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Starting to Trade and Getting Education
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Starting to Trade and Getting Education

  #21 (permalink)
Trading Apprentice
Chicago, IL
 
Futures Experience: Advanced
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Stop Question


johny1971 View Post
I see that you got the price action education from Brooks. What about risk management? I tried Tharp, but that seems way ahead of me, given I only trade one contract, so, for instance, position size is settled. Also, I have found, with Brooks, my trade develops the momentum or not. That is, if it doesn't go my way then my stop is hit and if I have 2-3 pt stops I am having bigger losses than winners. Then there is the question of exiting a bad trade or raising stops on a good one. I like the idea of targeted profit, because that gets me out with a profit and then I stay in with a really tight stop to protect that profit.



I am growing ok with initial tight stops (7 ticks max) because 1) I can take a small loss better than a large one and 2) once I am out I can always get back in if a set up is produced. Also, I really like Link's idea that cutting losses, cutting losses, and cutting losses is as key to trading as location, location, location risky to real estate. He says over and over again that preserving precious capital is key and that that focus is what keeps you able to trade another day.



Maybe as my win loss percentage stabilizes I can use bigger initial stops. It seems Brooks teaches principally two methods, stop at the recent low if long and stop at the recent high if short. The other is the stop below the bar prior to entry. I guess I do a combination of these: stop a few ticks below the entry bar or I want to enter when the recent high or low is not more than a few ticks from entry.



Overall, I am seeing how Brooks can work as for my first 31 ES sim trades I am up 44 ticks. I mainly trade and consider where in market structure and legs and identify a signal bar and count bars with pressure in mind. I strictly enter buy the close and keep risk to 5-7 ticks, with those above parameters in mind. I also like to use measured moves for targets and entries and avoiding entries.



But, anyone with ideas for Brooks and stops would be helpful.



Thanks!

What market/chart are you trading in which you can properly (meaning at the correct place) have a 2-3 tick stop lol?! unless you are trading a 144 tick chart or a very very small time frame, you cannot use a 2-3 tick stop! What instrument is this? Also different people have a different risk tolerance which is understandable. But you need to remember that the market does not care where your stop is, it does not care where your target is. You need to do what the market needs you to do, not the other way around. Don't try and force your will on the market. If the trade calls for a 10-15 tick stop in order to be at a proper level, then thats where your stop needs to be. Same with your target. You cannot use static stops and targets. They need to be varied based on the price action and the context. To me it sounds like you are coming from a perspective of fear, specifically fear of loosing money. As long as you have fear, you will be irrational in your thinking process and you will not be able to look at the markets objectively. Yes capital preservation is the correct way to remain in the markets, but you can still bleed to death from a thousand paper cuts (i.e small and consistent losses due to stops that are too tight and choke the trade out before it has time to work out.) Everything in the market is subjective, and every trader perceives it differently. There is no wrong or right way to view the markets, you only view them from whats in your head. You need to study your charts and really understand why buyers/sellers are entering in the market at the levels in which they are entering. Take time and study what is actually behind the candles. You need to develop a deep understanding of these concepts. Only then will you begin to understand when to cut losers and when to use wider stops and targets. Hope this helps. Also see my post below.

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  #22 (permalink)
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2nd Version of Morning Schedule

My first version didn't have the times on it nor all the chart analysis that should be part of my daily prep. I like posting this stuff since it is like an archive. Hopefully this will function as a catalyst for discipline in even more critical endeavors, like trading itself.

Attached Thumbnails
Starting to Trade and Getting Education-morning-checklist.pdf  
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  #23 (permalink)
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Al Brooks stuff is a good intro. Ultimately you will have to write your own method based on your own observations.

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  #24 (permalink)
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Randomness, Probability, Edge, and Fears

@Trader V

What I fear the most is losing. My desire for a positive P and L post commissions motivates trade entries and exits, which is really bad. I need to really interrogate this fear to assign its most deepest causes. I know I do not want to face others with loses and be perceived as a loser or just wasting a ton of time and all the sacrifice that entails. I imagine that will translate into fearing lose of money when I eventually go live. I like your injection of the word ‘irrational’ as it makes me try harder at something - thinking and explaining the market’s every tick. The second reason I have a small stop is that I think the market is going to either go up or down pretty quick after I enter. Over time I have come to learn that momentum does not take into account the randomness of the market and trading thinking what the market is going to do is really thinking the I have some form of control over the market. Well, the market is one thing I cannot control so I will try to focus on that which I can, mainly, at this point my reaction to the market.

Flowing with the market is what my resources touch. FT71, Brooks, and Trading in the Zone, and to some extent Fooled by Randomness. It is about accepting what the market does and being at peace with that. With these thoughts, how does one establish a winning approach? It seems the market is either random or full of possibilities of probabilities that can present an edge (an edge as per Trading in the Zone is the “higher probability of one thing happening of another”). If one accepts the market and its randomness then there are no patterns. If one accepts probabilities then there are patterns that can be articulated as having an edge. I really wonder what the third way is in this situation. It has to be something I haven't seen or thought of as the two thoughts are mutually exclusive.

I know somethings I can try.

Continue to learn how to approach the market by studying Fooled by Randomness and Trading in the Zone. FT71 and Steenberger has webinars on FIO also.

Replace my fear of losing with acceptance of the market. I need to widen my stops to up to 3.5 points and place them based on price action.

Continue to focus on Brooks. Today I found the usefulness of his Futures Magazine articles and the text not he members section of the Course website. I am going read all that then finish the Trading Room videos I have. I will consult the Course as needed and eventually complete the current edition of the course.

Mediate. I’ll start with a 5-10 minutes guided meditation on youtube each morning right after Trader Bites. This will help wash emotions or detach emotions from events and help me to be more objective.

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  #25 (permalink)
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johny1971 View Post
@Trader V

What I fear the most is losing. My desire for a positive P and L post commissions motivates trade entries and exits, which is really bad. I need to really interrogate this fear to assign its most deepest causes. I know I do not want to face others with loses and be perceived as a loser or just wasting a ton of time and all the sacrifice that entails. I imagine that will translate into fearing lose of money when I eventually go live. I like your injection of the word ‘irrational’ as it makes me try harder at something - thinking and explaining the market’s every tick. The second reason I have a small stop is that I think the market is going to either go up or down pretty quick after I enter. Over time I have come to learn that momentum does not take into account the randomness of the market and trading thinking what the market is going to do is really thinking the I have some form of control over the market. Well, the market is one thing I cannot control so I will try to focus on that which I can, mainly, at this point my reaction to the market.

Flowing with the market is what my resources touch. FT71, Brooks, and Trading in the Zone, and to some extent Fooled by Randomness. It is about accepting what the market does and being at peace with that. With these thoughts, how does one establish a winning approach? It seems the market is either random or full of possibilities of probabilities that can present an edge (an edge as per Trading in the Zone is the “higher probability of one thing happening of another”). If one accepts the market and its randomness then there are no patterns. If one accepts probabilities then there are patterns that can be articulated as having an edge. I really wonder what the third way is in this situation. It has to be something I haven't seen or thought of as the two thoughts are mutually exclusive.

I know somethings I can try.

Continue to learn how to approach the market by studying Fooled by Randomness and Trading in the Zone. FT71 and Steenberger has webinars on FIO also.

Replace my fear of losing with acceptance of the market. I need to widen my stops to up to 3.5 points and place them based on price action.

Continue to focus on Brooks. Today I found the usefulness of his Futures Magazine articles and the text not he members section of the Course website. I am going read all that then finish the Trading Room videos I have. I will consult the Course as needed and eventually complete the current edition of the course.

Mediate. I’ll start with a 5-10 minutes guided meditation on youtube each morning right after Trader Bites. This will help wash emotions or detach emotions from events and help me to be more objective.

Here is something I think you might need to focus on: John.......



http://https://youtu.be/JqvRUIcXv9o

Also....
Ask yourself: Why meditate? What is it? What does it do? Whatever it does, why would I want that?

Then ask: Why do I eat food?

Ron

It is an axiomatic fact that while you meditate you are speaking with your own spirit. In that state of mind you put certain questions to your spirit and the spirit answers: the light breaks forth and the reality is revealed.
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)

Last edited by Blash; April 15th, 2017 at 10:32 PM. Reason: signature missing
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  #26 (permalink)
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3rd monthly check-in

Time for another monthly check-in journaling my experience as someone getting an education in trading and just starting.

What I Have Done
I am settling into a rhythm. It is not complete, but some parts are sticking around. Little change has been made to forming my trading log so I am going to update that. The part that needs most edit is the more evaluative/qualitative parts. I am still sticking it out with Brooks. He offers many resources and creating a sorta syllabus for my needs has been a challenge. Currently, I am focusing on the manual and best set ups part of his course website. Once that is complete I will complete the Oct ’16 Training Room videos I have (I watch one while taking notes then watch the next day taking notes then consolidate the notes of the two days then do it again - I am half way through the month). I watch Trader Bites each morning - good for me to see where my pre-market analysis matches and also in conjunction with Brooks’ daily post. Plus, it is good for news and most important of all it is good for making the switch from outside the trade to trading, sorta like a meditative segue. Still sim trade one contract of ES on 5 minute chart using Brooks’ price action and after first 54 trades I am up 11 ticks. Slowly and appreciatively reading Fooled by Randomness. Also, I have checked out TalB's journal on FIO and that is has been helpful.

What I Have Not Done
I must spend more time analyzing the day’s charts. I need to take a morning each week and study instead of trade. While giving myself many opportunities to trade is key, so is studying - especially at this phase of education where I am just starting and my summer schedule with work is busiest part of year.

I have kept Grimes on the shelf. I have not even considered courses or educational treatments other than Brooks and the Stage 5 resources.

Lessons
Blash posted the Mark Douglas link and I am going to watch one of his interviews. It is getting clearer and clearer as I listen to experience that consistency, patience, and discipline are the keys to success and not so much grinding out hundreds of pieces of information. If it is true that the market will test every part of you then self-developed ought you be.

I am finding out this is not as exciting as when I first started. And, that is fine, especially given that excitement detracts from focus. I do enjoy this though. The activity is pleasing.

I need to focus on my reactions. People talk about the psychology of trading, but little is said of the psychological effects of trading. I want to be able to identify what causes a behavior. For instance, there have been times where my rationality has been tossed. One day I had a string of 5 loses (36 tick lose in a day is a whopping aberration) that almost wiped out all my gains. It went on as long as it did because my focus on patience had been destroyed and instead my focus was on suffering. It was borderline humorous. Upon review, I see that my trading was just awful - entering late and without any great reason over and over. Another time this sorta thing happens is when I start tightening my stop or target. Trying to hit things just right destroys my concentration and I end up exhausted.

This focus on understanding reactions will also help me increase the number of trading sessions. Some mornings I am just not feeling ambitious. I could have been doing well for a few days or poorly for a few days and I either way I just can’t motivate to trade. Maybe I am physically worn out from work, but even when I get an hour or so less of required 7 hours of sleep I can still trade. I oscillate between trading as too easy or too hard, I just need to balance. I am most hungry for trading after some good studying.

Ahead
Goals:
Revamp Trade Log with focus on qualitative parts and identifying probability
Revamp morning review of ES market - mine, FT71, and Brooks as anchor
Friday, my worst trading day of the week, study 2.5 hours in the morning
Identify my triggers - ask myself what caused an emotion I have?
Continue to focus on learning Brooks - keep giving it time to keep clicking

Trade Management goals -
focus on price action stops and targets
move stops and targets only based on price action (not P/L)
accept 8 tick gain - or 4 tick gain bc of tightening stop
figure out a way to tighten stop
better understand the swing stop and the 1 risk:2 reward stop

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  #27 (permalink)
Trading Apprentice
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Sorry I'm late ti the party here, but I just found IOFUTURES last night.

I have viewed literally hundreds of videos from a plethora of trading websites, too many to name here, and have been involved with several websites as a subscriber.

In my opinion, Al Brooks has the best training course out there. I have seen everything from the sublime to the ridiculous.
Al's Price Action / no indicators theories seem to work well. His new ONLINE training course is extremely well thought out and presented - a great addition to his older, also excellent, downloadable course. He seems to really enjoy what he does and wants to share his knowledge with as many people as wish to listen.

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  #28 (permalink)
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@TradeThatJazz

Yes, Al Brooks stuff is really good. Between his new series and new approach to his Trading Room (I heard he is entering live trades now) one can't go wrong. And, it is not just the sheer massive volume and comprehensiveness of his work, it does seem to work.

I also plan to take the Order Flow webinar from John Grady NoBSDayTrading when he offers it in late fall of this year. I hope, upon completion of studies of that, that I can approach a DOM as effortlessly as a price/time chart.

Thanks for the post.

Also, I was wondering how do you handle the risk of ruin? I am wondering what you do, given the leverage in the future contracts, to prevent losing all your risk capital and your shirt when unexpected news, Black Swan, or operational error occurs. Personally, I am sticking to only going short and trading uncorrelated instruments to maximize opportunities. I found a great website on FIO for correlation: http://www.mrci.com/special/correl.php.

That is where I am now.


Last edited by johny1971; August 4th, 2017 at 05:15 PM. Reason: failed attempt at creating hyperlink
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  #29 (permalink)
Trading Apprentice
sonora california
 
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Favorite Futures: EminiES
 
Posts: 7 since Aug 2017
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Actually, I am currently involved in absorbing all I can from AceTrades.com small-stop e-minis. From his YouTube videos and free trials, the basic method seems to work - although the nuances and "9-keys" are still unclear.

I am asking if anyone would be willing to share any first-hand knowledge about AceTrades - if they would be willing to share, perhaps, PDFs, videos, etc. I would be very grateful to them!

Al has so many videos out there that it is practically impossible to keep up with them. I viewed one today where Al showed once again that he has a firm grasp of the obvious (and so should I). He was talking about so many traders (bulls) looking for 1, 2, 3 or 4 points, and bears know this and want to short at those levels. That is why many times the price may reach a tick BELOW these points and reverse, leaving the trader without a profit, and perhaps a loss when the price evades the full-point mark.

Anyway, I have come to believe that Al's Price Action course is definitely one of the finest around.

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  #30 (permalink)
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Update on Education Plans - NoBS and Norden


I have begun the basic Grady course and it is definitely worth the $85 or so I paid for it. Some of it I have heard before from FIO, FT71, reading (like End to the Bull or High Probability Trading), but the stuff I haven't heard (like DOM setups) make the course worth it. I plan to get the intermediate course (if only to offset the course of the webinar) then take the webinar in October.

It seems his style could work, just like all else, it takes time, patience, and discipline. And, now I can add detachment to that list after reading the preface to the Reminiscences of a Stock Operator, one of the few if not only books recommended in the Basic Course.

Like I say in my thread, overall the price ladder education is a component of education to help get an edge. So I still read some Brooks stuff and plan on taking FTs trader development course. Also Futex price ladder course (about $900) could be part of the plan. Al Brooks stuff is very digestible when learning it. It seems easy, but knowing it isn't and really trading it is challenging. The NoBS is not easily digestible. It is hard, but it should pay for itself. Furthermore, this is one of the lessons of An End to the Bull - brokers like to give us easy stuff to learn because it feels good and so we just keeping eating their junk-food. Note, there are good brokers out there - like, the ones that over good services while being clear about expectations about what you can do with what they may or may not be teaching.

Keep in mind I have been an FIO member for just over one year and have made one live trade and maybe 40 or so sim trades (summer is when life really kicks in, so now I am getting back into trading). And I am perfectly fine with that. However, on the other side I do realize I got to trade to make money and time is off the essence. Now, that I am back into it I am doing all I can to be efficient with my education (I am learning efficiency is key since there is so much to do, cutting the chafe from the wheat is starting to seem really important and just saying no to educational opportunities like courses, youtube videos, even all those advertising/informational emails) since there is so much to know education before trading could never end, but I ain't about to let that happen.

Also, I just finished Gary Norden's book An End to the Bull. It was a good, informative read that altered my perspective. He drives a few points home very well - chief among them, traders trade information and others trade noise - and sets the reader down the right road as far as what to focus on when trading. My concern is, is that it seems part of his method is to know a lot about what is going on with a market that I wonder how it is he can trade so often and so quickly. Even if all that information is to provide context, going in and out of trades so frequently I think it would be difficult, if not impossible, to process all that information and microscalping (it seems he is microscalping). Overall, I am lad I read the book and would put it up there with other trading essentials - like: Fooled by Randomness (for perspective), Reminiscences of a Stock Operator (for perspective), Trade Your Way to Financial Freedom (overview of Tharp, an academic and trader), High Probability Trading (cut your losses), Trading in the Zone (serious psychological framework and development).

Why NoBS? Order flow seems essential it seems if learned and can provide and help provide edge and John Grady has got some good reviews for his courses and webinar and after taking his basic course I see why. Also, learning from a pro and hearing his war stories and, more importantly, what he has learned, should be key. Watching him trade live should be super educational.

I read An End to the Bull since it seemed to be part of the order flow camp along with Peter Davies and John Grady. That proved a sorta incorrect assumption, but it still proved to be an excellent read. His section on heuristics (the rules are mind uses to get things done easier or quicker that are adequate yet imperfect) is presented in a learnable way as are his arguments about the financial junk food industry (ie learn from traders not brokers).

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