Best Thread Featured Quick reference for real trading profit. Tips that work

[andrewbee]

I can't believe nobody's mentioned this yet: backtest, backtest, backtest. Hone your strategy on historical data. Then forward test it, before ever committing a cent to the markets.

 

[Paulds11]

I second that!!!!

Me too, I agree .. but ....

we should also be very mindful of several issues with backtesting: (I mention this here for those starting out on the journey)
1. this may be an off-putting experience to the uninitiated. The paradox is that this approach actually requires more intense study (learning your tools), but this increases the steepness of an already logarythmic learning curve in many respects and therefore possibly the amount of time taken to reach CONSISTENT profitability... Have you tired to write an indicator in easylanguage as a newbie?.. Im still studying the language intensely.. it takes time...

2. remember it takes around 2 years of Trading to learn the craft even though you may get it quickly some lessons are simply not quickly learned unless PAIN is involved in the process. This means paper trading is inherently flawed as a de-facto one-size-fits-all approach to learning. Remember this really is a generalization because we are all different, but regardless of your intellect the ability to know thyself, and how you respond to trades once in them with REAL money is a lesson in self study no amount of paper trading will prepare you for. I couldn’t believe it that I was collectively following orders between a group, decided to take the SAME trades and eneded up loosing whilst they gained.. Bizarre! KNOW THYSELF behaviour FIRST!!

3. Beware OPTIMIZATION!! in my experience optimization lowers the shelf life of any automated backtest strategy. A back test really should yield profitability over several timeframes, at different times of year and ideally also be applicable to different markets.

Summary:
Backtesting is good, but it requires even more study than initially perceived. It takes about 2 years of intense interaction and commitment to study to become successful trading... Most who consider trading often underestimate the study required and the time itll take to reach that level.. no wonder then (like me INITIALLY) MANY ARE DISCOURAGED AFTER 6 MONTHS OF NO SUCCESS TRADING,


Wait in line
Do your study time,
Dont want to be called a dummy?
then keep an eye out for other sources of money
Remeber when you were14, 18, 21 and thought you knew it all?
Trading is a bit like that stick with it my freinds.. hopefully I see you all at that Black Tie celebration Ball..

Happy Trading Dudes..
Paul

(Trading: The hardest way to earn an easy living)

 

[rednite]

Don't think about what the market will do; Look at what it's doing.

 

[nkruger]

"A traders job is to identify patterns in the market's behaviour that represent an opportunity ~ and then determine the risk (or cost) of finding out if these patterns will play themselves out as they have done in the past"

Mark Douglas "TITZ"

 

[charttrainerdotcom]

My tip, ignore tips.

JonnyT

absolutely awesome comment! maybe that´s crucial.

funny: i found out that in short term trading the direction of entry (long or short) is not really too important. what counts is the take profit and stop loss/money management. i posted some CFD trades at my site.

 

[theroguetrader]

What I would really like to know is : is there a website somewhere out there which gives a reliable daily tip on the Dow ? My tip would be to follow same if anyone knows of such a website ???

A " tip " is exactly that - try not to listen to the opinions of other market participants. Why ?
because the more you do,the harder it will be to get out of a losing position. Sure, look at economic reports/ speeches from Central Bankers or whatever data is applicable and can move the markets you trade in -
The financial news channels can be just as bad as well -

 

[nkruger]

the five min candle is a nice indicator for quick moves and trading the 1 min candle for me is a guarantee for disaster

Tip for newbies.
Try 1 min, 5 min & 30 min. Wait 'til they all line up.....

Bob's ya uncle.

(Unless you live in Norfolk, and then he'll be your husband and your uncle...)

 

[craneman]

I also use a 'top down' method, I like to make sure Indexes, sectors, then stocks are in line before getting in. You can use this on many different time frames. You dont make as many trades waiting for the stars to align, but you wont need to.

cheers.

 

[ammo]

learn to draw trendlines and then trade them,while you are try

ing to figure out all the smal moves, you patiently trade the extreme trendline moves,make a ton of dough and u r trading with the big money, they trade small in the middle and big on the extremes, the middle is where the small trader gives it all back,its free money for the pros, if they know its going up they push it down ,get u short,then push it up, and vice-versa, so dont trade except on the extremes,channell tops and bottoms,while u are patiently making oodles of cash on the extremes,you will learn freeely thru patience..the shell game being played in front of u ...easily said...practice..its all about discipline...u wouldnt b greedy if u were rich, and u will never b rich if u r greedy..

 

[charttrainerdotcom]

Interesting! I always try to stay out of the big moves. For me the 30 min, 15min, and 5min candles are most viewed setting. I try to get myself to only trade in direction of the major trend and not trade the little backswings/reversals. As I am using a leverage of 50 I only need 0.2% movement in the underlying to bring the trade home profitably. You can see hundreds of my trades on my site. Do you use leverage at all and if so through which instruments?

 

[Drill]

"The Bulls Make Money, The Bears Make Money - The Hogs Get Slaughtered."

Bear this in mind if you have a problem with using too much leverage and getting in and out of trades often. I am sure everyone here is beyond that but it may help some beginners

 

[RogerTheTrader]

=============================================================

Its so uncanny and correct that one wonders if the powers that be at the tv station have a vested interest in the stocks and currencies talked about --- would be wonderful to see if they indeed did sell and open short positions !

mp

The vested interest is in their audience. If you understand the audience, then you'll understand how they chat.

The audience is predominantly going to buy stocks, ETF's, or mutual funds. The time frame of the investor is in years. So their success is predicated on a bull market.

Listen how many times a day they ask,"Give me some names. What are you buying now? What stocks will be strong at the end of the year?"

Their audience is not made up of traders. The best trader's show in CNBC is "Fast Money" - they trade... "Buy the dips and sell the rips." They'll short or use options.

Jim Cramer's Mad Money audience are stock buyers. Most of them are buying and holding for a while.

If you get tired of the incessant drivel that spews daily, "Is this a bottom? Is today the bottom? Will tomorrow be the bottom? Are we forming a bottom?" Just remember the audience.

(And the bottom is a ways off... I ran Fibonacci Retracements on the SPX since 1928 and every bull market pullback retraced to the 50% level... every time. If that holds for this pullback, we're looking at an SPX bottoming at 1182... another 140 points down.) The bears are here to stay... bulls may visit... but they won't be charging anywhere for very long.

 

[Pele1970]

Excellent points ammo. Trend line and price and time. Too simple for most traders to figure out..not enuf action.

 

[mp6140]

The vested interest is in their audience. If you understand the audience, then you'll understand how they chat.

The audience is predominantly going to buy stocks, ETF's, or mutual funds. The time frame of the investor is in years. So their success is predicated on a bull market.

Listen how many times a day they ask,"Give me some names. What are you buying now? What stocks will be strong at the end of the year?"

Their audience is not made up of traders. The best trader's show in CNBC is "Fast Money" - they trade... "Buy the dips and sell the rips." They'll short or use options.

Jim Cramer's Mad Money audience are stock buyers. Most of them are buying and holding for a while.

If you get tired of the incessant drivel that spews daily, "Is this a bottom? Is today the bottom? Will tomorrow be the bottom? Are we forming a bottom?" Just remember the audience.

(And the bottom is a ways off... I ran Fibonacci Retracements on the SPX since 1928 and every bull market pullback retraced to the 50% level... every time. If that holds for this pullback, we're looking at an SPX bottoming at 1182... another 140 points down.) The bears are here to stay... bulls may visit... but they won't be charging anywhere for very long.

===================================================================

A MOMENT to explain RGT ---- what i posted was not a "question" but an answer !

allow me a story of a absolutely true, real life experience that was repeated a number of times before my eyes.

I worked for 30 years in the film and tv business in NYC and there was one studio I would help out in when a good friend of mine was busy --- the woman who hired the directors and crew had a passion for hiring those from mnbc, and the reason soon became obvious. 10 years ago she had stock trading software loaded on her work computer, and was receiving "tips" as to who was going to appear on the show that day.

as you know, no ceo ever says anything BAD about their company on tv, so invariably the price of that CEO's stock rose sharply whenever she/he appeared on one of the shows. Needless to say, she had bought those stocks premarket and waited and when the CEO appeared, she sold into the sudden intraday rally !

Obviously she was very successful and continued to hire the directors who worked at MNBC and probably still does !

In the original post, I was actually joking about, since we will often have rallies in commodities, currencies or equities and INVARIABLY that small rally will sell off after MNBC announces it for the second time ---- Im fully aware of the market workings, down to the hour on the third day of a rally that one sells so as not to get stuck in the downdraft that follows and aware of who follows the shows on that channel - - - - - -

as Jim Cramers show always announces "some of this information may have been previously dispensed "

LOL

i was just having some fun, thats all !

enjoy and trade well

mp

 

[Joey25]

For traders who use limit orders for exits:

When backtesting assume you only get filled if the price goes one tick past your exit order.

 

[Mr_Nasdaq]

test

 

[Paulds11]

Originally Posted by akshaytalwar View Post
To be successful in online trading, you must be equipped with the right online currency trading software. There are numbers of trading software available in the net, but you must choose one which is able to bring you wealth and rewards. Being able to have a suitable trading structure will ensure success for you in online trading. Having the right tool that goes well with your trading needs and preferences will lead you to the top of your trading endeavors.

This to me is a typical newbie mistake!!.. and I have only just realised this myself... the platform IS NOT the key... YOU ARE THE KEY... your reasons for THAT trade and your RULES are by (far lets say 80%) of the issue. next is the Psycology at say 9.95% and the 0.05% is the platform (the figures are simply for emphasis of my argument). If you give the best trader in the world a rubbish platform they will still make the money using thier specific and favoured well structurerd easily written collection of stretegies... although they will absolutely trash the software platform untill we fall over in stitches.. so..dont believe they hype, what is more important is how you execute your strategy.. either you are intesely technical or you are using pivots or other similar price based strategies that are extreamelty specific (yes EXTREAMELY) and most newbies are hugely discretionery or loose round the edges (which is very bad) and dont have a feel for the rigourous nature in which rules must be applied, or how much time they have to spend waiting for thier set up paramneters to all tick the right boxes BEFORE they jump in on instruction of the RULE(S). Ive lost huge amount of money >£20K learning and only now do I believe Im getting somewhere.. got the painful message.... so.... the lesson?.. there is simply no discretionery trade that ever worked consistently without absolutely rigourous attention to rules, technicals and details including money management rules. so rigourous your never lost no matter what happens to price action.. the rules allow you to trade without thought without too much in trade analysis, your trading should therefore be comfortable NOT stressful!!! if its stressful the size of risk is too high &/or you dont have a suitably accurate trading strategy.. rewrite it or add to it!! SIMPLE... dont kid ourself.. the problem is YOU!! the solution is the conquering of your lak of discipline .. which again is YOU. Successful trading is you overcoming YOU!! good luck folks

 

[black bear]

Good post

"There is simply no discretionery trade that ever worked consistently without absolutely rigourous attention to rules"

Good post, so quoted ya

glad to say it cost me far less but agree 100 % with your post

1 set up

1 market

1 plan

3 timeframes max

Execute Execute Execute Execute Execute Execute Execute Execute Execute Execute Execute

check results = consistant applied your rules / method % of the time ? = HONEST or your only kidding yourself, no other F..cker

No other F..cker gives a sh..t................

HONEST

good trading


Andy

 

[Paulds11]

Spot on Andy, loving the feedback loop in your process too.. there simply isnt any other way to trade, regardless of style..
Paul

 

[onemillion]

if you cant stand the heat, get out the kitchen. that is my tip but i tell you more if you tell me how much you want to make and will that be enough?