shorts

[stevet]

i have met a lot of people who tell me they make money trading, but they seem to use a different sort of P&L to me!

you can have a few lucky wins, but if you trade consistently on an ongoing basis, you are going to lose if you trade part time

and lets face it, if anyone was even remotely confident with their part time trading, they'd move to full time straight away

i made money trading part time, but that was because i took very few trades, where i had an edge, but when i moved to full time trading, i re-evaluated my definition of making money, and also my deifinition of being a trader - a full week of full time trading, changed my perspective a lot

 

[Naz]

Interesting thread.

Payneg01 i hope it was my cd you watched.The real thing one to one is even better.

In the last four years i've spent most of my time on city trading floors trading side by side with other traders.I've also spent an awful lot of time sitting and talking to so called experts in tv studios.I have the pleasure of knowing a few traders making over 7 figures year in year out on both the UK and US markets.

I've seen a part time Nasdaq trader who doubled his account in three weeks.Went full time and it didnt work for him.

I personaly know many course trainers both in the US and the UK.

The thing is i reckon i took something from everyone of them and to many more to mention.But the one thing i reckon most had was belief.They believed in their market, their way of trading and were quick to take the trade and quick to take their stop because they'd done it time and time again.I also noticed that by watching them trade or calling trades most had something that they didnt realise they had and that was they had found a style that suited their personality.

So if i was onceagain i would stop trading and start learning.First of all it conserves capital.Look at everyones style.This site is a good place to start.Go on courses and listen to people.Try lots of things out with realy small positions or on paper.Keep a log.Find out what it is in your make up that causes you to take the wrong trades.But learn wherever you can and then come back in slowly.

For Example.Years ago i learnt about island reversals.The guy was passionate about them.It always stayed with me.In the last 3 months on the Nasdaq they've earnt me a bundle.They've been popping up all over the place.Its not my style of trading but hey i remember the passion he had for them and its always stayed with me.Look at the market chat thread from March for some examples.

 

[payneg01]

Hi Naz
Yes it was, I did'nt want to be acccused of plugging any one or any ones system, but many thanks. I thought it was first class, and if it's O.K with you I'll be in touch soon than later, all being well.

Many thanks
Greg

 

[stevet]

Naz

You make some interesting points - but the key one for me is the point about being quick to take a trade and quick to take a stop, and to me that is about the most important part of trading that anyone can learn - and in particular - quick to take a stop - but at the right level - a wrongly executed stop is as bad not taking the a stop - only execute stops at the correct level

and i believe you can only learn that through full time trading, no one can teach it to you and paper trading will never teach you - even trading small size won't teach you - your mistakes have to hurt - so you learn - and in fact all your stupid non-disciplined trades do hurt - the ones which are just losses are the least costly - in terms of your wallet and brain ache

sitting next to city traders must have shown you that there are all sorts of traders, and i assume you mean banks as opposed to pure trading companies in the uk ( most of which only scalp bonds) , and at the banks, some traders end up being there just to make the room look busy to impress a big investment customer, a lot of traders just end up front running those same customers orders to make some nice free money for the bank, some just provide liquidity in a promoted company, and a lot just arbitrage postions and very very few trade outright positions, or even scalp.

the "experts" on TV are a whole other subject! not really worth going into - although there are a few who i really respect

i dont think the Nasdaq trader u mentioned was a "trader" - he took a few lucky positions that worked out - and thats a 50/50 call - but when he tried to trade full time - he learned the same thing people learn in a casino - if you cant move the odds your way, no matter how much you win in the beginning - in the end - you will lose - but if the wins got him interested in trading, if he keeps trading and has the right mentality, he might turn luck into skill

I have never been on a course, but those who i have chatted to, who have been on a course, seem to say the same thing - he was a really nice guy who gave the course and he said some really interesting things - but if the students are then asked if they are now trading profitiably - the answer is always - no - but none seem to begrudge the money they have "lost" and i wonder if that might show something about whether they will become traders or not - since it is controlling and understanding your losses that make u successful

once someone becomes a trainer, they are not a trader, they become a sales person, and they are selling their courses, and in trading there are some great tricks you can amaze people with - from candlestick patterns, to fibonacci, gann, trend line channels or studies such as rsi, or stochastics - to even the humble sma - but it is also hind sight, and at the end of the day, these are clever party tricks - but do not teach anyone to trade - that is when and when not to take a trade and how to end up with a positive p&l ( trading profit less trading loss and commision).

All there is to learn is out there in books, which you can read for free at the library or any bookstore with a good return policy - and there is a lot there you can learn - but not one book tells you when to take a trade and how to make a profit - and the reason might be the old saying " those who can, do, those who can't, teach"

I suspect that the people you mentioned who had a recognisable style, did know that they were onto something, but did not want to make a big deal about it, in the same way - a magician does not reveal his secrets

I repeat, paper trading - is worth the paper it is written on - and if you bet too little, you will never focus. Maybe you have to blow out your first lump of money to really learn - most have - but with learning comes experience and the money you can make when u really get it right -is so great, it wipes out any lossess a milliion fold

Analysing all trades is key, and as you said, in particular losses. Find out, was it the right trade and therefore an acceptable loss, or was it taken for the wrong reasons.

The key to trading is to keep going, and to learn through your mistakes - you dont learn to be a brain surgeon part time - and a lot of brain surgeons want to be traders - so they can make more and easier money - and they fail, because they think they can learn to trade part time or in a hurry - but i never heard of a trader who wanted to be a brain surgeon, because trading is the best occupation in the universe!

 

[options]

Onceagain,
Kindly contact me by e mail, you can get the address from the members section on the boards.

Cheers

Options

 

[Naz]

Look forward to it payneg01.

Stevet i enjoyed the post.Here are some answers.

I think an important point is having traded your style so much that you know where the stop should be.So i agree about taking stops at the correct level.

I think practice makes perfect so i beleive in small positions whilst learning.Hey you want to stay in the game whilst practicing dont you?

The part time Nasdaq trader worked in the city and had a subconcious style that he didnt realy know he had.They were'nt a few lucky trades,he had almost a 80% win rate day after day.He was a natrual.When he went full time his style didnt work and he suffered.But enough people heard about him and because he was in his early twenties he was snapped up by a company CEO that i know, and given a full time trading job on another market.

I still personaly sometimes look for his style of trades and think of him every time it works.The difference from him and i was that he was young and had balls of steel.

Many of these people did not know they were on to something and didnt make to much of it.

There are so many people out there trying to trade that even though some of us are aggressive and think paper trading is not on.We have to remember that everyone out there has different feelings and if it helps them ease slowly in whilst still nervous then i think its worth while.

Lastly i'll talk about trainers!

I used to think the same as most traders.Hey that guy is only a trainer because he is running a business and dosnt trade any more.I do 10 days a year with a city training firm that has 5 instructors.Wow those guys are good.Not traders! You must be kidding.Even the CEO is one hell of a trader,making five figures in a day when i've been with him.Some people enjoy giving something back and believe passionately about their subject.It therfore is not unreasonable to pay them for their services.However i suppose there will always be some around who bring the business ito dispripute,which of course is a shame.

On your point about some amazing tricks with candlesticks,gann,trend lines,etc,etc. All this is technical analysis and it is easy to show things after the fact with t/a.
The great thing about my style of trading (Nasdaq level 2 direct access) is that it only realy comes alive when you demo it in real time.Then it realy blows traders socks off.If you dont know your stuff then you'd realy be shown up.

This is how suprise t/a players.Walk into a room with over 100 students from one of the largest t/a training companies in the world.They suprise you by turning on live Nasdaq level 2 direct access on a screen behind you and say.We here this is so great.Show us live.So you do and they are driven to absolute silence.They all look at each other in amazement.10 of those people are now my friends and are full time level 2 Nasdaq traders.

 

[stevet]

Naz

People do develop styles, but although it might be safer to have a trailing stop when trading a lunchtime period for example, in normal trading hours at the open and close, the stops are in stone - there isn't any trader input

Most trading is about taking out other peoples stops to gain a few free points, so you need to know the real stops so you dont get chopped yourself and then you can play with other peoples stops

Paper trading is a total waste of time as is back testing, and of course you need to bet at a rate that keeps you in the game while you learn - but there is so much to learn and all of it viable at one time or another - that rookies are constantly thinking there are onto something and increasing their bet, so my point is that the only way someone will learn is to hurt their wallet and then they will concentrate on learining and not trying to hit the jackpot - you need to keep winning in an ongoing, plodding methodical style and the big bucks will follow

If the part time Nasddaq trader was a "trader" he would probably not having been making the 100%, and nor would be have got burned as you described

He was playing momentum game, and he did not have the experience to do it on an on-going basis. The reason he got his postions was because he was riding a wave with other amateurs, and they were all trading on each others backs - when the **** hit the fan, the professionals picked up the pieces, and put the amateurs money in their pocket

Doubling your money is no big deal, you can do it on the even chances in a casino, and there is only 1.25 over the 50 chance of losing - and there is no tax on your winnings - better than most investments - but if you win and keep playing, sooner or later the odds will get you - sounds like momentum Nasdaq traders to me!

There are very few traders - trading markets - as i said before - there are a lot of traders who just keep the whole machine ticking over - normally traders are only hired on consistency - and consistency is a five year winning record

No company is looking for the guy who shoots for 100% a day, they all want someone who just plods along making a reasonable and low percentage, because they are more worried about losing money, than making it

I bet your friend, the company CEO, got burned on this guy

The difference for him was not that he had balls of steel, the difference was that he was clueless and was riding a once in a lifetime wave, that in the end took him and his balls of steel under

Trading momentum was a great game when the moves kept on going - day in, day out - but those days are just a distant wet dream

Anyone who charges for training - is a salesman - not a trainer, and not a trader

There are traders out there who will train people, but they do it because they are going to finance the people's trading and then take a cut

If someone wants to give something back and believes passionately about their subject, they should do it for nothing - end of story

To be frank, i am not sure what you mean by level 2, i know a lot of people suggest that level 2 is going to make you money, but its just a way of seeing the possible order book, and those orders can appear an disapear just as savvy market people choose and i know that most in the US who felt they were great traders - trading off level 2 - have now learned they were just trading momentum and are just hanging in there and losing money - in the hope the good old days will return - but they wont in the next 10 years for sure.

But if you understand markets, have the trader mentallity and know how the game is played - you will always make money - but you may need to move out of stock markets and into currencies or commodities in the next couple of years - to keep earning a living

 

[Naz]

Stevet

I enjoy reading your comments and your forthright attitude although i must say i disagree with a certain amount of what you write.I'm sorry you say "To be frank,i'm not sure what you mean about level 2".Because trading Nasdaq level 2 is my style of trading.

However rather than talk in circles.Many of us on the bb believe in our own style of trading and and post articles,charts and trades for others to read for free.It would realy be interesting if you might think about doing the same either on your own thread or maybe on the market chat thread.

 

[stevet]

Naz.

I am not negative to Nasday level 2 - what i meant was that nasdaq level 2 is not a trading methodolgy or style, its a way of seeing the depth of market in nasdaq stocks - so what i meant was, that i was not sure why you seem to use it as a way to describe your trading - so it was more of a question than a statement

I am not sure what value posting charts etc is, since what most traders are most interested in is - at what point do i enter the market and at what point do i exit, preferably with a profit, and if you could get that from seeing historic charts or even articles - i guess all the funds would be making money and all the pension money would not have been thrown away by the funds

but, like you, i am real keen to hear of others trading styles and interests, and i hoped my direct and hopefully unambiguous comments were my contribution to the frey

 

[tradingintime]

Neil,

Thanks for the web site. A number of the links were good and I bought 2 books off Global Investor. Can anyone recommend a book on CFD,s? The comments on the site were good also.

options,

Thanks for you help.



As was mentioned in other posts that training is available I would appreciate anyone that would email me and let me know when and where with anything that could help me.

I have had a number of CD,s and these have been from ClickEvents which have started me off in the right direction but now I need more.

I have stopped trading for the last 4 months as nothing would have been left by now if I kept following broker advice (I know it was my fault in following it).

Thanks for a great site and all your comments.

 

[stevet]

onceagain

if brokers could trade, they would be traders, but ironically they see their clients lose so much money, brokers are more afraid of trading than anyone else, but as brokers pay is based on the commision they generate, they seem to find it hard not to give advice!!!

CFDs are just the same as shares, except you can go short and dont pay stamp duty, so there is no specific need to learn about them. Trading shares is a good way to lose money, but if you can make money trading shares, CFDs are probably a good way to do it ( most CFD clients lose money, but so do most retail share buyers)

 

[raider1]

onceagain



if you want to start with the US markets, trader emini S&P futures contracts, but you maybe better off trading the FTSE to start with, and even better for you would be the Eurostox 50

 

[Hughmac]

this site will allow you to practise spreadbettig using "virtual" money.

tradindex.com.

cheers

Hugh