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What should a beginner learn to trade first?
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What should a beginner learn to trade first?

  #31 (permalink)
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monpere View Post
I know the conventional wisdom about sim, but sim didn't work for me. For some reason I could not take it seriously enough, so I developed some bad habits with hit, because psychologically, I knew it was not real. What it helped me with was with developing my entry and management techniques. I had to actually put real money on the line to develop discipline, because the consequences were real, and they hurt

That's where moving to live trading cheap mini contracts, and ETF's made the difference for me. The consequences were real, but the sting was not as bad. You minimize the risk of ruin, until you fully learned your lessons that only real life can teach you... if you are like me

I'd agree with this as well, the original learnings for me where before you do not double up on your paper account 3 times in a row, and show at least 6 months of consistency do not go anywhere near the real money. I've done that but than when i switched to real money, it was a bit of a disaster and very quicklly lost confidence. My issue was i was cutting profits short (playing 5 spot lots ) and letting loosers then run long and being stoped out. I had to go back then to minis and get my confidence back and logic in my head right.

I guess, having few hundred dollars of few grand in green in the beggining tends to play with the head. Where as if you play micro on mini on the begging losses are real to cause pain as well as profits and gets you in a swing of things but not disasterus.

Regs

Markets are logical and
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  #32 (permalink)
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monpere View Post
I know the conventional wisdom about sim, but sim didn't work for me. For some reason I could not take it seriously enough, so I developed some bad habits with hit, because psychologically, I knew it was not real. What it helped me with was with developing my entry and management techniques. I had to actually put real money on the line to develop discipline, because the consequences were real, and they hurt

That's where moving to live trading cheap mini contracts, and ETF's made the difference for me. The consequences were real, but the sting was not as bad. You minimize the risk of ruin, until you fully learned your lessons that only real life can teach you... if you are like me

I understand what you are saying about discipline, but new traders have to learn the logistics of trading before risking real money.

When I first started, I lost more money from operational mistakes than from discipline issues. But that's just me.

When I first started, I traded YM. It was $5 a tick and moved really slow. I didn't make much $ on it, but it was difficult to lose a lot of money on it.

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #33 (permalink)
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monpere View Post
The mini Gold (YG) looks pretty interesting as well.

Is the YG specifically easier to learn on / less risky than the ES? Is there a metric I can use to see for myself? Pure volatility?


ThatManFromTexas View Post
If you can't make money in SIM you can't make money live.

If you make money in SIM it doesn't mean you can make money live.

Practice... you will have plenty of time later to lose money.

Without trying to be argumentative, I know from my experience as a poker player that this isn't true for all people. Removing money from a game of poker leaves me with no interest - how can you value potential moves without some semblance of real value? How can you play against opponents who are also not grounded in reality.

Though I recognize trading is different from poker, I think the same idea applies. I definitely expect to learn the mechanics, and maybe practice reading price a little, but how will I learn money management, discipline, and savvy if I only care about whether I win or lose "on paper?"


monpere View Post
I know the conventional wisdom about sim, but sim didn't work for me. For some reason I could not take it seriously enough, so I developed some bad habits with hit, because psychologically, I knew it was not real. What it helped me with was with developing my entry and management techniques. I had to actually put real money on the line to develop discipline, because the consequences were real, and they hurt

That's where moving to live trading cheap mini contracts, and ETF's made the difference for me. The consequences were real, but the sting was not as bad. You minimize the risk of ruin, until you fully learned your lessons that only real life can teach you... if you are like me

I'm happy to hear I'm not the only one who thinks this way. What did you trade to start? For the ETF's, were you able to get around PDT?

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  #34 (permalink)
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ThatManFromTexas View Post
I understand what you are saying about discipline, but new traders have to learn the logistics of trading before risking real money.

When I first started, I lost more money from operational mistakes than from discipline issues. But that's just me.

Ah, yes, this is exactly what I hope to learn from SIM.


Quoting 
When I first started, I traded YM. It was $5 a tick and moved really slow. I didn't make much $ on it, but it was difficult to lose a lot of money on it.

I have read a little that YM is very volatile. Is it a suggested first Instrument by others?

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  #35 (permalink)
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dyross View Post
Without trying to be argumentative, I know from my experience as a poker player that this isn't true for all people. Removing money from a game of poker leaves me with no interest - how can you value potential moves without some semblance of real value? How can you play against opponents who are also not grounded in reality.

Though I recognize trading is different from poker, I think the same idea applies. I definitely expect to learn the mechanics, and maybe practice reading price a little, but how will I learn money management, discipline, and savvy if I only care about whether I win or lose "on paper?"

1. SIM keeps score.

2. Losing real money certainly could flatten the learning curve ... but then again... if you put on one of those shocking dog collars and have someone zap you every time you screw up.. it would probably work as well..most traders wouldn't do that... but then again... you are in San Francisco...


dyross View Post
I have read a little that YM is very volatile. Is it a suggested first Instrument by others?

As with any instrument you consider trading, you have to become familiar with the behavior of the instrument. The only way to achieve that is face time with the instrument.

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #36 (permalink)
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ThatManFromTexas View Post
As with any instrument you consider trading, you have to become familiar with the behavior of the instrument. The only way to achieve that is face time with the instrument.

Of course. But what characteristics do you think make it appealing for starters?

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  #37 (permalink)
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dyross View Post
Of course. But what characteristics do you think make it appealing for starters?

1. Low margin to trade.

2. Low price per ticksize.

3. Trending Characteristic.

4. Moves slow enough to give a new trader time to make a decision

FX works the same except you never know if you are getting actual results or if the "Dealer" is manipulating your trades.

But that's just my opinion... YMMV

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #38 (permalink)
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dyross View Post
What if I don't have $25K?

As someone who has recently become fascinated with day-trading, I am hoping to "give it a shot", perhaps a couple mornings a week before my day job. The $10K minimum IB imposes to open an account is reasonable for me to get started, but I certainly can't commit $25K.

Given this, do you think it makes sense to start off with the ES? I would, of course, trade 1 contract at a time, and manage risk with stops. Are there other instruments that don't have PDT restrictions but are better for beginners?

As a beginner, I would recommend against futures until you've got some proven methods in place and a firm grip on trading psychology. A better place to start is with swinging stocks (not day trading stocks, so no pattern day trader $25k minimum required). You can also trade forex currency pairs at $1/pip with some good brokers, instead of futures currency pairs @ $12.50/tick (12.5x less costly for a beginner).

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
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  #39 (permalink)
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Big Mike View Post
As a beginner, I would recommend against futures until you've got some proven methods in place and a firm grip on trading psychology. A better place to start is with swinging stocks (not day trading stocks, so no pattern day trader $25k minimum required). You can also trade forex currency pairs at $1/pip with some good brokers, instead of futures currency pairs @ $12.50/tick (12.5x less costly for a beginner).

Mike

Can you describe what "swinging stocks" means?

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  #40 (permalink)
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dyross View Post
Can you describe what "swinging stocks" means?

It means you open a new position with a stock (NFLX, BAC, C, AAPL etc etc etc) and hold it for several days before selling. You can find some stock scanners that show you stocks with recent volatility, and you can also analyze sectors and find over or under performers and look to long or short individual stocks within a sector. You can even trade ETF's and end up trading something like crude oil (USO), or even ES (SPY) if you want, but you are better able to control risk for smaller accounts because you don't have to buy as much as you do with 1 future contract.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote
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