I agree that it needn't take years. The observation period need take only weeks.
But unless and until the trader knows what he's looking at, he won't know what to look for.
If he doesn't know what to look for, he won't recognize a trading opportunity when it presents itself.
If he doesn't recognize a trading opportunity when it presents itself, he will be making essentially random trades.
This generally does not work out well.
The first step is not to start trading and develop a pattern of losing behavior.
The first step is to understand just what it is that he's looking at, i.e., why does price go up and down, followed by where and when and how. If the trader does not understand why price goes up and down, he will never be able to trade with confidence. If he can't trade with confidence, he will never enjoy consistent success.
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Of observation time? Before beginning to formulate preliminary hypotheses? Yes. It took much longer when I started in the 70s, but that was before computers and digital charts and replay. Nowadays, if one employs replay and is interested only in the first 90-120m, he can go through a week in an evening.
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Hey, wow - thanks all for the great comments so far!
A couple of points I'm hearing is 'download Ninja Trader' and 'everything you need is available for free'...
I installed NT and set up the demo feed. Now I'm staring at some blank pages, so any more specific advice on the basic act of setting up a chart, or making a trade would be most helpful.
In terms of all the free stuff out there, could anyone be more specific? I've already spent 20hrs digging into trading over the past 3 days and would say 80% of that time was a total write-off. I've consumed numerous videos and articles that I've since found out are rubbish, so if I just keep on googling according to my own limited understanding I'm pretty sure I'm destined to waste even more time.
One course I had been considering is Al Brooks Price Action video series. I know it costs, but basically, if its good value and will allow me to spend less time searching and more time learning quality information, then I consider that an effective use of my resources.
Otherwise, are there any particular websites or YouTube channels or whatever else that have good starting points for beginners? Particularly any kind of series, or structured outline to get me started in the right direction... then once I have a framework I will be better informed to start researching and filling in my own gaps.
These questions are deceptively simple. I've known traders who've gone on for years without ever addressing the question of what kind of trader they want to be. An answer -- even a half-baked one -- requires a minimal level of self-examination.
But as for observation, perhaps the most basic question is whether price is moving up or down or sideways. If you can't tell, then you have your work cut out for you.
Price has only two states available to it: trending (moving up or down) and ranging (moving sideways). If you look at a weekly chart of whatever (stockcharts.com or bigcharts.com are good sources), you should find it easy to tell whether it is rising or falling or doing neither. A weekly chart of the NQ, for example, has been rising since June '13. But if you don't want to trade a weekly chart, you'll want to look at a daily, at least. The weekly chart shows you that price is rising. The daily chart also, necessarily, tells you that price is rising. Just not all the time.
So when price stops rising on the daily chart, does it go sideways or does it reverse? Where? How? Under what conditions? How far does this reversal, if any, go? Why? If price is moving sideways (ranging), how long does this last? When price stops ranging, does it leave the range to the upside or the downside? How far does it go? When does it fall back into the range? When does it take off without ever looking back? What are the conditions that define either of these outcomes? How can you take advantage of the "tells" to execute a profitable trade?
These questions will have to be answered eventually. If they are answered at the beginning, the trader saves himself a lot of time and a great deal of money. The longer they are postponed, the more time is wasted, the more money squandered, the more useless information there is to be unlearned. And of course there is the problem of the fear that has by now eroded the trader's confidence.
Incidentally, as you have a 9-5, there's no reason for you to be concerned about real-time streaming charts. Your chief concern is replay. If you have NT downloaded, contact them via email and ask for help in setting it up, particularly the replay function. It's not the most user-friendly interface I've ever seen, but loads of people love it. I'm sure there are threads here that explain how to go about doing what you want to do.
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Free stuff includes most of the webinars on futures.io (formerly BMT), go to your local library and check out virtually any (all) technical analysis books. Or have a coffee at your local bookstore and read them all for free (minus the coffee). This will take you several weeks to get through while at the same time you are also reading through the exhaustively extensive ninjatrader videos and help files freely available that show you in painstaking detail how to get past those blank pages your seeing. Dude, seriously, you need to be able to find, read, and understand the basic help info ninja trader provides for free or honestly your not cut out to do real trading. Absorbing the basics of TA will take an average person a few weeks to 3 months. Understanding NT will take hardly more than a week. All the info to get you started is free. Once you are at a point where you have enough info and you begin sim trading based on the free knowledge you've learned you *should* begin to make your own independent decisions about how to trade. You'll be able to weed out the garbage and focus on what works- for you.
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"I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times, I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life. And that is why I succeed."
- Michael Jordan, 5-Time NBA Most Valuable Player, 6-Time NBA Champion
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I concur with the sentiment that standing idly by is an inefficient means of learning, with a catch - after first observing what does what, then get in there and start experimenting a bit.
We are creatures of the scientific method, it's a natural instinct. Build a rough hypothesis, then test it. Do that over and over until your results match your hypothesis.
Get some skin in the game, but don't sabotage yourself either.
Think of each respective market as a living, breathing organism. Get to know its moods, its temperament, its overall demeanor.
Treat it like a strategy game, like chess - you can eventually figure out what moves your opponent will make, but you can't ever be 100% sure. The trick isn't to figure out what they're going to do right before they do it, but know 5 moves before they do it.
Remember: this game can be fun!
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I opened this thread expecting a lot of hate about someone asking "how to trade" i'm really glad you guys have responded well, and in turn given me, a complete outsider some real things to work over and learn with. Thanks!
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