trader_dante
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This one is for the total newbies 
I thought I'd answer just some of the questions I see asked all over this forum, time and time again and answer them all in one place.
I'm not some kind of guru so you may decide to take what I say with a pinch of salt but I do have considerable experience and I am a consistently profitable professional
Here are my views on some pertinent issues. Hope I don't get in a slanging match with anyone - it's just my 2 cents. Everyone will have different opinions. With that in mind, I'm not going to say "in my opinion" in every answer I provide.
Is trading just gambling?
The way most people approach the markets - YES. But a professional trader has an edge that plays out over time, meaning that whilst the outcome of any one trade may be uncertain, the outcome of many trades have sufficiently great odds, that the trader is highly likely to come out ahead. Think about it like this: we all see the person that frequents a casino as a gambler but is the casino itself gambling? Yes and No. A punter may get lucky and take a huge amount of money off of the house but the odds are stacked in the houses favour (the green box on the black and red roulette wheel and the house limits as two examples) sufficiently enough to assure that over the long run, they continue to stay in business.
Is trading as exciting as the media makes it out to be?
Perhaps trading in general is...the possibility of big wins or big losses, the emotional rollercoaster that occurs naturally as a result of entering positions...the steep rises and declines in the global markets and the potential they bring...the pictures in the media of people holding their heads as markets plummet or the clamour of the traders in the pits...this creates an aura of excitement to the novice. But what I have found is that the big earners treat it much like any other job. The longer term traders spend half their time waiting before entering and then entering and sitting on their hands which in itself is somewhat dull...even the short term traders just click away - making profits, making losses...the odd bit of news or extraordinary market move creates a momentary flicker of excitement to relieve the tedium but on the whole...it's just a job like any other. I've found that the more you make and the better you get, the less exciting it becomes.
What type of trading is most profitable? Scalping? Swing trading? Position trading?
Very hard to answer. But I believe the best traders do a mixture of all. They know when to scalp and when to try and run a position.
Should I spreadbet or should I go direct market?
This has caused more debate than anything else on boards like this. My answer is as follows: if you have a small amount of money to begin with, you should start off spread betting. If you are swing or position trading and intend on making a lot of money, you should, again, be spread betting where the spread or manner of execution (delays, slippage) matters little and the tax saving is sufficient to make it worthwhile.
On the other hand, if you want to scalp, you should go direct market where trading execution is paramount - trading at the best bid and offer is of necessity and the true dynamics of the market can be learnt and studied.
Do the people that make millions have any kind of edge that Joe public can't get?
No way. The people that make millions are, for the most part, trading off of patterns that they have observed from watching the markets time and time again. Patterns that form as a result of what everyone else in the market is doing. And support/resistance is always one of the most often watched and used tools among consistently profitable and high earning traders. I have never seen anyone doing anything that cannot be done from the comfort of home. Again, for scalpers, you will need super quick execution (perhaps even a direct connection to the exchange) but apart from that, we are not talking about inside info or magic indicators known to only the privileged few.
How much capital do I need to begin?
If you simply want to learn the ropes, you can start these days with as little as £10, betting pennies to see if you are right or wrong and how you handle yourself. If you want to earn a living off of trading I would say you probably need around £10,000. However, once you know what you are doing, you can get £10,000 starting from next to nothing. I have made that amount many times over from starting stakes of as little as £50.
How much can I earn trading? And how long until I could realistically make £1m?
The sky is most certainly the limit but it really depends on your stakes. It is realistic to assume that a proficient scalper can average at least 20 ticks, per contract, per day, fairly effortlessly and a good swing trader will average the same amount when you divide their net gain by the time taken to make it. So if you are trading at £1 a tick thats £20 a day income, or £10 a tick, that is £200 per day income.
To answer the second part of that question: I took it from a good source who has seen hundreds, naybe even thousands of grads come through his doors, that the quickest anyone has ever made a cool mill from a standing start of zero (with margin to take a trade) is two years.
Who should I listen to on these boards?
Anyone as long as they DON'T tell you that something CANNOT BE DONE. If someone says those three magic words, run a mile.
Is there any kind of system out there that can make me big money with little work?
Again, often debated. The simple answer is MAYBE. People often say "If a system is so profitable why is someone selling it"? The reason may well be that the trader who created it, cannot seem to follow it. Again, this is why many (but note, not all) traders who failed to make or keep money become seminar speakers or write books. It doesn't mean they don't know how to trade. They may well be the most reliable fount of knowledge out there but for some reason they cannot do it themselves. They cannot put into practice what they know to be true. This is a very hard phenomenon to understand but it is 100% true. KNOWING AND DOING ARE TWO COMPLETELY DIFFERENT THINGS. But since we are all unique, you don't necesarily need to learn off a doer, just a knower
Going back to systems that are sold all over the place though (money back guarantee - 300% profit every 5 days - you know the score), the problem is: if
50% of systems sold are created by charlatans, are useless and don't work and;
50% of systems have an edge but rely on strict following of rules (which most people cannot seem to do)
Where does that leave the system buyer?
What is the quickest way to learn how to trade?
Spend as much time as you can watching the markets and how they move. But rather than starting aimlessly at a chart, use a frame of reference. By that, I mean, look at popular patterns and see how the market plays them out. When the market accelerates towards support is it more likely than not to break or hold? When the market takes out an obviously visible pattern like a head and shoulders does it go without looking back or does it retest? Does the European and US daily trend continue on in the Asian session or is it faded? How far does the market move in a straight line before a pullback? Watch and absorb. Takes notes.
I thought I'd answer just some of the questions I see asked all over this forum, time and time again and answer them all in one place.
I'm not some kind of guru so you may decide to take what I say with a pinch of salt but I do have considerable experience and I am a consistently profitable professional
Here are my views on some pertinent issues. Hope I don't get in a slanging match with anyone - it's just my 2 cents. Everyone will have different opinions. With that in mind, I'm not going to say "in my opinion" in every answer I provide.
Is trading just gambling?
The way most people approach the markets - YES. But a professional trader has an edge that plays out over time, meaning that whilst the outcome of any one trade may be uncertain, the outcome of many trades have sufficiently great odds, that the trader is highly likely to come out ahead. Think about it like this: we all see the person that frequents a casino as a gambler but is the casino itself gambling? Yes and No. A punter may get lucky and take a huge amount of money off of the house but the odds are stacked in the houses favour (the green box on the black and red roulette wheel and the house limits as two examples) sufficiently enough to assure that over the long run, they continue to stay in business.
Is trading as exciting as the media makes it out to be?
Perhaps trading in general is...the possibility of big wins or big losses, the emotional rollercoaster that occurs naturally as a result of entering positions...the steep rises and declines in the global markets and the potential they bring...the pictures in the media of people holding their heads as markets plummet or the clamour of the traders in the pits...this creates an aura of excitement to the novice. But what I have found is that the big earners treat it much like any other job. The longer term traders spend half their time waiting before entering and then entering and sitting on their hands which in itself is somewhat dull...even the short term traders just click away - making profits, making losses...the odd bit of news or extraordinary market move creates a momentary flicker of excitement to relieve the tedium but on the whole...it's just a job like any other. I've found that the more you make and the better you get, the less exciting it becomes.
What type of trading is most profitable? Scalping? Swing trading? Position trading?
Very hard to answer. But I believe the best traders do a mixture of all. They know when to scalp and when to try and run a position.
Should I spreadbet or should I go direct market?
This has caused more debate than anything else on boards like this. My answer is as follows: if you have a small amount of money to begin with, you should start off spread betting. If you are swing or position trading and intend on making a lot of money, you should, again, be spread betting where the spread or manner of execution (delays, slippage) matters little and the tax saving is sufficient to make it worthwhile.
On the other hand, if you want to scalp, you should go direct market where trading execution is paramount - trading at the best bid and offer is of necessity and the true dynamics of the market can be learnt and studied.
Do the people that make millions have any kind of edge that Joe public can't get?
No way. The people that make millions are, for the most part, trading off of patterns that they have observed from watching the markets time and time again. Patterns that form as a result of what everyone else in the market is doing. And support/resistance is always one of the most often watched and used tools among consistently profitable and high earning traders. I have never seen anyone doing anything that cannot be done from the comfort of home. Again, for scalpers, you will need super quick execution (perhaps even a direct connection to the exchange) but apart from that, we are not talking about inside info or magic indicators known to only the privileged few.
How much capital do I need to begin?
If you simply want to learn the ropes, you can start these days with as little as £10, betting pennies to see if you are right or wrong and how you handle yourself. If you want to earn a living off of trading I would say you probably need around £10,000. However, once you know what you are doing, you can get £10,000 starting from next to nothing. I have made that amount many times over from starting stakes of as little as £50.
How much can I earn trading? And how long until I could realistically make £1m?
The sky is most certainly the limit but it really depends on your stakes. It is realistic to assume that a proficient scalper can average at least 20 ticks, per contract, per day, fairly effortlessly and a good swing trader will average the same amount when you divide their net gain by the time taken to make it. So if you are trading at £1 a tick thats £20 a day income, or £10 a tick, that is £200 per day income.
To answer the second part of that question: I took it from a good source who has seen hundreds, naybe even thousands of grads come through his doors, that the quickest anyone has ever made a cool mill from a standing start of zero (with margin to take a trade) is two years.
Who should I listen to on these boards?
Anyone as long as they DON'T tell you that something CANNOT BE DONE. If someone says those three magic words, run a mile.
Is there any kind of system out there that can make me big money with little work?
Again, often debated. The simple answer is MAYBE. People often say "If a system is so profitable why is someone selling it"? The reason may well be that the trader who created it, cannot seem to follow it. Again, this is why many (but note, not all) traders who failed to make or keep money become seminar speakers or write books. It doesn't mean they don't know how to trade. They may well be the most reliable fount of knowledge out there but for some reason they cannot do it themselves. They cannot put into practice what they know to be true. This is a very hard phenomenon to understand but it is 100% true. KNOWING AND DOING ARE TWO COMPLETELY DIFFERENT THINGS. But since we are all unique, you don't necesarily need to learn off a doer, just a knower
Going back to systems that are sold all over the place though (money back guarantee - 300% profit every 5 days - you know the score), the problem is: if
50% of systems sold are created by charlatans, are useless and don't work and;
50% of systems have an edge but rely on strict following of rules (which most people cannot seem to do)
Where does that leave the system buyer?
What is the quickest way to learn how to trade?
Spend as much time as you can watching the markets and how they move. But rather than starting aimlessly at a chart, use a frame of reference. By that, I mean, look at popular patterns and see how the market plays them out. When the market accelerates towards support is it more likely than not to break or hold? When the market takes out an obviously visible pattern like a head and shoulders does it go without looking back or does it retest? Does the European and US daily trend continue on in the Asian session or is it faded? How far does the market move in a straight line before a pullback? Watch and absorb. Takes notes.
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