Looking for next steps and software recommendations

financialnoob

Newbie
3 0
I’ve been reading this forum off and on for about a year. If I had to guess, I’ve spent over 24 hours reading and this forum seems to be the place for sound advice. Sure, there are results on Google saying that trade2win is a scam site, but I’ve spent enough time here to see that’s false. I have read a lot but I feel I’m far away from real trading. I haven’t read the forums in a few months, so don’t flame me if my questions below are now clearly answered, but I’m thinking that by writing this post I can get the real ball rolling for myself.

My first experience with any trading, or even the stock market, was in an online day trading room which I attended. I was pretty sure that it was a scam, as it was promoted by an AM radio informercial, but I was unemployed and desperate at the time. I truly felt like I was their target clientele, except for the fact I was broke and had zero dollars to give them although I did have the unemployed and desperate part down. There were about 20 people in the chatroom that I could see. My expectations were zero going in, and the only reason I was there was because I had to get someone off my back and they thought this was a quick trip to some income as I was unemployed. On my part I had nothing to lose and I was kind of curious what could possibly happen. My mind was open as I started the free trading room preview.

Before attending, I had heard of day trading but I figured everyone not a professional trader lost money. The trading room had some good tips but there was a constant stream of hype all the way through to motivate the guests to sign up. The total to join was about $10,000 all total to start, with a monthly fee afterwards. I asked myself how long it would take to make back the initial investment of $10k, plus the monthly fee, and while I had no data for myself it sure sounded like a lot of money. Spending that much and going in blindly sounded extremely risky, but honestly I was pretty sold so if I had the 10k I probably would have done it.

At least a couple people were making a living doing this in the trading room, and the rest were brand new people or guests. The leader of the room talked about the S&P500 e-mini, and offered sound advice along with various stories and off-the-cuff philosophy. The leader stated that he was teaching things you couldn’t get elsewhere, but right after the end of the session I went to youtube and the second video I watched showed me the secret he said wasn’t taught elsewhere. There was at least one person in the room who had quit their job and was making a living, so I figured that at some point the trading room was just to keep people company as they did their own trading.

The red flags were a few of the repeated phrases, like how the e-mini is an ATM machine and you just decide how much money you want to take out of it and do it. There was also a messianic feel that the person just wanted to help people and make everyone rich. It seemed obvious to me that getting people to pay you every month in a subscription model is guaranteed income, compared to trading which has inherent risk no matter how good you are. The people were nice though, and I could see myself hanging out there.

Watching the chart, with all the signals, and deciding when to get in and out, looked genuinely fun to me. Being in contact with a real market somewhere else was exciting, and the idea of making your day’s money in 2-4 hours seemed like a good way to make a living.

Since then I have spent a lot of time reading online here, and finished a few books. I have read Start Day Trading Now by Michael Sincere, followed by Market Wizards by Jack Schwager, and Liar’s Poker by Michael Lewis for a fun break.

The last I read was the Nicolas Darvas book “How I Made $2,000,000 in the Stock Market", which I loved and reinforced everything else I’ve read. The books have a given me some terminology and a high-level view of what trading is. I understand the concept of the S&P 500 (yes, I’m a noob), the e-mini Futures index (which appears to be a group of stocks you buy at once), and basic candlesticks. I’m working on reading more and memorizing terminology. While I have spent many hours reading this forum, what I have gotten out of it is mostly that trading is hard and there is a lot to learn but that it can be done if you have the right personality and work at it… and maybe some other stuff I’ll have to find out the hard way.

It sounds like 90% of the people fail to make money. I can see many reasons why most people just won’t put in the effort, because it seems like there is a lot more to it than meets the eye. In fact I’m not 100% sure that I can make any money no matter how much I try and how much time I put in. What worries me is that I’m not a finance junkie, and I don’t watch MSNBC for fun, and couldn’t imagine doing so every day. I do feel like i completely get the candlestick charts, and it looks like a great deal of fun. On your forum I saw the question, “Do you know what the price of crude oil was last night at the S&P500 closing? Do you care?” I’m not sure I do care, but if I had money riding on it I think I could start to care a great deal. My current job skill involves IT and computers, so I can set up the software and don’t have problems looking at a screen for hours.

So far I’ve attended a total of two online trading rooms with two different companies. Both made it seem pretty easy, but almost too easy. One had a hard sell model, and I got lots of phone calls and a few more after I told them to never contact me again. I would love to figure out how to trade on my own, but all of the tools seem so complex for the brand new trader. Joining a group would let me learn how to use the tools by watching other people use them, but not if it can’t pay for itself with the $5k and higher price tags. Lately there is a new trading organization advertising on the radio, but frankly I feel like all these trading eduction sites charge high fees, with the promise that you’ll make that money back fast, with that big ol' ATM machine known as the USA stock market. Honestly I don’t trust any of them and fear the hard sell.

My current goal is to start swing trading, because am going to work too early for the opening of the market. I also don’t feel I want to trade with real money yet, so I’d like to find a place I can do paper trading for free. I don’t mind a slow approach, and I don’t plan on quitting my current job, but it would be nice in 10 years to possibly support myself with trading. The things I learn in swing trading sound like they will apply to day trading whenever my mornings open up.

Here are the next books I plan on reading:
Do it Yourself Hedge Funds by Wayne P. Weddington III. (A quick google reveals that as of August 2015 he is banned from trading futures for falsifying reports to the government since 2008.)
How to make money in Forex by Kiana Danial
Trade your way to financial freedom - Dr. Van Tharp
Come into my Trading Room - Dr. Alexander Elder
Trading for a Living - Dr. Elder

What is lacking in the books is the software I need. I have no idea where to start with the day to day of trading. ThinkOrSwim seems to have modern-looking software, and ninja trader seems popular. What I want is a way to paper trade for free or only a few thousand dollars. I’m interested in day and swing trading. I want to start a 401k account too, so if the platform supports that separately that would be nice to have everything under one place.

If you were me, what is my next step? What is the most newbie-friendly software? Are my book choices useful? It’s just so confusing.

Thanks!
 

bootsyjam

Active member
229 22
No doubt others will disagree but I would look at futures trading as you get to see the actual volume going in and out which moves the price.
However, if you don't do that then I can highly recommend a site http://www.nobrainertrades.com/price-action-patterns

He is a pure spot fx trader who doesn't use futures volume. Interestingly, some of his chart patterns work due to what has happened in volume (i.e. sellers trapped etc) that you see in futures, it's just that you never really know how many people are trapped in spot fx!
And his ideas on trading spikes is also backed up by futures volume data and volume profile as well!

I would also buy "The Trading Athlete" before you buy anything else to start your mental training.

Make sure you know your set ups, and only trade your set ups and nothing else. No seat of the pants entries ("well I felt that the market was....").

And, to be honest, I would look into futures trading. The platform costs are higher, but to be able to see the volume, when it is drying up, when it is surging on one side whole the others side is pulling away etcetc is vital. Look up volume profile and watch videos on youtube. Handy tip-you don't want to trade around the volume point of control (the VPOC), you want to trade at the edges of the bell curve where less people are interested in trading.

Here's nobrainer's take on it http://www.nobrainertrades.com/2015...g-a-futures-platform-to-trade-currencies.html

Sierra chart is the cheapest option you will get for a platform with volume profile (you will have to pay for a data feed).

That probably brings up more questions than it answers, all I know is that pretty much all the pros who daytrade do so in futures. That should tell you something. Volume profile and tape reading are the advantages.
 
 
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