I wanna be a day trader

[wasp]

Whilst answering another tread in such a vain, I figured as most who visit T2W day trading website as newbies want to be just that, a singular thread for this subject makes sense. (sticky perhaps?).

Here is my response from the other thread and another members view also (who also knows what he is talking about but just has a different approach.) Each to their own. Hope you don't mind me copying this over here Grant.

There is no definitive right way but there are plenty of wrong ways IMO. My belief is nothing teaches like your own experience and not a book, website or course will make you a succesful trader, only you can do that.

Screen time. Hours and hours and hours of screen time. Couple of years should do it.

Did Bruce Lee wake up and walk onto a film set and start kicking everyone's ass?
Did Jimi Hendrix write Voodoo Chile at 12?
Was Federer No. 1 from the first day he picked up a tennis racket?

Even some of the greats 'here' lost 000's and more and took years.

Experience and time is the greatest teacher. IMO.

Oi!

My answer I would give to anyone, and do, that wishes to venture down the road of day/swing trading and feel it is the best approach and gave the OP the best answer I feel appropriate! It may not have been the one he hoped for but thats the harsh truth, nothing teaches like experience.

I just noted Dave you did take notice of my post. Well, to add, I would say DO NOT read anything and I would go straight for the screen time. Download WHC metatrader via I think, fastonlinetrading.com. (google it) It has FX, commodities, stocks and futures. Oil, metals, grains and everything else in real time for free. Watch and learn, see where it reacts. Books breed the herd. The herd invaribly loses. Don't be part of it.

Dave,

Read all the financial/market reports daily - WSJ.com, Reuters.com, Bloomberg.com, IHT.com, etc. Especailly read the economic releases reports and their affects on the markets. And read all markets - equities, bonds, fx to appreciate that one class rarely moves indepently. If you did this every day for a year, you'll be an expert and able to make more informed decisions.

Grant.

Hi Dave,
Welcome to T2W.
I'm sorry you feel the response to your thread has fallen short of what you hoped for and / or expected. The reason for this is, I suspect, the inference that you've not done any elementary research. For example, have you:
1. Read all the FAQ's. These are designed specifically with new members such as your good self in mind.
2. Had a really good rummage around the First Steps forum?
3. Studied the articles in the Knowledge Lab' (under 'Articles' in the red headline menu).
4. Bought Rhody Trader's book. (His comment to study one market is VERY sound advice btw. If that's all you take away from this thread - it will have been worth your time and trouble starting it).
You get the general idea. The more effort you make, the more effort other members will make trying to help you.
Enjoy!
Tim.

Hope this serves a central thread for all those who have no idea where to start.

 

[Aspire]

I voted for a bit of everything but only because there wasn't a button for a lot of everything... but personally I think that in terms of hours spent it's screen time, screen time, screen time.

Also there's a difference between quality screen time and lazy screen time. If you sit in front of the screen watching and thinking someday it will click then it will take a hell of a long time if it happens at all. I think you've got to be constantly thinking about what's going on and why and how it relates to everything you've read/learned etc for it to be worth doing.

I also reckon one of the most important things in learning to trade is proper self evaluation. Thinking about what your doing right and wrong, what you should do more of and what you need to impove. Every trade you make is entirely your responsibility and although it is nice to blame the markets when things go wrong it is critical that you accept responsibility and have a good think about what you did and how you could have done it better even if the conclusion you come to is that you did the right thing but just lost money this time.

 

[0007]

I voted for a bit of everything because I believe you really do need to expose yourself (heaven forbid!) to all the options in order to get a broad idea of what it's all about. After all of that, and many blind alleys, and many styles that don't suit you, and many styles you don't suit, and lots and lots of thinking and reasoning you eventually find what works for you. And then you can start trading (or whatever you want to call it depending on your "class" of broker ) and find out if any of the foregoing was relevant! Then the really hard work can start with examination and debrief of all your trades and working on exits and entries etc etc - it goes on and on and little by little you begin to understand.

I suppose you can call all that above, experience. So maybe experience is the best teacher after all. She certainly don't pull no punches!

 

[grantx]

Wasp,

Don't mind at all, mate.

Grant.

 

[nine]

I think this is an important topic Wasp. I also think that those of us who've been in the game forget what we did along the way or maybe don't realize that some of it was more important than we realize. That makes me doubt whether any form of experience, alone, is enough. I think its needed but not enough (unless one is a market genius).

My thinking mixes a bunch of things together:
- it is important to understand how markets move and also to understand that there are differences between them although at the level of key factors (support and resistance, trends, exhaustion, consolidation) they will be very similar.
- one can damage oneself if one puts money on ones opinions too early (your observations close down when fear and greed start to play) and maybe one shouldn't even speculate on the direction too much too early. by perhaps saying "it seems like it will (but I dont KNOW)" one can see how well ones ideas are matching what happens without getting attached to a result.
- it helps to have a framework to understand the markets while one is studying and its really important that you start with one that is undeniably true. thats because we are pattern recognizers and if you start with an untrue framework you will still see patterns that match it. to me that says you should start simple without too much potential confusing stuff so
- - no fibs or pivots to start with
- - no rsis, ccis, stochs etc .... at most one moving average and nothing tricky, just an ema or sma to help you build a feeling for "trend" and maybe how price retraces, consolidates, and then progresses with "trend"
- i think wyckoff material is a good place to start with or without volume (no volume on forex please) to get an idea of how the market moves through phases and tests support and resistance.

So, some training please to give a framework for your screentime. Go with the oldest most proven by the test of time, Wyckoff. Nothing complex and no indicators except maybe a single boring old moving average. Draw some trendlines and channels on the charts as you start to think you're understanding what's happening and see if they help or hinder.


Note: I did all of the indicator stuff as part of my learning and really wish I'd spent more time on the "basics."

 

[wildkactus]

I voted a bit of everything,
As I see it, if you just have the screen time alone what do you look for, You may or may not get what to look for. But with the help of others (like a coach to a sports star) you will learn what to look for more easily and quicker, and then this Skill set can be perfected with lots of practice (screen time)

Everyone that is good at something has had some sort of coaching, weather that be books, a mentor / coach, forums, etc. It is very hard to go it alone especially if you want to be a success.

 

[timsk]

There is no definitive right way but there are plenty of wrong ways IMO. My belief is nothing teaches like your own experience and not a book, website or course will make you a succesful trader, only you can do that.

Good idea wasp.
I voted for a bit of everything too, although 'experience' has to be the most important of the lot. Day trading is a bit like driving. Most of us have a pretty good idea of what driving entails long before we get behind the wheel of a car for the first time. But, when that time comes, and you're out on a proper road (as opposed to the back end of an industrial estate on a Sunday morning), it's a whole different ballgame. You've got to look forwards, backwards, steer, indicate, change gear and use two pedals pretty much simultaneously. The difference between looking at a chart in hindsight when the market has closed and saying 'I'd have entered here and exited there' and real live trading is akin to the difference between being a passenger in a car as opposed to the one behind the wheel. That said, forums like this one, books and courses all help IMO and, I for one, will continue to use all three to facilitate my development as a trader.
Tim.

 

[timsk]

I note that mr. marcus is viewing this thread - hiya mate, hows it hangin'?
As you voted for the books and courses option, I'm sure I'm not the only one who'd be interested to know what your recommendations are. Also, I'm slightly surprised at the rep' you gave to nine - not because his post was anything other than excellent (as usual) - but because of his emphasis on Wyckoff. As you (sadly) no longer post directly on the forum, I guess these questions will go unanswered!
Anyway, hope all is well with you.
Apologies to wasp for the off topic post.
Tim.

 

[wasp]

instead of buying a book or asking things on a website, why dont you just go to an auction?

the higher the stakes on the asset the better, you will learn more. see the fear of the seller, see the greed of the buyer.....you will learn more there than in google, than in a website, or than in your economics degree

I think this is a brilliant analogy.

If you then imagined 1000000 lots instead of 1 so if the price reached a high and only 10 sold and then the auctioneer lowered the price as buying stopped at the high, found a lower level where buyers came in etc....

A good thing to imagine when you watch a chart and wonder what you are looking for/at?

 

[Vaco]

There isn't an opton for what I think is the st important thing...

A passion for he markets, so many people turn to trading because they think its a way out of the rat race a road to millions. How my of those people would still care to look at a chart of the dow if they were not planning to try and make money out of it.

If you re not passionate about it then it becomes no better the the rat race, it in fact becomes worse you will most likely be trading at home alone, you will get bored and that will be followed by lossing money.

Most important thing is that watching charts puts a smile your face, if this is true the money will follow

If your chasing the money it will only lead to bad decisions

 

[nine]

A note that Mr Marcus was not actually repping the post for the Wyckoff reference as he (correctly) believes that W wrote about markets in a time when the auction process was very different to the current process. I agree with that but find that the principles of analysing the market with that process in mind, with tests, retests etc and thinking about who's in the market and how they will be able to benefit provides a good framework for my trading.

I note that I trade 2 markets with 3 markets in reserve and the framework plays out differently in each - same way of thinking about how I will enter and exit trades but tweaked a bit differently because the participants are different in each and don't always play nicely. Its not that Wyckoff is a perfect match ... its more that it comes closer to providing an insight than anything else I've seen written formally.

 

[barjon]

For my two-penny-worth I think you need to know a little about a lot and a helluva lot about a little.

Most of the "helluva lot" comes from experience. You need a deep understanding of the instrument(s) of your choice and its associated price action/patterns. There is a lot of commonality between instruments, but each has its own important characteristics that are learned by immersing yourself in it over a long period of time.

I trade a stable of ftse100 shares and I know them intimately. Using a very simple example of a shooting star type daily candle, I know the ones where that sort of price action is commonplace and almost meaningless and the ones where it is significant and to be acted upon.

All imo, of course!

good trading

jon

 

[Crap Buddist]

Failing is a good teacher if a good teacher isn't available/unwilling to tutuor.. well ok by its definition, failing means we have not perhaps done(acted actioned or not) something suitable for the environment in which we choose to engage. So from the failing or negative result we have the opportunity to learn.

Theres no such thing as failure only feedback...... thats a corporate slogan to encourage bods to embrace progress through learning from failing in a nice open touchy feely kinda way

now what about failure rates. Why is it so high? Considering theres no such thing of course, then it has to be people dont want to learn about subject under study, if they did, they would continue on, drive forward regardless...? stopping the "open to learning" would not be an option, unless it was chosen.

So do people who give up the learning process of trading do so because they REALLY dont want to pursue it for themselves ?

 

[rnicoll]

now what about failure rates. Why is it so high? Considering theres no such thing of course, then it has to be people dont want to learn about subject under study, if they did, they would continue on, drive forward regardless...? stopping the "open to learning" would not be an option, unless it was chosen.

So do people who give up the learning process of trading do so because they REALLY dont want to pursue it for themselves ?

I think a lot of people (I certainly did) look at the stock market as an easy way of making money. It looks simple enough; find a company that looks good, buy its shares, profit. Or if you look at short-term charts, the tendency to form patterns that seem obvious in retrospect can be incredibly tempting. When it turns out that, as with many things, you can be easily looking at years to do it, and a lot of expensive/painful/frustrating lessons before you do, I think a lot of people just go back to playing the lottery

 

[rnicoll]

What always bothers me, while reading books/advice generally, is the lack of explanations. This goes doubly for indicators, where if you're lucky you'll get an explanation of how it's calculated.

I think the most important bit of advice I can give is that if it works for you, stick with it. Position, swing or day trade depending on which works best. Mix two if you can figure out how (I did that for a while, looking for the same trends on two charts so that if day-trade timescales failed me, I had swing to fall back on). Don't be afraid to paper-trade things that people tell you are a terrible idea (mixing timescales, catching daggers, etc.). While it's unlikely you'll figure something that hasn't been tried and failed, it's good to try.

Indicators are very much personal taste. A lot of people swear by MACD because it's nice and easy to understand what's going on. Stochastics are popular, but I prefer Bollinger Bands. Don't be afraid to try weirder stuff like the Ichimoku Kinko Hyo; if it works, go with it. If you prefer to read the chart by eye and ignore indicators, that's also a perfectly valid option.

Summary: think for yourself, try everything, stick with what works.

 

[Crap Buddist]

I think a lot of people (I certainly did) look at the stock market as an easy way of making money. It looks simple enough; find a company that looks good, buy its shares, profit. Or if you look at short-term charts, the tendency to form patterns that seem obvious in retrospect can be incredibly tempting. When it turns out that, as with many things, you can be easily looking at years to do it, and a lot of expensive/painful/frustrating lessons before you do, I think a lot of people just go back to playing the lottery

mm yah I went to edit my previous post , but left it what i was going to type was this...

What I thinks going on is that people are being sold with the monetary by-product side of trading rather encourage to learn the profession of it. But outside city firms where does one learn? people will stumble into the buzzwords and get drawn in, some people will then regardless of the by-product, will want to strudy the subject, that will be the key driver....

So maybe what it needs ,whatever it is, is some sort of careers (or even life ) suitability check, do people really want to trade ? or do people just want money ? now on this site with all the ads ? Those ads all sell the by-product side rather than the profession side.. would that be right ? so thats whats wrong, if it is wrong.....

Further ,people could turn their money over to managers ,?? but if people want to learn trading.....

Maybe thats another one

If you had to give one up Money or Trading what would people choose ?

 

[Crap Buddist]

What always bothers me, while reading books/advice generally, is the lack of explanations. This goes doubly for indicators, where if you're lucky you'll get an explanation of how it's calculated.

mmm yeah, idid a post earlier replying to a thread about what good can all these indicators do for short term trading Naz, dow s n p, but my mozilla IE froze and dropped off and I typed a wee bit !!!! then it vanished.......

anyway, I thought they might indicate underlying speculation (as opposed to indicating Fundamental value of the tangible asset) valuation cycles , I believe Price will dictate product, hence often opposite reaction to FA news ... Seems like a fair theory too, what with the Speculation Money whipping (short term at least) the Actual ...

And trying to get towards some point with the construction of the indicators, on what logic have they been constructed.Price(speculation) Logic or Product Logic. Or Just Data Logic. At this point my eyes glaze over and I tend to reach for a cold one out of the fridge...... I dont even know if its a valid way to bracket them either...

 

[Vaco]

There is good reason to trade off of indicators if you are new to this.

strict application will prevent over trading in most cases.

they draw a line in the sand telling you when to buy/sell

good money management and stop loss management will ensure you end up in the green rather then the red in the long term.

 

[wasp]

There is good reason to trade off of indicators if you are new to this.

strict application will prevent over trading in most cases.

they draw a line in the sand telling you when to buy/sell

good money management and stop loss management will ensure you end up in the green rather then the red in the long term.

Indicators are like stabilizers. They may keep you upright for a little while but if you really want to learn, you have to take them off.

 

[Jaydee]

Failing is a good teacher if a good teacher isn't available/unwilling to tutuor..

I also think failing is a good teacher. In the early stages as a trader, I used to take my winning trades for granted (whether they were good or not) - it was only the losing trades I would evaluate. Pretty silly really but I think it's human nature to expect good things to happen and consequently ignore them because we feel we deserve them.

As for indicators, I don't really use any anymore. I think they can be useful to get a consistant setup and, therefore, help provide consistant results for evaluation (whether they may be good or bad). However, I don't believe they can tell you anymore than what you can already see.

I use support and resistance a lot and watch order flow, with a little bit of macro economics to boot. After that, it's mainly risk and money management and growing a pair between your legs.