what should I do?

[NejemEddine]

Hi guys, I am a newbie trader that have started demo trading,the problem is that I dont have any strategy to work on because after I watched a guide on youtube he told me that the best way to learn trading is actually through trading.So I jumped on tradingview to start my papertrading journey the problem here is that I believe I lack confidence I sometimes make the right calls but whenever the trade go against me I jump out ,I thought that the main problem of my lacking of confidence in my trades is that I dont have a clear setup I just watch price action and jump into trade that I believe it is where the market is going.I told you about my situation I hope that you can give me insight and thanks to everybody

 

[cara2]

You sound like me, to a point.
Gawd, so much of the advice on the net is garbage, you just follow one little hidden expensive to know trick and then it's all profit.
Of course it's like learning the guitar - you read one profound paragraph, understand and apply it, and you're an expert. Not.

I'm another newbie: I try to remember things to do and not do, and I was thinking I should write it down.
So I wrote it down - not all in the right order (that went out of the window) and with a few unrefined or missing things.
This is for me, Day Trading, but it applies to swing trading too. There is more, for ST.

Those who actually know what they're talking about unlike me are invited to criticise.

First - look for the TREND. you want higher highs and higher lows for an uptrend, and vide versa.
DON'T "bet" against the trend at first, because it's harder and if you miss it you can't wait for the next wiggle to turn it back in your favour.
Look at higher time frames to spot the trends - there will be a downtrend within an uptrend and so on. Think about how long a time period, is relevant to you.
Look at the general trend in the rest of the sector - - all banks, or all travel companies, etc. (You can look at the relevant ETF if your platform has it.)

1) Learn and understand about LEVELS. Support and resistance. Prices strongly tend to go between levels. You can put a Limit or Stop (which means go) order at a particular level , also a Take Profit, and wait. It will be quicker than your finger. Don’t be greedy and put them too far out.

Learn about the fractal nature of the market. You see the same patterns on all time frames.

Always put a stop loss in. They often have to be more distant than you'll feel comfortable with. Watch out for "wicks" stopping you out for a loss if you put them too close - it's difficult. If you're watching you may feel you're better off without one, but DO put one in, just more distant, just in case of a kwadoonk. Always always cover your back.

Learn about Risk to Reward ratio. You will lose some trades. If you lose 3 in a row, stop. Check the levels, the news, have a cup of tea, etc. Don't EVER get annoyed. The market can be unreasonable far longer than your bank balance will last.
Never expose yourself to more than (say) 1% of your pot in a single trade. Even at that you can find yourself half blown in a few days.

Find out what levels are by "looking left" at previous days and longer time frames.
You put lines/bands at them all. TradingView will draw a thing up the right side, I believe to show you where most trades have been. Those will be the levels.
Also note the Hi and Lo of previous days, and opening/closing prices of same. Spooky how often you end up where you were, after a day..
Often levels from months ago will still be respected.
Whole numbers (like oil price per barrel) will be significant sometimes.
Do nothing unless you have a reason to think the price will go somewhere specific. Do not guess.

Do not ever chase anything which looks out of the ordinary. As a Newbie you'll lose. Wait for it to finish whatever it's doing, and use the return to normal, like a bounce, say of 5% of a gap. There are several "post gap" strategies - look them up.

2) Learn about Volume and liquidity
If a stock is illiquid you're stuffed. The SPREAD will be lousy and it may more or less stop moving. So stick to large cap, much-traded stocks.
LEARN HOW MUCH THE SPREAD WILL LOSE YOU. It can be alarming, and they (spreads) can jump about. Stick to large-cap stocks to begin with for their tighter spreads.

3) Learn about Price Action.
This is important. There a dozen or so "Flags" and pennants, double tops, double bottoms, cup and handle, and so on. Look them all up . Investopedia. They often occur, slightly distorted. If a price has "Broken" high or low, you can often look back and say oh yeah, that was a break out after consolidation, or whatever.

Very very often a price will "bounce" off a level and return to it, so set up to catch a little of the bounce, and close. When it starts to return, You can scalp a bit more the other way (long/short). If you're too slow to enter, of course you'll be back where you started.
One of the easiest trading periods is later in the day, when Apple and its mates will be "Ranging" up and down every 20 minutes or so, a few times the spread in each direction. If you miss an exit you can wait for the next and be less ambitious on your TP level.
Always watch the indices, like the EG or Nasdaq100 or SPY or US30 or IWM(Russell 2000) whatever you have. See how well your stock ignores other stocks' flickers, or flies around. Often you can see a turn coming.

Be very careful about "chasing a run". They stop very annoyingly the instant you open. especially if there have been a couple of retracements already.
If you do jump in, start small. When you're in profit, add another 50% and keep the Stop moving up such that you won't be out of pocket on the deal, balancing with "giving it a chance". Trailing stop losses can be useful, but are not efficient in that you have to allow for all those darned wicks.

Learn something about moving averages, particularly the long term ones like 50 and 100 and 200 period on a daily candle chart,
and Volume Weighted Average Price VWAP on the 1 minute. It can be "anchored" - learn about that.
VWAP will often indicate another level, which institutions use along with the long slow ones, so you're with them.
Find out about the Simplest use of MAs, eg that you might buy when the price turns up through say an 8 period and a 20 period MA.

That will do for indicators, I reckon. Others use more, like one of the Oscillators which I don't really understand. To me they show you only the obvious.
Learn about the Relative Strength Indicator which can show Divergence.


Check how Asia did the night before, on Bloomberg
Read the darned News - CNN, Bloomberg , Sharecast.com, Reuters, Allied News, all sorts depending on the region/time. This is your real edge, because mostly it's not in the bots which run the show, but they DO read and apply recommendations from banks etc, immediately.
DO use a news feed which tells you about insider deals - ie directors buying share. Selling isn't so important.
DON'T anticipate a jump on geed declarations of RESULTS, but be aware when they are. Often they misbehave and you lose.
DO find out about ex-div dates, reporting dates, government announcements like PMI indices. And on and on.
Hint - if you're SWING trading, you'll liely find all the information you need is free, not so for up to the minute stuff you use for Day Trading.
Also for Day rading you need Level 2 data, which is expensive.

Look at a whole load of typical behaviours , such as happen after a stock has "Gapped" up or down. There are so many "standard" reactions they confuse, but they're worth looking at.

While on demo trading, if a trade "goes wrong" do nothing, leave it. More often than not it'll come back. Often within half an hour. Watch more carefully near the Hi or Lo of day. It's easy to think Oh No it's gone the wrong way and close, much more pressingly, if you're watching.
On the other hand, there's no point watching your position lose once the move is established. Close it if it doesn't hit your stop loss or if you haven't got one. You can always buy again later. I always miss it if I'm watching more than about 2-3 stocks. Some people stick to just one index.

Time and again I've worried over whether to keep going long then short , or long then close, or just hold on, if a stock is going up 5 units and retracing 2, all day. I've done both and wished I'd done the other. You will always miss the best entry/exit points, and you will always lose the spreads if you don't just hold.

The Pros often "take out" much of the winnings of a trade very early, in case something else happens, leaving say 25%. In other words, DO cut and run, don't be greedy.

You will not go out of business if you take too small a profit - that's ok.

That's about it off the top of my head but learn the weaknesses of your platform. eg eToro has terrible spreads and is slow. But if you're swing trading, you CAN set a free trailing stop loss, which may save a horrible surprise. AND you can use FREE copy trading. You shouldn't consider using eToro for day trading at all.
Trading 212 sets a default amount of shares per trade which is most of your post, which is probably designed to make you lose money (they win more when that happens, I'm told). Once, I saw a smaller cap stock was "going into orbit" and hit the BUY button. The spread jumped to something wide, and the price jerked backwards. Being a small cap, the jerk was something like 5%. Just the spread, had me a minus £650. Thank you Trading 212. I waited a little, and it went back to £500 but then went to £525 so I closed. They know about it and frankly it stinks because even if you traded 10 shares one moment, it'll jump back to the default for the next which could be 10,000. Actually Trading212's platform is full of bugs and traps which cost you money, all designed-in. I'm used to it but am looking still for something else.

Maybe IKBR. I'm not making enough to pay much, though.

There ARE some good youtubes. Some at Humbled Trader I like, and The Moving Average, and some at TraderTV (watch them live) . The latter's theory-following ones are a bit impractical, very often, and the guy who presents, doesn't follow them!

Sorry it's long, a bit of a brain-dump. I didn't have time to make it shorter.

 

[timsk]

Good post cara2!
A couple of minor observations . . .

". . . Always put a stop loss in. They often have to be more distant than you'll feel comfortable with. Watch out for "wicks" stopping you out for a loss if you put them too close - it's difficult. If you're watching you may feel you're better off without one, but DO put one in, just more distant, just in case of a kwadoonk. Always always cover your back. . ."
Essentially this is very sound advice, but I'd add the caveat that a trade can always be closed before the stop loss is hit. Place it where - if triggered - you'll lose a max' of 1% of your account. However, if it's clear as day the trade isn't working and you can close for a (much) smaller loss - do it. In other words, treat your 1% stop loss as a 'catastrophe stop', there to protect you against sudden loss of internet connection or a black swan event etc.

". . . While on demo trading, if a trade "goes wrong" do nothing, leave it. . ."
This is tempting and I confess I've done it myself - many times. And you're quite right, 99/100 times price will come back at least to break even - or better - and the once losing trade will become profitable. The issue is that this is actually a very bad habit to get into because when trading a live account, sods law dictates that price doesn't come back in your favour and the losing trade just goes from bad to worse, resulting in a margin call from your broker. I know, because I blew up my first account doing exactly this!

The only other comment I'd make is that your post covers a huge amount of ground and some things you say aren't necessarily applicable to all types of trading (day, swing and position) and all markets (stocks, commodities forex etc.) What the OP (NejemEdinne) needs is a tried and tested trading plan. One s/he has one of those, that will resolve most of the confidence issues.
Tim.

 

[cara2]

Thanks Timsk.
Point taken about needing a simp[le strategy.
Simple strategies:
That youtuber "the moving average" has a simple strategy which works pretty well.
He shows using 3 different MAs (like you get if you click "alligator"), then on a rising trend, buy when the price comes up from below the shorter-time frame MAs (at least two, preferably all three), and sell when the price heads back. (He makes a better job of explaining that).
It doesn't work if there's not enough trend or things are choppy, and Forex in particular doesn't seem to have learned the rules.

When I hadn't read anything much, I bought QQQ5 (leveraged 5 x Nasdaq index) and left it for a day. If it was UP next day, I kept it. If it was flattish I switched to QQQ, or sold if it dipped and waited until it turned sunny side up again. It works splendidly in a bull market! Actually if you get the chart candle period about right,you can buy when there have been two greens, and sell when you've had two reds, and it works, if the spread's not too wide, even on a downtrend.
Backtesting those I ffind it quite annoying because they work better than I do. I can't stick to them.


There's certainly a lot out there to read, and know something about.
You're right, I come having played most with day trading.
For that, the price activity spends so much of its time reacting to the start of day, I feel it tends to overwhelm things like moving averages, but getting a brokerage account and "having a go", Nejem Eddine is likely to be doing just that - day trading. The trend is likely to be absent or change 5 times a day, ignoring some levels completely.

Point taken about developing bad habits. I find I'm far too twitchy and "overtrade". I look back at the losing trades at the end of day, and realise a number wouldn't have been losing if only I'd left them. Often only for say 10 minutes. That's why I suggested always go with the trend, then if the price turns the wrong way it's more likely to come back.
Case in point today and yesterday, with Affirm (AF). It went up over 20 percent, but my jumping in and out meant I only about got a couple of %. I'm very bad at it, and I've not seen a general advice which I can implement.
I have to smile at the 1% rule.
I'm now using about $200 of shares on a trade. Typically they're in the direction of a trend but reverse about when or before the spread clears because I time it all wrong. In 70 trades/scalps today I had 42 red 28 green, losing $10. That's less bad than it was, but at 1% per trade I'd have lost 10% of whatever my pot is. I nearly always lose. So it would last a couple of weeks at 10% per day. I need a shrink!.

 

[NejemEddine]

You sound like me, to a point.
Gawd, so much of the advice on the net is garbage, you just follow one little hidden expensive to know trick and then it's all profit.
Of course it's like learning the guitar - you read one profound paragraph, understand and apply it, and you're an expert. Not.

I'm another newbie: I try to remember things to do and not do, and I was thinking I should write it down.
So I wrote it down - not all in the right order (that went out of the window) and with a few unrefined or missing things.
This is for me, Day Trading, but it applies to swing trading too. There is more, for ST.

Those who actually know what they're talking about unlike me are invited to criticise.

First - look for the TREND. you want higher highs and higher lows for an uptrend, and vide versa.
DON'T "bet" against the trend at first, because it's harder and if you miss it you can't wait for the next wiggle to turn it back in your favour.
Look at higher time frames to spot the trends - there will be a downtrend within an uptrend and so on. Think about how long a time period, is relevant to you.
Look at the general trend in the rest of the sector - - all banks, or all travel companies, etc. (You can look at the relevant ETF if your platform has it.)

1) Learn and understand about LEVELS. Support and resistance. Prices strongly tend to go between levels. You can put a Limit or Stop (which means go) order at a particular level , also a Take Profit, and wait. It will be quicker than your finger. Don’t be greedy and put them too far out.

Learn about the fractal nature of the market. You see the same patterns on all time frames.

Always put a stop loss in. They often have to be more distant than you'll feel comfortable with. Watch out for "wicks" stopping you out for a loss if you put them too close - it's difficult. If you're watching you may feel you're better off without one, but DO put one in, just more distant, just in case of a kwadoonk. Always always cover your back.

Learn about Risk to Reward ratio. You will lose some trades. If you lose 3 in a row, stop. Check the levels, the news, have a cup of tea, etc. Don't EVER get annoyed. The market can be unreasonable far longer than your bank balance will last.
Never expose yourself to more than (say) 1% of your pot in a single trade. Even at that you can find yourself half blown in a few days.

Find out what levels are by "looking left" at previous days and longer time frames.
You put lines/bands at them all. TradingView will draw a thing up the right side, I believe to show you where most trades have been. Those will be the levels.
Also note the Hi and Lo of previous days, and opening/closing prices of same. Spooky how often you end up where you were, after a day..
Often levels from months ago will still be respected.
Whole numbers (like oil price per barrel) will be significant sometimes.
Do nothing unless you have a reason to think the price will go somewhere specific. Do not guess.

Do not ever chase anything which looks out of the ordinary. As a Newbie you'll lose. Wait for it to finish whatever it's doing, and use the return to normal, like a bounce, say of 5% of a gap. There are several "post gap" strategies - look them up.

2) Learn about Volume and liquidity
If a stock is illiquid you're stuffed. The SPREAD will be lousy and it may more or less stop moving. So stick to large cap, much-traded stocks.
LEARN HOW MUCH THE SPREAD WILL LOSE YOU. It can be alarming, and they (spreads) can jump about. Stick to large-cap stocks to begin with for their tighter spreads.

3) Learn about Price Action.
This is important. There a dozen or so "Flags" and pennants, double tops, double bottoms, cup and handle, and so on. Look them all up . Investopedia. They often occur, slightly distorted. If a price has "Broken" high or low, you can often look back and say oh yeah, that was a break out after consolidation, or whatever.

Very very often a price will "bounce" off a level and return to it, so set up to catch a little of the bounce, and close. When it starts to return, You can scalp a bit more the other way (long/short). If you're too slow to enter, of course you'll be back where you started.
One of the easiest trading periods is later in the day, when Apple and its mates will be "Ranging" up and down every 20 minutes or so, a few times the spread in each direction. If you miss an exit you can wait for the next and be less ambitious on your TP level.
Always watch the indices, like the EG or Nasdaq100 or SPY or US30 or IWM(Russell 2000) whatever you have. See how well your stock ignores other stocks' flickers, or flies around. Often you can see a turn coming.

Be very careful about "chasing a run". They stop very annoyingly the instant you open. especially if there have been a couple of retracements already.
If you do jump in, start small. When you're in profit, add another 50% and keep the Stop moving up such that you won't be out of pocket on the deal, balancing with "giving it a chance". Trailing stop losses can be useful, but are not efficient in that you have to allow for all those darned wicks.

Learn something about moving averages, particularly the long term ones like 50 and 100 and 200 period on a daily candle chart,
and Volume Weighted Average Price VWAP on the 1 minute. It can be "anchored" - learn about that.
VWAP will often indicate another level, which institutions use along with the long slow ones, so you're with them.
Find out about the Simplest use of MAs, eg that you might buy when the price turns up through say an 8 period and a 20 period MA.

That will do for indicators, I reckon. Others use more, like one of the Oscillators which I don't really understand. To me they show you only the obvious.
Learn about the Relative Strength Indicator which can show Divergence.


Check how Asia did the night before, on Bloomberg
Read the darned News - CNN, Bloomberg , Sharecast.com, Reuters, Allied News, all sorts depending on the region/time. This is your real edge, because mostly it's not in the bots which run the show, but they DO read and apply recommendations from banks etc, immediately.
DO use a news feed which tells you about insider deals - ie directors buying share. Selling isn't so important.
DON'T anticipate a jump on geed declarations of RESULTS, but be aware when they are. Often they misbehave and you lose.
DO find out about ex-div dates, reporting dates, government announcements like PMI indices. And on and on.
Hint - if you're SWING trading, you'll liely find all the information you need is free, not so for up to the minute stuff you use for Day Trading.
Also for Day rading you need Level 2 data, which is expensive.

Look at a whole load of typical behaviours , such as happen after a stock has "Gapped" up or down. There are so many "standard" reactions they confuse, but they're worth looking at.

While on demo trading, if a trade "goes wrong" do nothing, leave it. More often than not it'll come back. Often within half an hour. Watch more carefully near the Hi or Lo of day. It's easy to think Oh No it's gone the wrong way and close, much more pressingly, if you're watching.
On the other hand, there's no point watching your position lose once the move is established. Close it if it doesn't hit your stop loss or if you haven't got one. You can always buy again later. I always miss it if I'm watching more than about 2-3 stocks. Some people stick to just one index.

Time and again I've worried over whether to keep going long then short , or long then close, or just hold on, if a stock is going up 5 units and retracing 2, all day. I've done both and wished I'd done the other. You will always miss the best entry/exit points, and you will always lose the spreads if you don't just hold.

The Pros often "take out" much of the winnings of a trade very early, in case something else happens, leaving say 25%. In other words, DO cut and run, don't be greedy.

You will not go out of business if you take too small a profit - that's ok.

That's about it off the top of my head but learn the weaknesses of your platform. eg eToro has terrible spreads and is slow. But if you're swing trading, you CAN set a free trailing stop loss, which may save a horrible surprise. AND you can use FREE copy trading. You shouldn't consider using eToro for day trading at all.
Trading 212 sets a default amount of shares per trade which is most of your post, which is probably designed to make you lose money (they win more when that happens, I'm told). Once, I saw a smaller cap stock was "going into orbit" and hit the BUY button. The spread jumped to something wide, and the price jerked backwards. Being a small cap, the jerk was something like 5%. Just the spread, had me a minus £650. Thank you Trading 212. I waited a little, and it went back to £500 but then went to £525 so I closed. They know about it and frankly it stinks because even if you traded 10 shares one moment, it'll jump back to the default for the next which could be 10,000. Actually Trading212's platform is full of bugs and traps which cost you money, all designed-in. I'm used to it but am looking still for something else.

Maybe IKBR. I'm not making enough to pay much, though.

There ARE some good youtubes. Some at Humbled Trader I like, and The Moving Average, and some at TraderTV (watch them live) . The latter's theory-following ones are a bit impractical, very often, and the guy who presents, doesn't follow them!

Sorry it's long, a bit of a brain-dump. I didn't have time to make it shorter.

thank you brother when I started putting stop losses I start getting more confidence because I know what will happen if the trade doesnt go my way
and I am always trying to learn price action.It is true that I am not looknig for patterns I just look how people reacting to the movement and try to ride the wave I am still newbie and I will always be learning thanks for the advice brother. I apreciate it

 

[cara2]

In that case, Do DO DO watch TraderTV LIve. It's a streaming Youtube where you can watch professional traders. They try to explain what they're doing, but they are not teachers. They are keen to show how clever they were, post the fact. They use shorthand and jargon which will take you some effort to "translate"!.
If you hear:
"Gee we got a great fill right there at 40's so we're in the moneeeee and this is coming in right now and we're 1 for 1"
You may well think, "what the *** are they on about.???"
I still do, sometimes.
You will work out after a while, that they mean that for example, they anticipated that the price would bounce off a "level" of support, like a ball bouncing on the ground. . (Those levels are the ones as above, which tend to persist). (40's means some whole number of dollars plus 40 cents.)

If it was $META and the price was drifting downwards towards a "level" of $300, it might be expected to bounce back up again, so they put in a LIMIT or STOP, ORDER to buy a number of shares at say $300.10. (In this case it doesn't matter in principle whether it's a Limit OR a Stop order, for now just consider either to be a "buy at" order.) When the 300.10 price is hit the order "fills" and they have the shares. Sometimes the price will bounce up at $300.15 so they miss. They don't "get the fill".
Much rejoicing therefore, when the order is filled at the desired price ("at ten..."), (and groaning if it goes a bit lower because they could have bought cheaper) , even though they haven't made cent because it's still inside the spread which may be 4 cents.

You put your stop-loss close under $300 - watch out for "wicks". Practically pointless to have a stop loss, there, 299 if you like.
The idea is that the price either bounces up, which is a "pop", or it goes on up to the next level, which might be $303.

The guys on that stream/website have videos including one which says to "manage your loss", and working out "Risk to Reward".
You can't, they way they tell it, because you have no idea whether it's a "pop" or will run up to the next level,, and if you put the stop-loss too close it will stop you out and you will lose money.

You can put a stop loss at 299 if you like, as the price will never go sailing through a strong level without a pause. It MIGHT go to that 300 Level and then stay there - very boring especially when it doesn't wiggle enough to clear the spread. If it does that dance and your stop is too close, a wick will hit it and you just lose money. Happens to me a lot - death by a thousand cuts.

You watch.
If it's a pop, you don't know how far it'll go so you watch the candles and wicks carefully. If the candles start to get shorter or hint at a change of direction, you Close (sell) and you may have "scalped" a fraction of a share. Whoopee. If you only bought one share, you may have , after clearing the spread, won 20 cents. Spreads of course widen nastily.

If the price heads north towards that next level, you can move your stop-loss up, to a wick-free price like $300, and put a Take Profit stop at say $302.80.

If you're daft like me and the price starts to hesitate at 301, you panic and hit "close", thinking it's a "pop". The price then carries on up and you "buy" again. Doing that loses you the spread, each time, plus whatever you missed of the rise by interfering. If you're too late to rebuy and the spread is too wide, you lose.

Hope that's clear - if not , please say and I'll find a bit of chart. As always, others are invited to criticise.

The "dont risk more than 1%" rule is ok if it's applied as intended - but that varies so it's often not useful. If you have $50000 in your pot and you buy $20 of shares, You wouldn't want to lose more than a couple of bucks, but 20 cents is too narrow. You certainly wouldn't want to lose $50 or 500. Yes that IS possible, in theory!

 

[IlIlIlIlI]

Hi guys, I am a newbie trader that have started demo trading,the problem is that I dont have any strategy to work on because after I watched a guide on youtube he told me that the best way to learn trading is actually through trading.So I jumped on tradingview to start my papertrading journey the problem here is that I believe I lack confidence I sometimes make the right calls but whenever the trade go against me I jump out ,I thought that the main problem of my lacking of confidence in my trades is that I dont have a clear setup I just watch price action and jump into trade that I believe it is where the market is going.I told you about my situation I hope that you can give me insight and thanks to everybody

As I read it your first need is to build confidence in your trading.

So get rid of the idea that you NEED a strategy or a clear setup or courses - markets will always fool you sooner or later when you are only copying foreign ideas.
There is no holy grail - trading profit is a statistical result.
What you need is experience and understanding your trading behaviour - so learn to watch yourself without being too emotional.

More Important:
Define the frame you want to trade with. That includes trading time, timeframes used, assets or markets used, platforms etc..
Stick to that frame.
Never forget:
Every day is new and different to the ones you know.
News are used by the markets, not opposite.
Every trade has a 50% chance to end up as a winner or looser.
Money is only made if you close a trade.
Spend time to watch markets and try to find out what happens.
Spend time to find trading ideas which can work.

What you can do:
Find a way to get your trading ideas (@cara2 wrote a lot good stuff about that screening and basics) and decide yourself to use the idea or reject it.
Consider conditions when you avoid to trade an opportunity.
Learn to live with losses and learn to cut them early enough when necessary.
Write a trading diary about the trades you made and the trades you mentioned but you did not make for defined reasons and check it from time to time.
Don't react immediately on a single trade result, but also learn to get rid of ideas which are not profitable - at least during a certain period.
Don't get greedy.
Think about a trailing stop when you position is profitable enough.
Be fine with everything (by learning from your trading diary) what happened in the past - before you start trading on the next day.
If you are profitable with your trading and you can describe what you are doing, you can call it a - or better: your - strategy.

Most important:
Use some (more than one) demo accounts before using real money.
First learn to handle the software.
My recommendations for demos:
IBKR is good for stocks and options and they have a true account statement for your success including all fees (but ignore the foolish wealth mangement account they add).
On the first day after registration at IBKR you should reduce their millionaire's account balance to your potential deposit and don't trade until next day, otherwise you would never get proper results (account parameter maintenance is done only overnight).
For Forex and CFDs you can use Darwinex as they seem to have fair prices (from SAXO bank and LMAX).

If you have great results after 4 weeks, stay cautious and expect a trap - market behaviour is changing significantly every 10 to 14 weeks to fool algo traders. You should survive that period at least once before using real money.
Check your screening and your decisions from time to time and improve it if you think it makes sense.

 

[NejemEddine]

thank you brother for your time I really apreciate it

 

[cara2]

@IlIlIlIlI that's helping me as well, thank you.

One query - are you in the UK?
I've opened an IBKR account (and TradingView with their big offer) and am unclear about a few things.
I was annoyed to find IBKR impose US rules about Pattern Trading. Minimum $25k which is more than I wanted to use to try it out.
Also you can't use trailing stops. What??? I want a trailing stop with an Average used as a stop.
I called them but got someone in an Indian call centre who was less than helpful.
Even the English on their website is written by someone incompetent to write English.

(Digressing:
"On animals: in our house we have 2 rabbits, one with red fur, and one with a long tail."
How many animals is that? 2, 3, 4? No idea. OK so I now know IBKR aren't very good. Sigh. Better so far though than Trading212 I'm using now which is deplorable.)

Couple of things about learning: I tried a demo account for a while, and I find its unrealness is overwhelming. I make loadsa money.
When it comes to real money I can't hack it, which is getting to me.. I've reduced the size to tiny, so I get the emotions over a few pence. A mixed blessing but I haven't blown the account yet.

I keep hearing the only way to learn is screen time, but I don't agree. You don't learn how to be a cricket bowler by chucking a tennis ball against a wall. You need mentoring in some way imho, whether by self-education (the worst way) or someone else. In other words, advice why and when to do and not do things.

 

[IlIlIlIlI]

I'm in old Germany and I'm nearly excludedfrom certain strategies by the insame German law restrictions for traders.
So you might always find language errors in my posts

I use IBKR only for a certain US options strategy so I don't know all about the platform.
It is enough to know what I need - "Define the frame you want to trade with." and try to define your needs. If you want or need help for that, you should be able to describe your frame.
Of course I used the demo before for similar trades, and I'm still running 2 demo accounts which are maintained to test ideas.
They have a lot of videos but it is hard to find the stuff you are searching for, some extermal videos are much better about it.

You can use trailing stops at IBKR if you open the "LMT" scroll menu and click trhe arrow down.
There is a video for trailing stops at IBKR on youtube showing and explaining it (maybe there are better ones, but IMO this is also sufficient).

From my experience the only need is to stay in touch with the market. That means watching the price action and charts (if you have a pattern where you want to work with that can take only 5 to 15 minutes per week depending on your trading time frame).

 

[IlIlIlIlI]

I was annoyed to find IBKR impose US rules about Pattern Trading. Minimum $25k which is more than I wanted to use to try it out.

That is a FINRA rule in the US every trading company in the US has to regard.

I just come from a webinar where freestoxx.com was present and in their discussion they said they are not forced to regard the PTD rule.
Unfortunately I don't know whether they offer their service also to UK clients.
They have a demo and different pricing models (you should read and agree with their price card before opening a live account there).
Maybe it is closer to what you are looking for than IBKR.

 

[1nvest]

I keep hearing the only way to learn is screen time, but I don't agree. You don't learn how to be a cricket bowler by chucking a tennis ball against a wall. You need mentoring in some way imho, whether by self-education (the worst way) or someone else. In other words, advice why and when to do and not do things

Hopefully this link below, to what is now a very old thread, provides some help to yourself and @NejemEddine

Very simple trend-following set-up

Happy to see T2W has offered a refuge for longer term traders – and happy to post up the current guidelines I’m using to set up trend-following trades. I say current guidelines as they may never be perfect and complete – they are profitable but there’s always room to learn and improve...

www.trade2win.com

@cara2 I agree completely with your comment about not learning by just looking at a chart. The method, although old, still stands the test of time, I've taken the liberty of simplifying it. This is how it looks coded

b1 = eMA(C,50)>eMA(C,100);
b2 = eMA(C,100)>eMA(C,200);
b3 = Close>eMA(C,50);
b4 = ROC(C,50)>0;

buy = b1 AND b2 AND b3 AND b4;

The exit signal is simply everything in reverse

I have added a momentum indicator such that the close is greater than it was 50 days ago which suggests its going in the right direction, and not just a random event where the moving averages all line up, and simplified the detail in the thread somewhat

These simple criteria tested over the last 60 years against the S&P had you invested 100k, would have turned into £4.1m
using a daily time frame, it produces a win rate of over 80%. Ie the number of trades that were successful. Incredible achievement on a daily time frame

read the thread, there are some other methods which are equally as successful in terms of a strategy
for example this link also which is how i got started with a successful method.

Stan Weinstein's Stage Analysis

I started this thread for a place for people to discuss Stan Weinstein's method of stage analysis, as I read his book "Secrets for Profiting in Bull and Bear Markets" from 1988 in late 2010 and was very impressed with his four stage breakout method. For those that haven't read the book and are...

www.trade2win.com

we all move on in our journeys, these days i trade nothing but momentum on much longer timeframes. but some things are classics and as i said, stand the test of time

good luck, and happy to help if i can

 

[cara2]

I appreciate the new answers @1invest and @IlIlIlIlI (How do I type your username??!!)
but I fear we are digressing from the Original Poster's inquiry. I don't know how strict this forum is. (I'm a moderator on a photo forum where we're strict...)

That is a FINRA rule in the US every trading company in the US has to regard.

Yes, but they countries other than the UK (and USA of course) to NOT to stick to it. Ireland and Germany are two. Odd. Damned Brexit!

Thanks for the Indicator tips.
I have much to follow up and learn.

b4 = ROC(C,50)>0;

ROC ?? Return on capital??

I will check freestixx. Their spreads are certainly tight. Where do they make their money?!. Currency exchange, andother fees I'll have to look at.

The basic Trailing Stop is fine, what I want is one which is not triggered by WICKS.
(I know some platforms allow a level to be set which is an average of the previous n trades, which sounds like a fine idea. I know Ameritrade have it, not available in the UK.) Perhaps it's the advanced box. It all takes me ages to find - my excuse is that I'm somewhat autistic so nothing looks logical to me at first.

Those Indicator- based trading tools are appealing - more to learn.. It all takes time, when I am fully occupied losing money all day!!

last 60 years against the S&P had you invested 100k, would have turned into £4.1m

Interesting. Let me see... That's 41x
S&P has gone 750 to 4400 which is only 5.9x.
41x over 60 years is 6.38%. Hmm doesn't sound great but the S&P was only 3% pa.
(Anyone who needs help working that out please ask)

I have "paper hands" - in other words I am too quick to sell if a price falters. I have read about many of the Indicators, but on rereading I will try Bollinger Bands again. The outer lines are two standard deviations from the 20 period moving average (both adjustable to a point) so it should give me confidence to have a reference for the current amount of volatility.

[One use I have for trailing stops is with oil and some forex, and sometimes an Index (Asian or US30 which run 24hr). Where there's a reasonable looking trend and a small spread. Open a small order and follow it until the spread is cleared. You need one with a narrow spread, but even so it make take a long time. Then set up a trailing stop, (and sometimes a Take Profit as well) and go to bed.
If the spread didn't clear, as least you know.
A couple of times a week, they will go far enough overnight to make it worthwile, though often they stop out with a tiny gain. The mother of a Uni student told me her son had lost too much dabbling on Forex, so I suggested that approach. Apparently he's doubled his money since September, and has become popular with his friends who are copying him.]

 

[IlIlIlIlI]

@IlIlIlIlI (How do I type your username??!!)

ilililili I see you got it.

I will check freestixx. Their spreads are certainly tight. Where do they make their money?!. Currency exchange, andother fees I'll have to look at.

Read their rate card at the bottom of the website.
They also make money on withdrawals and subscriptions (account types and wealth management strategies) and I assume they get a commision from their partners. If I got it right, they belong to the only originally German Forex broker whselfinvest.com and I assume they meanwhile left to Luxembourg.

If you know that HSBC was the first bank who lend European stocks for short selling (which is meanwhile done by a lot of mutual funds, too) while some retail banks told their clients that that is not possible, you can imagine that there is a legal way for their business model (theyx didn't want to talk about details as they see it as a business secret).

Yes, but they countries other than the UK (and USA of course) to NOT to stick to it. Ireland and Germany are two. Odd. Damned Brexit!

Only traders who are trading directly on the US exchanges are a victim of this rule.
But there are enough US stocks stored in the bearings outside the US for trading US stocks on European or Asian markets ...

@cara2 @NejemEddine
There is a very simple strategy to trade but I did not test if it really works long term.
What you need is a certain tolerance for losses and drawdown.
Try it out on a demo account first to see whether you can make it working for you.

1) Use the 1 or 4 hours time frame (H1 or H4 chart).
2) Open a position if the close price crosses the eMA(75) and eMA(75) is raising. If the second condition is filled it is called the signal.
2a) Open long if the eMA(75) is crossed from below
2b) Open short if the eMA(75) is crossed from above
3) Set an initial stop below the last extreme value
4) set your first trailing stop if the eMA(20) gives your position profit
5) set your running trailing stop on the eMA(75)
6) close open positions if the signal changes direction

Example for XAUSUSD in the H1 chart:

You would earliest open a position after the crossing bar is closed and the close price is above the eMA(75).
You could play with vthe eMA length (100 instead of 75 of 25 instead of 20 etc.) in the past of the chart.
You will have a losing trade on December 1st before opening the next profitable one.

 

[MattK]

ilililili I see you got it.

Read their rate card at the bottom of the website.
They also make money on withdrawals and subscriptions (account types and wealth management strategies) and I assume they get a commision from their partners. If I got it right, they belong to the only originally German Forex broker whselfinvest.com and I assume they meanwhile left to Luxembourg.

If you know that HSBC was the first bank who lend European stocks for short selling (which is meanwhile done by a lot of mutual funds, too) while some retail banks told their clients that that is not possible, you can imagine that there is a legal way for their business model (theyx didn't want to talk about details as they see it as a business secret).

Only traders who are trading directly on the US exchanges are a victim of this rule.
But there are enough US stocks stored in the bearings outside the US for trading US stocks on European or Asian markets ...

@cara2 @NejemEddine
There is a very simple strategy to trade but I did not test if it really works long term.
What you need is a certain tolerance for losses and drawdown.
Try it out on a demo account first to see whether you can make it working for you.

1) Use the 1 or 4 hours time frame (H1 or H4 chart).
2) Open a position if the close price crosses the eMA(75) and eMA(75) is raising. If the second condition is filled it is called the signal.
2a) Open long if the eMA(75) is crossed from below
2b) Open short if the eMA(75) is crossed from above
3) Set an initial stop below the last extreme value
4) set your first trailing stop if the eMA(20) gives your position profit
5) set your running trailing stop on the eMA(75)
6) close open positions if the signal changes direction

Example for XAUSUSD in the H1 chart:
View attachment 332024

You would earliest open a position after the crossing bar is closed and the close price is above the eMA(75).
You could play with vthe eMA length (100 instead of 75 of 25 instead of 20 etc.) in the past of the chart.
You will have a losing trade on December 1st before opening the next profitable one.

What advice can you give for dealing with losses? This is a particularly challenging aspect for me

 

[timsk]

What advice can you give for dealing with losses? This is a particularly challenging aspect for me

Keep 'em to a minimum and keep 'em small!

 

[IlIlIlIlI]

What advice can you give for dealing with losses? This is a particularly challenging aspect for me

I thought a longer time what to answer as I'm not 100% sure what you mean (general or personal dealing with losses) and what could help you.
So I decided to give you a veery personal answer mentioning I might not be the best guy for the response as currently I'm not trading manually in a higher frequence and I'm only trading US options with a small trading system I developed. Currently I takes me about 30 minutes per week for maintenance and additional 5 to 10 minutes daily if I want to place an additional daily trade. The current profitability is very satisfying, but I don't give a cent for it before it survived at least one year ending with acceptable profit. Important: It fits to my personal framework as I'm still working fulltime.

After decades of trading I'm still emotional with my higher trading results and it does not help me when I read to keep out the emotions from trading. A good significant profit trade makes me feel good and a significant loser makes me feel bad. That's a fact - I don't cheat myself. I want and have to live with these emotions as emotions make you a human being., but they must not take influence on my trading. That's the significant difference.

Threre are three additional factors which help me to live with losses: diversification, analysis and reasonability.

diversification:
- I have a long term trading portfolio where every position has a profit target and none has a stop loss. There are about 5 to 15 trades per year and an average cash quota of about 30%. The profit target will only be moved up when it is calibrated, never down.
- I have my options trading account where I use only my strategy. The deposit is only used for margins and for paying the stocks I receive from an option.
- For long term growth I have a few stock saving plans with the highest monthly rate of 35 EUR for buying fractions of one stock. These plans shall not be touched in the next five years.
- To trade CFDs and Forex I'm just writing a new robot and all positions will have an initial stop and a trailing stop in profit, but no profit target. The trading frequence will be 50 to 150 trades per month I assume while it will be trading 36 assets.

analysis:
- I make a difference between a drawdown and a loss. Money is only made or lost if you close an open position.
- A mistake can only be made on the setup, so you should know why you (or a robot) opened a position. A trading diary helps for not cheating yourself.
- Don't blame yourself but find the reason why the position failed. There could be wrong timing, too short initial stop, not checking all criteria or general failure of your strategy in the current market situations. A trend strategy can't work profitable in ranging markets and opposite.
- Check higher timeframes whether they could be useful for a trading decision.
- Never change your trading because of the result of one single trade, but try to find a pattern for failures.
- if a strategy does not work under the current market conditions like of my Darwin YZDA (which was accidentially closed by Darwinex) I discontinue the strategy. Full stop - without any regrets.

reasonability:
- Use a reliable demo account first for at least one month and trade it seriously in the way you want to trade with your real money.
- Define your framework for trading and check (while using the demo account) whether it is realistic.
- Always use a stop loss for medium or short term trading. If it is triggered, the setup was wrong and should be analyzed, but there is no reason to blame yourself.
- Don't be sad or get crazy if you missed a trading chance for any reason, there will be more every day.
- Be fine with everything you traded in the past before you start a trading session. That includes your emotions and your analysis of the past trades.
- Learn patience. Not to trade is always better than ending up with a losing trade.
- Don't trade if you don't have the time for it or if you feel bad or incomplete.
- Don't put all your money on a single asset or a single strategy and define your limits when to stop it finally before you start. Example: Stop trading after losing 15% of the deposit could be a reaonable value for stopping a stragy, the majority of investors use it at Darwinex.
- Use only a position size with a reasonable value and never increase the risk by getting greedy.
- Take into account that you might need one or more restarts for your trading and keep the money safe you need for restarting.
- If you use diversification and you're profitable on one leg and losing on the other, evaluate the winning side higher and think about changing the percentage in favour of the winners.
- define a plan when and how to take your deposit out from your profits and put that on an investment (or long term trading) account. On my most successful trading account I planned to get the deposit out after latest 3 years, but I could take it out after 1 1/2 years and continued trading for another 5 years only with the profit left in. Example: take 25 % out after making 50% profit on the deposit, the next 25% after making 100% on the initial deposit etc.
- Take everything what happens - also with yourself and your emotions - as an experience to learn and look for improvements on the details.

 

[MattK]

Keep 'em to a minimum and keep 'em small!

My boxing coach gave me advice when I mentioned my weak left-hand punch. He said, "Hit harder"

 

[MattK]

I thought a longer time what to answer as I'm not 100% sure what you mean (general or personal dealing with losses) and what could help you.
So I decided to give you a veery personal answer mentioning I might not be the best guy for the response as currently I'm not trading manually in a higher frequence and I'm only trading US options with a small trading system I developed. Currently I takes me about 30 minutes per week for maintenance and additional 5 to 10 minutes daily if I want to place an additional daily trade. The current profitability is very satisfying, but I don't give a cent for it before it survived at least one year ending with acceptable profit. Important: It fits to my personal framework as I'm still working fulltime.

After decades of trading I'm still emotional with my higher trading results and it does not help me when I read to keep out the emotions from trading. A good significant profit trade makes me feel good and a significant loser makes me feel bad. That's a fact - I don't cheat myself. I want and have to live with these emotions as emotions make you a human being., but they must not take influence on my trading. That's the significant difference.

Threre are three additional factors which help me to live with losses: diversification, analysis and reasonability.

diversification:
- I have a long term trading portfolio where every position has a profit target and none has a stop loss. There are about 5 to 15 trades per year and an average cash quota of about 30%. The profit target will only be moved up when it is calibrated, never down.
- I have my options trading account where I use only my strategy. The deposit is only used for margins and for paying the stocks I receive from an option.
- For long term growth I have a few stock saving plans with the highest monthly rate of 35 EUR for buying fractions of one stock. These plans shall not be touched in the next five years.
- To trade CFDs and Forex I'm just writing a new robot and all positions will have an initial stop and a trailing stop in profit, but no profit target. The trading frequence will be 50 to 150 trades per month I assume while it will be trading 36 assets.

analysis:
- I make a difference between a drawdown and a loss. Money is only made or lost if you close an open position.
- A mistake can only be made on the setup, so you should know why you (or a robot) opened a position. A trading diary helps for not cheating yourself.
- Don't blame yourself but find the reason why the position failed. There could be wrong timing, too short initial stop, not checking all criteria or general failure of your strategy in the current market situations. A trend strategy can't work profitable in ranging markets and opposite.
- Check higher timeframes whether they could be useful for a trading decision.
- Never change your trading because of the result of one single trade, but try to find a pattern for failures.
- if a strategy does not work under the current market conditions like of my Darwin YZDA (which was accidentially closed by Darwinex) I discontinue the strategy. Full stop - without any regrets.

reasonability:
- Use a reliable demo account first for at least one month and trade it seriously in the way you want to trade with your real money.
- Define your framework for trading and check (while using the demo account) whether it is realistic.
- Always use a stop loss for medium or short term trading. If it is triggered, the setup was wrong and should be analyzed, but there is no reason to blame yourself.
- Don't be sad or get crazy if you missed a trading chance for any reason, there will be more every day.
- Be fine with everything you traded in the past before you start a trading session. That includes your emotions and your analysis of the past trades.
- Learn patience. Not to trade is always better than ending up with a losing trade.
- Don't trade if you don't have the time for it or if you feel bad or incomplete.
- Don't put all your money on a single asset or a single strategy and define your limits when to stop it finally before you start. Example: Stop trading after losing 15% of the deposit could be a reaonable value for stopping a stragy, the majority of investors use it at Darwinex.
- Use only a position size with a reasonable value and never increase the risk by getting greedy.
- Take into account that you might need one or more restarts for your trading and keep the money safe you need for restarting.
- If you use diversification and you're profitable on one leg and losing on the other, evaluate the winning side higher and think about changing the percentage in favour of the winners.
- define a plan when and how to take your deposit out from your profits and put that on an investment (or long term trading) account. On my most successful trading account I planned to get the deposit out after latest 3 years, but I could take it out after 1 1/2 years and continued trading for another 5 years only with the profit left in. Example: take 25 % out after making 50% profit on the deposit, the next 25% after making 100% on the initial deposit etc.
- Take everything what happens - also with yourself and your emotions - as an experience to learn and look for improvements on the details.

Thank you for such a detailed response! I'm curious to learn about your methods and tools for determining the optimal distribution of risks among your investment strategies, especially in the context of long-term stock savings plans, options trading, and the use of trading robots. It's also important to understand how you adapt these strategies to dynamically changing market conditions, including trend shifts and unexpected market events.

 

[bootsyjam]

Hi guys, I am a newbie trader that have started demo trading,the problem is that I dont have any strategy to work on because after I watched a guide on youtube he told me that the best way to learn trading is actually through trading.So I jumped on tradingview to start my papertrading journey the problem here is that I believe I lack confidence I sometimes make the right calls but whenever the trade go against me I jump out ,I thought that the main problem of my lacking of confidence in my trades is that I dont have a clear setup I just watch price action and jump into trade that I believe it is where the market is going.I told you about my situation I hope that you can give me insight and thanks to everybody

I have this stuck to the top of my screen. I think it was from.someone called Trader Dante (look him up):
"Your only job as a trader is to identify your Edge and to trade it every single time it occurs."

Simplifies things quite a bit!