As the title says beginner here, just found the forums a few days ago. I have developed an interest in trading over the past couple of weeks and have spent that time reading this and a couple of other fourms and have begun reading some recommended books.
I am beginning to develop an idea in my head as to what to do. Research and develop a trading plan for a few months. Use a practice account and test and adjust the plan accordingly. When you have something on paper that works move to real money, only risking 1-2% of the money available. Stick to the plan and do not deviate, and dont let emotions get in the way.
I know it is no where near this simple. its just a rough idea that i have in my head from what i have read thus far.
I have full time job and saw trading as something i could do in my spare time rather than wasste it playing computer games and a way to boost my income long term. i dont expect to make a profit in my first 3-4 years, i just want to learn and begin to understand my chosen market and hopefully break even with correct risk management and being fully prepared before launching myself into using real money.
So my problem and the reason i would like other peoples opinions is this:
I have very little starting capital ($1000) and no prior knowledge in finance. The reason i developed an interest is that im a IT guy by trade and while browsing the internet saw a course on programming trading bots (i now know not to trust such claims and developing myself is the way to go).
Yesterday i spent most my time looking back at previous posts with either $500, $1000 or beginner in the title and i must say most if not all were very negative ( im not saying that's bad, it could be my saving grace) most state that you are better just spending the money as $1000 will get you no where. The few positive posts pointed me in the direction of spread betting as a swing trader to reduce commissions and do not expect to make any profit.
So my question to the current users that are browsing this forum is what would you suggest to someone like myself. Whichever way the consensus leans will guide me either towards or away from trading as a future.
I apologise for the long post and thank you in advance for any advice or opinions. They are all very much appreciated, positive and negative!
Keep studying, Keep practicing, (lots of free platform trials out there), and KEEP Saving money.
Also, If you let other people discourage you from trading then you may not have enough passion or interest to continue. If you are really into the idea of trading then you have plenty of time to learn while you are saving risk capital. Just my opinion but I doubt there is any instant gratification in trading. Some of the best traders on this forum tell stories of blowing out several accounts before they became profitable. i put in a year and a half of dedicated reading and simulating and i am not profitable. I do have a passion for it though and will not give up. I think I can see light at the end of the pullback.....I mean tunnel.
1000 is no where near enough to start. If you are intent on starting to trade with a small account maybe think about saving at least 2500g's and trading FX micros. You can do it for less than that but the smaller your account the harder it is to trade. I can attest to that.
There are lots of great threads here that will get you going but in the beggining, you should spend lots of time reading "Investopedia" and building your vocabulary(instruments, charting, technicals, fundementals, stories about traders,brokers, different techniques....the list goes on....... Plus read books and search the internet diigently. My trading vocab is fair but I am still challenged daily on this thread to do more research. The one thing I have going for me is that I enjoy learning about trading. Its all about you and your drive and your patience and your appetite for risk.
"Napoleans severest comment on his beaten enemies - that they "saw to many things at once""- Hart
The following user says Thank You to bourgeois pig for this post:
Absolutely agree with largely everything Bourgeois Pig says above.
I am also a recently ex-IT guy myself, 20 years between chair and keyboard, early 40s now and took a very similar view to you on initial investigations of futures etc last March. I had some knowledge of stocks and though really a 'beginner' in Futures I put down intermediate due to this. I'm probably safely intermediate by now though as I'm profitable.
Learn price action, swing concepts, dev a bot for high probability trades I spotted etc. so it would really force me to understand the underlying mechanics. It sort of worked..well it did work (I am making very decent money since I went live in August) but it was mentally painful, one has to plan for no 'luck' and its full time work.
My lessons learned list is huge e.g.
a. I would not start with Ninjatrader 7 again (8 shows promise but its seriously delayed). NT is ok for manual trades but almost perversely rubbish for moderately sophisticated bot development. The dog has fleas like you have never seen and these are shockingly time consuming. I'll admit at one stage I felt NT support were intentionally trying to screw with anyone who was not one of their tiny number of certified developers (thats a grimace of a smile).
b. I changed tack to manual with knowledge gained from bots and got out of the initially attractive scalping 'noise' on minute or 610/233 tick type charts quickly. I then worked down (to more frequent opportunities) rather than up in scale. I now trade anything that looks ok to me down to 89 tick etc. Top down learning swing/large chart intraday is in retrospect the safer approach.
I.T. gives you a useful skills with wrangling complexity but while your well ahead of the average person, your dealing with a system evolved to surprise and trick you rather than delay/annoy like simple(ish) IT problems.
I agree, you may as well hold the 1k capital and continue saving while practicing on SIM. Whenever you have a solid month of profitable (and I mean just a few breakeven days at worst) spreadsheets/journals maybe scratch the itch with micro contracts.
The following user says Thank You to Rory for this post:
Thank you all for the replies to this thread. Its nice to see a more positive outlook on trading in general and good to see that hard work is paying off for you all.
A couple of your points made me really sit back and think about my choice of entering trading.
I've thought about this in some depth, and still am. It does question my interest for trading but i think that because it is still quite new in my head im not entirely sure myself if it is a fleeting interest or a genuine passion. I would like to think when i start paper trading i will really know one way or the other.
Your post gives me a lot of hope. I what you say confirms what i have also been reading that manual trading seems to be the way to go when trying to learn the trade.
I understand if you would rather keep it to yourself, but what platform did you end up working with. I have seen many positive reviews of NinjaTrader but all from a manual perspective.
I have read that elite membership is essential and a great deal of essential advice can be found, especially for someone new like me and i dont think it will be many more days before i pick it up.
So i think having read these replies i know where my doubt lies. I really do only have $1000 and being in the position i am in financially right now i don't see myself being able to save up more for a good 4-5 years. This is why i asked in my original post if i could make it with this sum of money, not to make vast sums of profit, but to break even. Otherwise i could start researching and paper trading now but my motivation would be a little lacking knowing that i wont be able to practice what i test for a good few years.
I don't want to take out loans or anything like that as it is asking for trouble, especially if i blow it all as many seem to with their first foray into the trading market (and before you ask, I can genuinely use this $1000 without and financial consequences on my life, I would not risk it if that were the case)
Again thank you for the replies and appreciate any more input on the subject
Hi Boggot, I'm using Ninjatrader still for my sins. It is perfectly good for learning or ordinary manual trading but its an aged architecture now, the multithreading etc. is poor so it can be unstable or at least irritating when you need to push the boat out a bit. Its the most extensible of course but much of this is driven by perceived deficiencies people sought to remediate (a familiar story in I.T. of course).
Everything in buggy code can be fixed naturally but time is valuable and there is a lot of (unnecessary?) ugly stuff say in unmanaged bot code / multi-timeframe architecture and backtesting...an evil tar pit everyone goes through with bots. I'm not trying to over mention bots, just I figure that you being in I.T. would lean (like I did) to poke around there fairly soon and as you mentioned coding them. I have simply had the nagging feeling that I would have been better off with maybe Metatrader .NET considering what I wanted to initially achieve but thats me. Maybe it just seems to me that the MT guys complain less about fundamental stuff?
NT is just fine/more affordable to begin trading with manually though and that is where you need to start as you already gathered. Your issue is I understand: will interest be sustainable, can you afford it and even doing everything properly will you find in a year you learned a lot but...
Cory's suggestion regarding the order flow learning approach is appealing to me (if I was to advise myself starting off). With typical beginner chart trading / price action systems etc. you get caught up in a thousand options/indicator meltdown and easily miss the fundamental understanding of how money flows when robotically following trade setups & best practice 'rules'.
DOM/Order book trading is (I think?) a significantly smaller universe to assimilate though maybe visually unappealing, there are foundation lessons learned there you will have to know soon enough to achieve profitability.
If you do look at NT, feel free to PM me sometime. I had stability glitches to resolve with CQG data to Chicago (some start with this on monthly trial over NT's integrated out-of-hours only Kinetick) from my Wiltshire based ISP and as your in nearby Truro it could save some effort.
Last edited by Rory; January 5th, 2015 at 02:47 PM.
Reason: Corrected Continuum to Kinetick.
The following user says Thank You to Rory for this post:
Thanks again for all your advice Rory. It is much appreciated. I have begun thinking that perhaps spread betting Forex is a good place to start due to its low barrier of entry. I also found a course on Udemy about setting up a Bot using Metatrader4 i have taken a quick look through, signed up to a FXCM demo account etc.
Still despite how tempting it may be i know manual trading is the way forward for me right now. Going to sign up to elite membership in the next few days and follow the plans there and churn through some recommended books. Reading the updated (2014) version of "Trading for a living" which seems as good a place as any for a beginner. So hopefully a few months down the line i will have written up a trading plan and be ready to paper trade
Fingers crossed Boggot, its mind expanding stuff and least a good way to achieve even finer self-awareness.
I however just spotted I made a typo that I can't edit now (time limit on amending posts)..
Instead of Metatrader (space) .Net it should have read Metatrader orMultiCharts.NET.
My cousin does similar small scale FX on Metatrader and is very happy with it (a programmer, has some bot work done & he likes the web interface as he can trade from work). MultiCharts.NET is the more sophisticated but expensive app that likely surpasses Ninjatrader 7 for my own futures trading needs etc. Hopefully NT8's when is comes is equivalent..live horse and you will get grass .