Re: T2W First Steps Tips & Tools
Hi Carlos,
Apologies for not replying sooner!
Seems to me that the next phases are
1) Build a strategy (which requires a lot of research I imagine);
2) Learn how (not the when, just the how) to actually enter and exit trades, place the stop-losses etc,
3) Backtest,
3.5) Revise, if necessary
4) Paper trade.
5) If successful at this point, go live incrementally
This looks like a sound approach to me.
Questions:
1) Building a strategy, any good, meaty articles (or preferably Youtube vids) I can watch that guide through the process? Preferably via spreadtrading? I know there's a PDF on here but that talks mostly about the money management side and like I said I want to go for a test drive!! Also, how long does building a strategy typically take for an experienced guy?
It's next to impossible to provide a 'one size fits all' answer to this as there are just too many variables involved. From your earlier post, I'll assume you want to trade equity indices intra day. I'll also assume that when you refer to 'spreadtrading' (quoted above) that you actually mean spread betting? They are two completely different things - not to be muddled up. You can learn about each of them in these two articles:
Spread Trading - Less Risk and Improved Returns by Don Dawson
Spread Betting for Beginners by Dave Baker
I'll further assume that you've read the First Steps stickies and associated FAQs and that you understand what you're trying to achieve, namely, that you're looking to create a positive expectancy. How you set about achieving this is down to you. Most people here use some form of technical analysis - which may or may not utilise technical indicators such as moving averages. Day traders that specialise in trading instruments such as the ES (the S&P 500 e-mini futures contract) often focus on the Depth of Market (DoM) price ladder and Time & Sales - rather than charts and indicators etc. Only you can decide which approach will suit you best. As a starting point, check out these links:
Developing a Trading Strategy by Tim Wreford
Best Threads In The 'Trading Journals' Forum For the most part, the threads listed centre around forex, but most of the principles discussed will apply to trading indices as well.
Is There a Strategy or System that I should Use and where Can I Find it?
Regarding your question about how long it takes to build a strategy - that's akin to asking how long is a piece of string. Not a helpful answer I know, but it would be quite wrong and almost certainly misleading for me to put an average time on it. Furthermore, I should point out that many aspiring traders never achieve it and, of those that do, many find their strategy is successful for a while but then starts to break down as the market changes. Make no mistake, developing a successful trading strategy is not for the faint hearted, the work shy or those after simple cookie cutter holy grail solutions. It's an exceptionally tough gig!
2)I know Americans aren't allowed to spread trade, BUT I will be over there this summer, if log in from there will I be allowed to trade, or do the UK brokerages firewall off any traffic from US IP's even though I'll be a legit client?
I've no idea I'm afraid. As you'll appreciate, I can't advise you to break the law, so you'll have to take advice from the spread betting companies themselves and/or the U.S. tax authorities to see if there's a way around this. If you can't open a U.K. based spread betting account, then the nearest alternative would be to trade CFDs - which you can do from just about anywhere in the world. If you want to know how spread betting and CFDs compare, check out this FAQ:
What are the Pros and Cons of Spread Betting Vs CFDs?
I hope some of the above is of use - good luck!
Tim.
