

 

[SlowlyButSurely]

Face the fact that probability of getting a trader position is in your case very low (very delicately speaking) as you dont have any educational or professional background. You did totally different things in your life and now you suddenly want to be a trader.
Save your time and don't expect being hired by someone this year or the next year. Don't expect but you can try and it is good to believe in miracles, they HAPPEN in life, but be aware that would be a miracle.

There are guys who had knew they wanted to be a trader when they were 17 , they adjusted their way , got related education and with some luck or belief they got a position.
By expecting to be hired within next 2 years you consider yourself better than this type of people.
What an arrogance!

Learn, earn some money and go to trading arcade as self backed trader so you'll get a sense of a reality you are talking about.

Thanks for your honesty, I dont feel i am better than anyone else, although i would say that I could be better with training than someone who has a degree in economics (their degree may not mean they are actually a good trader).

Also i was thinking more along the lines that...someone with great qualifications would attempt to get a job with an IB, that is why i was thinking more along the lines of Prop Houses to start my career. I will continue studying for sure, as the subject has interested me for many years - i just never knew what i wanted to do for the rest of my life at 18 so just went with the flow.

 

[tuscan]

the subject has interested me for many years

That would change a lot if you were interested for many years but the type of questions you ask indicate something different.
Anyway I believe that you can be a successfull trader if you really want.

 

[tuscan]

although i would say that I could be better with training than someone who has a degree in economics (their degree may not mean they are actually a good trader).

Yes, that is right, actually. That's why I wrote about people who WERE interested for years in the subject and they were taking their courses with that idea in mind of becoming a trader whether it was economics, finance, mathematics or something else. This changes the whole idea of "a degree". I think you undervalue what your competitors could have been doing for the last years. If you were aware of that, it is easier for you to understand the point where you are therefore easier to get to the point you want to be.

Degree doesn't really make you ready for anything. It can only prove you have SOME familiarity with scientific way of thinking. Whatever job you start to do (ok maybe not including very specific professions like a doctor, an astronaut and many others, but in business mainly) , you learn everything from the beginning. Finished university is only the foundation of the knowledge you need to do some kind of work.
PS the most desired graduates in trading are not economists or financists