Trading Strategies

[clarevmason]

Hi, I am totally new to trading - in fact so far all I have done is read about it. I went to a free Traders University seminar and it really intrigued me. I receive endless adverts through the post about different strategies and programs you can buy and I must say I am very tempted. But...I am being cautious. Every review I read seems to be contradictory and certainly on this site the general feeling seems to be stay well clear. But...how else do I start? It feels like I can read forever, but still not know how to get started. Most of these strategies give you access to their website which filters through hundreds of charts to find the right triggers. Is this the case? Can it be done without these packages? Or are there any programs that can be recommended? Foolproof Earlybird, Traders University, Illuminati, Vince Stanzione?
Thanks...Clare

 

[grantx]

Clare,

No it isn't the case, and don't pay for any courses. All the info you need - and more - is available from books, and expertise on T2W and numerous other sites for the asking.

First you need to establish what your priniple interest is - stocks, fx, futures , options, synthetic quasi-convertibles arbitrage, etc.

Books and the web are your keys.

Grant.

 

[nine]

Clare,

You will find a great deal of cynicism about such programs here. And most of it is justified. But something you need to know is that trading, though simple, is not easy.

My recommendation to you is to do this:
- get a copy of Douglas's Trading in the Zone and read it so that you get a feel for what you're up against.
- search this site for material on developing a trading plan (you will find a thread of similar name)
- read trader_dante's thread, the 3 ducks thread, and MP1640's thread for some good ideas that you could use as the basis of your trading plan. Obviously you will need to select one

Good luck and good trading,
Nine


PS. I note Grant replied first; his points also need considering.

 

[Chorlton]

Hi, I am totally new to trading - in fact so far all I have done is read about it. I went to a free Traders University seminar and it really intrigued me. I receive endless adverts through the post about different strategies and programs you can buy and I must say I am very tempted. But...I am being cautious. Every review I read seems to be contradictory and certainly on this site the general feeling seems to be stay well clear. But...how else do I start? It feels like I can read forever, but still not know how to get started. Most of these strategies give you access to their website which filters through hundreds of charts to find the right triggers. Is this the case? Can it be done without these packages? Or are there any programs that can be recommended? Foolproof Earlybird, Traders University, Illuminati, Vince Stanzione?
Thanks...Clare

Hello Clare,

Both Grant and Nine offer some very good advice.

In addition to their comments:

1. Before you dive to deeply into looking at strategies, sit down and decide what you want to achieve from all this and what criteria your own strategy should have. Also look at your own personality. For example, what is your own altitude to risk, how often do you want to trade, etc etc. These answers will help steer you naturally towards the right strategy for you.

As an example, are you able to watch & study the markets each night or do you currently have other plans in your life. If the answer is the latter, then maybe you should look to trade a longer timeframe such as weekly / monthly. Most newbies immediately jump into studying EOD charts as they are the most popular. This is not always the correct choice IMO.

2. Once you have decided on what you would like to trade, try to focus on one idea which you can use for the foundations of your strategy (Trending, Pattern Based, Mean-Reversion, etc) and try to stick to it.

3. If you can resist the urge to look at Indicators, please do so. Instead try to gain a real understanding of what drives prices higher and lower. Indicators do have their place in a strategy but only once you understand what they are representing. IMO you will speed up your own proficiency as a trader if you can follow this point.

4. Understand Risk. There is plenty of good information on this site as well as some very good books on the subject.
Its not the most exciting of topics but if you can really take the time to learn this area of trading you will be streets ahead of most other newbies.

5. Whatever you decide to focus on, ensure you enjoy it. There will be many many times when you will get very frustrated. Unless you have a real passion or enjoyment for what you are doing, you will not continue through these hard times and ultimately reap the rewards.


All IMO,

Good Luck,

Chorlton

 

[grantx]

Clare,

Chorlton's point 3 is excellent - first time I've seen this recommendation but it's fundamental; indicators will only confuse - you will be trying reconcile too many possibly conflicting. But if I may presume to add to this point, study basic support/resistance and trendlines.

Ditto point 4. Again, to add, decide how much trading capital you have.

Grant.

 

[TheBramble]

Clare, on a more serious note and to add to the good stuff already posted…

Don’t buy ANY systems (ever) – they are unlikely to be selling the Goose that lays the golden eggs. Would you?

Don’t buy ANY books (just yet). Too many and you can overload really easily with texts, most of which (with some major exceptions) regurgitate the same old stale stuff that may have worked at one time, but increasingly doesn’t now.

More importantly, decide why you want to trade. Intellectual interest? Small-scale but proactive personal investing? For a living? The latter is not the way to go and rarely meets its aims for anyone’s first foray into the markets.

Determine what totally free and available funds you’re willing to invest in the endeavour.

Play around with a few demo accounts on different instruments to see which ‘feel’ the easiest to follow and potentially trade.

Stick with the basics: Trends, Support & Resistance etc.

Search this site for everything you can on Risk and Money Management – the trick is to stay in the game in the beginning, not to make a killing.

Enjoy the good advice and good humoured, witty, intelligent and articulate posts by most members on this site.

 

[clarevmason]

Thanks to all for the advice. There certainly is alot to get your head around. But I will persevere.

 

[shadowninja]

Lots of very good advice. Play with a demo system and see how easily you would have lost real money.

 

[fibonelli]

Hi Clare,

Here's my input.

Your learning needs to be in two parts namely (i) chart analysis and (ii) trading psychology.

1. Chart Analysis
To begin with
Read - Essential Technical Analysis: Tools and Techniques to Spot Market Trends
By: Stevens, Leigh

Web - Go through traderpedia on this site, visit incrediblecharts.com, stockcharts.com, sign up to the free charting service at ProRealTime.com
Courses - Attend free seminars only (DO NOT PAY FOR ANY COURSES)
Videos - There are tons of free trading videos on YouTube

2. Trading Psychology
To begin with
Read - Mark Douglas The Disciplined Trader and Trading in the Zone
Web - visit brettsteenbarger.com

Whilst you are learning, you will be able to think about what method(s) you are most comfortable with, what instruments you wish to trade and what timeframe(s) you are comfortable trading on.

You should then write a trading plan. Then demo test your method. If you're consistently following your rules of your method and are overall increasing your demo capital. Open a live a/c that you are able to risk tiny amounts of capital on trades (less than 0.5% of a/c).

Good luck

Fibonelli

 

[apmf]

Very informative.. thanks a lot.