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How would you start learning futures all over again if you had to?

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Stavanger, Norway
Trading Experience: Intermediate
Platform: NinjaTrader
Broker/Data: Ninjabroker, Continuum
Favorite Futures: ES, CL, Bonds
Posts: 665 since Nov 2012
Thanks: 905 given, 1,791 received

In general:

- Never spend money on "education" (i never did, but i noticed you mentioned Brooks..). If they're selling, its cause they dont make enough money trading. Even if they are legit, a successful trader has found a way that works for them, and replicating that will very seldom work for others so best case scenario is that you pickup some decent general advice, which you could find right here/online if you dig a little and listen to the right people(the ones who usually seem boring). So feel free to learn general stuff you can find free, but find your own way and logic that resonates with you by staring at charts and focus more on what a market actually is and works rather than fancy indicators and complex setups.

For me, personally, my advice to myself would be:

1. Stay away from indicators, spend your time looking at charts with minimal amount of distraction. Stare. Analyse. Look at all the timeframes you can and chop it up until you see the subtle differences. Keep it as simple as possible, the answer is right there in how its moving, swinging up and down. Simple stuff like Donchian channel, MA, or vwaps can be used purely to get a bearing and a relative feel for where price is and context- but never attempt to use as a "green/red light" system where you buy-if-this and sell-if-that. Engulfing candles and emoji doji whamwoji 123 setups etc are fiction. Add 5 minutes to your chart and see if you can find Waldo again.

2. Stay away from small timeframes(anything below 120min). While this turned out very educational to me, i wasted way too much time trying to tame chaos. Approach trading futures the same way you would other investments (you wouldnt buy APPL stocks and hold just for 2 minutes, right?). Big timeframes and stops/targets give you the wiggle room you need and price moves a lot more predictable. Pay attention to monthly, weekly, and daily charts, specifically highs and lows. Consider using hedging instead of stop losses (not emergency stops ofc).

3. Dont bother with All in/All out. Learn to leverage and manage risk with the amount of contracts you add and subtract from a position. Plan on scaling in, then slowly bank profits at natural milestones and prepare to potentially add them on healthy pullbacks and squeeze your winnings(resist the urge to get out too soon). However the key is to protect your money, that doesnt mean 10 tick stoplosses.

4. Ref. 2 and 3 above: Dont trade futures. The leverage and margin req will most likely cause too much pain and lead to bad decisions and huge losses. Stay in SIM until you with a realistic approach can stay green a minimum of 3 months in a row. If you cant resist the urge to lose money (hey, most of us couldnt) then at least use stocks, FX, microfutures(m6E) or as non-volatile and cheap instruments you can (ZF is great) for learning purposes. Futures are the veterans playgrounds, and you should have at least 20-30k to start off with and have little trouble replacing it should you blow up.

Dont use trading to fulfil some craving for action, the more boring you make it the safer it is in general. Volatile instruments like CL and GC have a way of luring beginners into thinking thats where fortunes are made. The opposite is usually the case and those are imo the most unpredictable/hard instruments to trade.

A basket of good funds can fairly safely yield 10-30% returns without you lifting a finger. Make sure you can leverage your agility as a small trader to substantially outperform those figures before placing a live trade.

Took me a good 5 years to beat this into my skull, even tho all the veterans were preaching it. There is a reason for the majority of struggles being focused on small timeframes. How many swing traders do you see struggling or bleeding out?

Just my 2 cents, and they would be meant for myself 5 years ago, not necessarily everyone else in general.

"Hey! I've got 10 fresh apples to sell, any hungry buyers out here today?!" "Maybe! Just let me check my moving average and RSI!"
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Last edited by danielk; December 1st, 2017 at 11:14 AM.
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