How to learn to trade

[DashRiprock]

Hi everyone

I decided that i will write a blog about how i think someone new should learn to trade.

there is alot of BS on the internet but there is also alot of good stuff too. i hope everyone things my blog is part of the good stuff instead of all BS. I have seen from here and on other websites on trading that some people pretend to be more clever about trading than they really are. and if someone new believes that they really are clever and tries to learn from them you get like the thing with the monkeys where all the monkeys bite the new monkey that goes near the hose but none of the monkeys knows why!

before I start i will explain a few things about what my idea is.

I WILL NOT be describing my strategy or making trading calls because i am not trying to teach anyone my strategy, i am explaining how someone can make their own.

I am not going to answer questions about if i am a millionaire or full time or part time or still learning or whatever. I can do this because I am not asking for money or anything so you can take my blog or leave it.

the goodness is in what i will say and how people use it. Some people want to spend money on courses and some are good and others are bad. some people find mentors or trainers that can lead them through on a 1 on 1 basis or sometimes in a room. Some people like tp pay for signals from other traders to find there feet. But there is already the right information on the internet for free to learn to trade, in my blog i will try and explain HOW to use what is already there.

please no haters on my blog or i will stop

 

[DashRiprock]

so the first thing I will write is about is the plan for this blog. it is a famous saying that trading is "Method, Money and Mind" and that is right. So, in the beginning i will start about how to find a method, and then how to learn about your money management, and then at the end about how to train your mind.

in learning about trading I think this order is the best way - method, money, mind. Obviously each one is more than one blog post but i dont know how long. I am starting with the "method" part and like before i am not going to say "pick this method" or "that method is rubbish" or tell you about my method but i will talk about how I think the best way is to find your own.

this blog is probably best for people who have traded a bit for themselves but are still trying to find their way. as well if you have been trading for ages this blog will hopefully be good for you but try and approach it with a new mind.

you should know about how to make trades and what stops are and things like that. almost definately you will know about graphs and news and indicators and things like that from what you have done already.

i hope this blog is also good for people who have not much money because i will only try to talk about things that are free or cheap. learning about trading doesnt need to be expensive but some people thing that only things that are good cost lots of money and thats wrong.


one last thing if you read my blog but still lose money dont sue me or anything!
actually that is a good point, even if what i write in this blog is absolutely correct and you do all the steps and you have a great method and money managenemtn and mind you can still lose money. nothing is promised in trading.

 

[DashRiprock]

Method page 1

right enough guff i will start and explain how I think the best way to learn trading is! I will make some bits underlined like the names of chapters in books for it to be easier to read.

Method:

How to find your method.

The problem with the internet and trading forums is that there are lots of "methods" about that arent really methods and alot of them are BS anyway just by people pretending to be more clever than they are. But if you are a learner this can be hard because you see lots of people describing their "methods" and it is natural to think "well thats what a method is, im going to make one the same".

a real method is more than rules about entries and exits!

trying to find a method by looking at the rules of other peoples method is like trying to make a lego car just from looking at the picture on the box.

all good trading methods are made up of different layers. the rules about entries and exits are just the picture on the box, but nobody ever talks about the layers underneath. Some people dont even know about layers and these are probably the pretenders.


What are the layers of a method like?


The most important layers of a trading method are your trading BELIEFS.

In trading and specially for people not in a bank or a big hedge fund there are loads and loads of questions but not very many proper answers. If you are looking at a graph or the level 2 and time and sales or even just the price number you see it go up and down. In most of life people look at what they see before and then what they see after and join the dots in the middle to make an answer about why. But in trading there mostly isn't a proper answer.

So when you are looking at the markets you have to accept that you will not often really know the answer. but its ok because you dont really need to know the proper answer if you have beliefs.


What do you mean beliefs? what are beliefs?

well I dont mean about your starsign or religion or the moon is made of cheese.

Beliefs about markets are about how you think markets work and who is involved and how you explain to yourself what you see. Obviously there is nothing that is always true or always false but you can generalize because you know that you will never always know the proper answers for why.

it is easiest to help explain what beliefs are by giving a list of what some are. Im not going to say which ones i like and I dont like and obviously there are loads... but beliefs like the ones here are the first layer behind the picture on the box of your method.


example beliefs

"markets are like rubber bands, they stretch too far one way and spring back"

"markets go from times of contraction to times of expansion"

"ignore graphs markets are driven by news"

"markets are usually more likely to go in the way they are already going"

"in the short term markets are moved by big traders and big orders"

"markets are like waves they go up and down and up and down"

"markets are made of people and people remember prices from before"

"markets are always looking for where the most money is"

"markets are usually looking to cause the most pain"

"markets wont move if they are too long or too short"

"most of the time markets dont move too far from an average"



these are just some examples of beliefs about explaining what you see in the markets. you can have more than one belief about markets and these are dummed down a bit because beliefs can be complicated and personal.

in the next blog I will try and explain how i think learner traders can explore their beliefs about markets.

 

[DashRiprock]

if anyone has any questions about what i say please ask

 

[Martinghoul]

I thought it was going to be a blog, but you're actually gonna have a thread here instead?

 

[DashRiprock]

I thought it was going to be a blog, but you're actually gonna have a thread here instead?

interactive blog?

a rose by any other name would smell as sweet :smart:

 

[Blaiserboy]

interactive blog?

a rose by any other name would smell as sweet :smart:

Beliefs is certainly a fundamental to trading and also to success as a trader.. A good thing would be for a person to establish clearly what his beliefs may be and then change the necessary ones so as to have a healthy set of beliefs about trading and markets and success.

 

[DashRiprock]

hi blazerboy

yes i am the same beliefs like i said beliefs are important in trading.

i will write more about for new traders how then can start to find their own beliefs instead of copyeing other traders methods. for me it is very important in learning about trading that you find your own space and get the confidence to ignore all of the rubbish on the internet because when you trade it is only you and the market the internet cant help!

thanks for reading my blog (i dont know what martingale is talking about threads and blogs but as long as no hater more the merrier )

 

[DashRiprock]

A good thing would be for a person to establish clearly what his beliefs may be and then change the necessary ones so as to have a healthy set of beliefs about trading and markets and success.

hi again

I dont want to jumble up the order of the blog but beliefs come into two parts of trading i think - the method and the mind parts.

but what i think is funny and maybe a bit sad is that the beliefs people already have about the mind part of trading mostly do better once they have been changed a bit.. i mean most people need to change their mind beliefs at least a little bit, and these are the ones that have been in the longest.

but also some people need to change their beliefs about methods. and they can change the beliefs in their mind ok but they are married to their newer beliefs about the markets, but all ther beliefs about the markets come from the internet and pretenders and from looking at the picture on the box!

anyway thannk for reading i will get to all of this in the weeks or months ahead

 

[Pazienza]

Good start, best of luck with it. This could be a very interesting project.

If you get haters, send them to me. The more the merrier. I love a good row, I could start a fight in an empty room.

 

[DionysusToast]

Excellent - I am sure this will be a fantastic contribution to the board.

Love the new Avatar too...

I totally agree about beliefs. I have talked to people with totally different belief systems on the market yet they still make money.

There's a guy on the web "futurestrader71" who has his own prop shop, he's got some fantastic webinars on line. He is all about using volume profiles, LVNs, CLVNs, etc. etc. He has a very fixed idea about how the markets work (auction theory) and how much analysis is needed and how his 'homework/study' of the prior days/weeks outside of market hours helps him set levels to trade in market hours. To him, this homework and associated theories is an absolute must. He does use DOM to refine entries but he really doesn't seem to focus very much on it at all.

On the other hand, another guy I know is an avid tape/DOM reader and after many years can quickly tune into wheat, crude, eurodollar, es, ym, nq,dax, bund futures and start to trade them. He is totally fixated on DOM/T&S and this is where he sees the edge. He has different theories which are much looser than FT71s yet they still make him money.

Good stuff Dash

 

[Trader333]

I love a good row, I could start a fight in an empty room

Presumably then you must have multiple personalities


Paul

 

[DashRiprock]

Method page 2

ok so the next bit is about how a learner trader can explore there different beliefs and see which ones best suit what they see in the market for them. I will also explain what I think some of the biggest dangers and problems in learning to trade at this stage are.

Market Facing Time

obviously anyone cant explore there way in markets without actually being in markets, but there are bad ways and good ways and even better ways to do it. here are some points that i think learner traders should think about when they are starting out at building their first part of market beleifs:

dont be on trading websites or other websites when learning about markets! from all the pros i know non are looking at forex factory or whatever when they are trading, it is a distraction and will lose your focus. it is better to spend one hour only on markets and one hour only on websites instead of two hours on both becuase of the information you can soak up.

• in the beginning, dont even think about trades you might do or keep a record of your successes and failures. without some mind trading and things it will probably go badly and can be a real knock for your confidence.

• a good thing to do is just to be writing down what you see in the market and forget all about the why part. like i said there are no proper whys so get it out of your mind. just be writing things like "going up" or "going up and down but mostly sideways" or "keeps making new lows" or "it is getting squashed up" and things of that nature. dont be looking at what was or why but just look at what IS.

• on from the one above try not to be writing about everything that is all the time. you can do tricks like looking at slower or longer markets or even squinching your eyes or looking at the screen from the other side of the room. serious.

eventually you will get better at this and sometimes you will find yourself writing about more "ISes" than others. like you might be writing "its keeping on going up" (or down) more than you might be writing "is went past the last high" (or low) or "its springing back again" or "it has turned around from this level again" or "the newspaper was bullish and its going up". this is good it means you are finding your way of saying what is happening instead of copying someone from the internet

A word about graphs and indicators and things.

now everyone when they are learner traders (except maybe people learning from another pro) experiments will all sorts of indicators and graphs and stuff. its normal because they are all so exctiting to play with!

but let me explain a bit about what they are and what they arent.

from looking on the box of someone elses method it might look like candlesticks or indicators or market profile or trendlines or all of the different things like this are methods. THEY ARE NOT METHODS. all they are is different ways of presenting the same information to make it easier to look at, because unless you are like the rainman you cant do it all in your head.

different people argue about which ones are better than others, like some people say "all indicators are lagging" and other people say "support and resistance is all in hindsight" and on and on and on. i think most people that do this are the pretenders on trading forums so ignore them! there isnt any "these are good" or "that doesnt work". you can have two different traders who see the same things in the markets (like i described above) and have the same beliefs about markets (from the first page) but totally different ways of presenting to themselves what the market is doing. So you can have trend traders who use point and figure and trend traders who use indicators and trend traders who use chart patterns and so on and so on.

sometimes you have people who say such and such doesn't work because it goes against there beliefs about how markets work. like someone who things about news moving markets might say trendlines are BS. or whatever. If someone says something like this the best thing is just to ignore them. because like i said before there are no proper anwers on right or wrong or good or bad. all that person is really saying is that one method doesnt fit in with their beliefs and understandings about how markets work. its fine to say that. but remember when it comes to trading, it is just you and the market. if your broker gives you a margin call you cant say "err....... but the internet thought my trade was really good!".

the internet and trading websites are good for some jokes and some matey banter but if you are a learner trader it is very easy to get sucked down a path towards a method before you a ready. and people like to follow the herd too, me you and everyone. cant be helped. so dont expect to be with the herd one day and go your own the next - for learning about your trading, avoid the heard altogether.


next step

for me i think i have explained what the three major layers of a trading method are. I havent said how to start to put them all together yet but that is another big topic and ill do it next. because my wording isnt good ill say again, i think the best thing for a learner trader to do first is to explore:

what they believe about markets
practice what is without why
try the different ways of looking at the information



just my $2c

 

[paulevans85]

As a newb trader, the "A word about graphs and indicators and things" section was great! A gold star to you.

All I've seen so far is a million different ideas about what moves the market, what charts and lines will give you the best direction, etc. This helped put all of that in perspective. It's akin to asking what the best cake is (cakes? seriously? that's the best analogy I could come up with?): everyone has their tastes and just because Gary likes Carrot cake doesn't mean that Gertrude will like it more than the red velvet chunk on her fork

Thanks for the tips, can't wait to read the next installments

 

[DashRiprock]

As a newb trader, the "A word about graphs and indicators and things" section was great! A gold star to you.

All I've seen so far is a million different ideas about what moves the market, what charts and lines will give you the best direction, etc. This helped put all of that in perspective. It's akin to asking what the best cake is (cakes? seriously? that's the best analogy I could come up with?): everyone has their tastes and just because Gary likes Carrot cake doesn't mean that Gertrude will like it more than the red velvet chunk on her fork

Thanks for the tips, can't wait to read the next installments

hi

thanks for nice comments on my blog but millions of cakes is dead right and next i will talk about ice creams instead of cakes but the same!

like i said before just avoid the herd and find your own way, cos when you are trading the internet cant help you

 

[Black Swan]

Presumably then you must have multiple personalities


Paul

no flies on you eh Paul?

 

[meanreversion]

I love a good row

Just like Steve Redgrave?

 

[arabianights]

more pictures of naked ladies please

 

[DashRiprock]

my blog my rules.

no haters please

 

[arabianights]

i hate dash