New to trading? WTF?

[MrGecko]

LiamH:

Go and read a book about crowd psychology - "Madness of Crowds" is the famous one. Understand that people don't change, and that trends do exist for a variety of reasons. A couple of these might include 1) information is disseminated to market participants at different times, or 2) it can be in the interest of professional money managers to position themselves with their competitors.

Then try and get a book on sports psychology... One I haven't read, but gets lots of good press, is "Golf is not a game of perfect". Read it and re-read it (whichever book you get).

Then, do a quick google search on basic price action - Trader Vic and Steve Nison will do.

After that, pull up a daily chart of whatever instrument you like. Put on it a 20d Donchian channel and a 50 period SMA. Set up your software to trigger an alert if the high or low of the day breaches the upper or lower quartile of the donchian range (so lower limit = (mid+low)/2).

When you get a signal, take a look at the 50sma to see if it is trending in the appropriate direction (e.g. a pullback to the lower quartile wants the 50sma to be sloping upwards convincingly).

If it is, put a trade in the appropriate direction. Set a stop at 5*ATR(30) equal to 3% of your account. This is a disaster stop, the plan is to get out well before then...

... because you will be looking for weakness in the price action that you have learnt about. Don't put marketable orders in below the most recent low, for example - if it is tested, wait to see if there is any follow through or whether it was just a "toe inthe water' scenario. If it looks bad, close it out - if it looks promising, keep it open.

There you go, for free.

P.S. Tongue in cheek, of course

 

[Black Swan]

Hopefully!

Honestly, I am aiming to make a career of trading but can't believe how long it's taken for certain things to sink in. Mostly regarding probabilities and potential gains. Newbs are lead so far up the garden path it's difficult to find their way back - I think this is what contributes massively to the old 95% malarky.

Liam, sorry to trot out a few soundbites but here goes; IMHO it takes 12 months of full time immersion in this field before you can become in any way proficient and proficient does not nec. equal profitable.

In order to become proficient (and dedicate the thousands of hours of screen time required) you have to either have lost your job and have enough capital to survive/set yourself up, or be a serial entrepreneur who has decided to 'give trading a go..' IMHO this dream that folk start of part-time and then seamlessly transfer to full time, then putting 2 fingers up to the boss, is one of the most insidious bits of misinformation continually looped ..

In relation to all the info/opinions offered up on the various boards embrace it all, visit all the dark corners of the trading world on the web, even the lunatic fringe have their uses. But it's all down to you, there's no short cuts.

 

[LiamH]

Liam,so much of what you say is true,but I dont know where to begin to answer it.
But I dont work at ASDAs,well not yet.

Heh, the people I was talking about know damn well who they are! I don't want anyone to think I was slating everyone with above average number of posts, I'm sure some of you talk sense!

 

[LiamH]

LiamH:

Go and read a book about crowd psychology - "Madness of Crowds" is the famous one. Understand that people don't change, and that trends do exist for a variety of reasons. A couple of these might include 1) information is disseminated to market participants at different times, or 2) it can be in the interest of professional money managers to position themselves with their competitors.

Then try and get a book on sports psychology... One I haven't read, but gets lots of good press, is "Golf is not a game of perfect". Read it and re-read it (whichever book you get).

Then, do a quick google search on basic price action - Trader Vic and Steve Nison will do.

After that, pull up a daily chart of whatever instrument you like. Put on it a 20d Donchian channel and a 50 period SMA. Set up your software to trigger an alert if the high or low of the day breaches the upper or lower quartile of the donchian range (so lower limit = (mid+low)/2).

When you get a signal, take a look at the 50sma to see if it is trending in the appropriate direction (e.g. a pullback to the lower quartile wants the 50sma to be sloping upwards convincingly).

If it is, put a trade in the appropriate direction. Set a stop at 5*ATR(30) equal to 3% of your account. This is a disaster stop, the plan is to get out well before then...

... because you will be looking for weakness in the price action that you have learnt about. Don't put marketable orders in below the most recent low, for example - if it is tested, wait to see if there is any follow through or whether it was just a "toe inthe water' scenario. If it looks bad, close it out - if it looks promising, keep it open.

There you go, for free.

P.S. Tongue in cheek, of course

Cheers MrGecko... I think?! You say it's tongue in cheek but it more than likely works so I'll throw it on a chart and take a look hehe

 

[LiamH]

Cheers for the replies all!

The 38 steps... I prefer condensed to 5. I guess I'm at 3 wishing I was at number 5 and I suppose I have a few years to go yet then! It's a shame that people must go through stages 1 & 2, I suppose the people who don't are the ones who come to trading off the back of a related degree?

I have taken in quite a bit of info about trading and still haven't found something I'm comfortable with, it's surprising how difficult it is but once I have a strategy I trust and have developed myself the rest will fall into place much easier.

It's quite a few times now that I have been told to go buy some psychology books so I'll definitely do that this weekend!

 

[MrGecko]

Cheers MrGecko... I think?! You say it's tongue in cheek but it more than likely works so I'll throw it on a chart and take a look hehe

Thats the point mate - in hindsight I can see that other posters have made the same point I am trying to. It ain't what you got, it's what you do with it.

Of course, "thinking sexy thoughts" isn't going to turn a bad strategy into a good one, but "good" strategies don't outnumber bad ones 20:1.

 

[Black Swan]

Cheers for the replies all!

The 38 steps... I prefer condensed to 5. I guess I'm at 3 wishing I was at number 5 and I suppose I have a few years to go yet then! It's a shame that people must go through stages 1 & 2, I suppose the people who don't are the ones who come to trading off the back of a related degree?

I have taken in quite a bit of info about trading and still haven't found something I'm comfortable with, it's surprising how difficult it is but once I have a strategy I trust and have developed myself the rest will fall into place much easier.

It's quite a few times now that I have been told to go buy some psychology books so I'll definitely do that this weekend!

Presumably you'd done the tour and come across forex strategies revealed? Tons of strats on there that'll give you fairly decent entry criteria/might work..you might find one to fit..just a thought..

 

[LiamH]

Liam, sorry to trot out a few soundbites but here goes; IMHO it takes 12 months of full time immersion in this field before you can become in any way proficient and proficient does not nec. equal profitable.

In order to become proficient (and dedicate the thousands of hours of screen time required) you have to either have lost your job and have enough capital to survive/set yourself up, or be a serial entrepreneur who has decided to 'give trading a go..' IMHO this dream that folk start of part-time and then seamlessly transfer to full time, then putting 2 fingers up to the boss, is one of the most insidious bits of misinformation continually looped ..

In relation to all the info/opinions offered up on the various boards embrace it all, visit all the dark corners of the trading world on the web, even the lunatic fringe have their uses. But it's all down to you, there's no short cuts.

Although I agree with most of this I don't necessarily share your beliefs with regard people starting part time with the goal of ditching work. This is something personal. Maybe most don't have the dedication or motivation, I don't know and can't speak for others but I know where my head is, what I want to do and how I'm going to do it. My missus is a bright girl and would not stand for some half assed ****wit dreamer who can't make things happen for themselves. There was a time I thought this was a get rich quick thing and that time was 3-4 years ago, I've grown up a bit and sorted my goals out since then.

First I need to come up with a strategy and then I need to implement it profitbaly for a year or two on a small account. After that I can consider coming up with the cash needed to make a living from this business.

Until then I'll keep spouting sh!te on the forums and pouring over charts. I currently have an 18month old daughter and another on the way in about a week - The plan is to be living off trading by the time they're in secondary school.

This, I believe, is quite realistic.

 

[FX Bandit]

It's quite a few times now that I have been told to go buy some psychology books so I'll definitely do that this weekend!

Read "Reminiscences" - a truly superb book, and excellent on the psychology side.

 

[LiamH]

Presumably you'd done the tour and come across forex strategies revealed? Tons of strats on there that'll give you fairly decent entry criteria/might work..you might find one to fit..just a thought..

No I hadn't actually but will take a look.

 

[LiamH]

Thats the point mate - in hindsight I can see that other posters have made the same point I am trying to. It ain't what you got, it's what you do with it.

Of course, "thinking sexy thoughts" isn't going to turn a bad strategy into a good one, but "good" strategies don't outnumber bad ones 20:1.

Nah, I do get this point mate... Maybe the things I say come across as they shouldn't sometimes. I know there are tonnes of strategies out there that will make money when executed properly - It's my ability to do that which is the problem.

If I come up with something myself, that I trust and that makes complete sense to me, my time constraints and personality I will do much better.

 

[Black Swan]

There was a time I thought this was a get rich quick thing and that time was 3-4 years ago, I've grown up a bit and sorted my goals out since then.

First I need to come up with a strategy and then I need to implement it profitbaly for a year or two on a small account. After that I can consider coming up with the cash needed to make a living from this business.

Until then I'll keep spouting sh!te on the forums and pouring over charts. I currently have an 18month old daughter and another on the way in about a week - The plan is to be living off trading by the time they're in secondary school.

This, I believe, is quite realistic.

Not at all, I reckon it's a testament to how you've addressed your issues/asked for help that's brought out so many responses..got to go..on the late shift at Tescos, got some trolleys that need parking, then its on with the night vision goggles to watch some top quality dogging...

 

[LiamH]

Not at all, I reckon it's a testament to how you've addressed your issues/asked for help that's brought out so many responses..got to go..on the late shift at Tescos, got some trolleys that need parking, then its on with the night vision goggles to watch some top quality dogging...

Ha ha enjoy your shift!

 

[Depth Trade]

Liam, I'm going to save you thousands of dollars, 8 more years and your marriage. Quit wasting your time with this bllsht. It's not going to be months until your profitable, it's going to be 25 years until you could even come close to being profitable. By that time, there won't even be currencies to trade, there will either be a global currency or the entire western world will be like Somalia.
You need to be reading about what is really happening with our economies and where Silver/Gold are projected to be by the time you could even be profitable.

Son, we are talking $200 silver and $10,000 gold, this is no 'bllocks' as you brits would say.
Fk, sitting at the computer every day after work chasing down some pipe dream that is on the verge of dissipating. Do you really want to miss watching and playing with your child, that time is irreplacable.

I guarantee that if you start investing any money you have, borrow or accumulate in the next 10 years and put into precious metals, it's going to go through the roof.

We are just entering the first of 5 expected bull runs in metals.

Have a good day.

 

[FX Bandit]

Liam, I'm going to save you thousands of dollars, 8 more years and your marriage. Quit wasting your time with this bllsht. It's not going to be months until your profitable, it's going to be 25 years until you could even come close to being profitable. By that time, there won't even be currencies to trade, there will either be a global currency or the entire western world will be like Somalia.
You need to be reading about what is really happening with our economies and where Silver/Gold are projected to be by the time you could even be profitable.

Son, we are talking $200 silver and $10,000 gold, this is no 'bllocks' as you brits would say.
Fk, sitting at the computer every day after work chasing down some pipe dream that is on the verge of dissipating. Do you really want to miss watching and playing with your child, that time is irreplacable.

I guarantee that if you start investing any money you have, borrow or accumulate in the next 10 years and put into precious metals, it's going to go through the roof.

We are just entering the first of 5 expected bull runs in metals.

Have a good day.

Not sure about your post, but I love your signature .

 

[LiamH]

Liam, I'm going to save you thousands of dollars, 8 more years and your marriage. Quit wasting your time with this bllsht. It's not going to be months until your profitable, it's going to be 25 years until you could even come close to being profitable. By that time, there won't even be currencies to trade, there will either be a global currency or the entire western world will be like Somalia.
You need to be reading about what is really happening with our economies and where Silver/Gold are projected to be by the time you could even be profitable.

Son, we are talking $200 silver and $10,000 gold, this is no 'bllocks' as you brits would say.
Fk, sitting at the computer every day after work chasing down some pipe dream that is on the verge of dissipating. Do you really want to miss watching and playing with your child, that time is irreplacable.

I guarantee that if you start investing any money you have, borrow or accumulate in the next 10 years and put into precious metals, it's going to go through the roof.

We are just entering the first of 5 expected bull runs in metals.

Have a good day.

I'm not entirely sure whether or not this is serious? You're probably right about metals going through the roof but I can't see me being able to invest enough to capitalise on a scale that would deter me from trading currencies! And 25 years? Pipe dream? How did you get into trading and how long till you became profitable? I would wager that the tools commonly available to anyone for free on the tinterweb weren't so freely available when you started out? I'll be profitable within 1-2 years, that's almost certain - Living off trading? Well that will take a bit longer.

One of the reasons for my whole plan taking so long is my kids... I would not sacrifice time with them for any career or any amount of money

 

[meanreversion]

Depth Trade, are you a fan of Ambrose Evans-Pritchard who writes for the Telegraph?

A few years back I would dismiss extreme scenario punters such as him and yourself .... but it's all coming true! All fiat money systems come tumbling down at some point, and with Bernanke's reavowal to print money, not simply to avoid deflation, but to bring back inflation (!), things are going to get VERY interesting in the macro space.

 

[bedsit]

I'm not entirely sure whether or not this is serious? You're probably right about metals going through the roof but I can't see me being able to invest enough to capitalise on a scale that would deter me from trading currencies! QUOTE]

The price of gold has been mostly caused by speculative trading and some fear factor.
I wouldn't go for it unless there is a hyperinflation scenario.

 

[Depth Trade]

I'm not entirely sure whether or not this is serious? You're probably right about metals going through the roof but I can't see me being able to invest enough to capitalise on a scale that would deter me from trading currencies! QUOTE]

The price of gold has been mostly caused by speculative trading and some fear factor.
I wouldn't go for it unless there is a hyperinflation scenario.

By your own admitance, you would not know when that point came, nor would be willing to buy at those prices. Odds are you wouldn't even be delivered.

I have news for you, this place already collapsed.


http://www.youtube.com/watch?v=1WJ0CjGOsG8&feature=related