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Advice from traders with 5+years experience

  #81 (permalink)
Jakarta, Indonesia
 
 
Posts: 23 since Feb 2012
Thanks: 6 given, 8 received


Private Banker View Post
Educate yourself. The CME's website is an excellent source to start out with. What did you study in college? Finance hopefully. Your profile states that you're in Chicago, correct? You happen to be in the Mecca for futures trading. Maybe ask your broker if they know anyone you could sit down with and learn from. Sitting and watching with a professional trader will be the best way to get an initial view of how to do this correctly.

In addition to that, here are some general things to follow:

- Do not trade cash until you're consistently profitable on SIM.

- Make sure you're well capitalized.

- Trade SIM the same way you plan to trade live including appropriate market vs. your risk tolerance, appropriate position sizing and realistic risk:reward ratios, stop placements, etc.

- Start small even if you have a sizable account. Start with small positions to get a feel for trading with cash and overcome the psychological hurdles associated with it. Do not go max leverage.

- Do not scalp trade. Look to only take a few trades per day while learning that have reasonable targets. This will avoid over trading.

- Institute a daily loss maximum. You want to be able to come back the next day and try again.

- I mentioned educate yourself. This means learning multiple methods. Do not try to duplicate someone else's method. Take what you like from various methods you learn and create something on your own that suits your trading goals. Trying to duplicate/copy someone else teaches the wrong habits. You need to think for yourself which is one of the most crucial elements in trading.

- Keep it simple. Do not try to utilize a strategy that has a complex set up criteria with a bunch of bells and whistles. You need to have clear signals.

- Do not strike out on the quest for the indicator holy grail or trading method. You need to learn the fundamentals of the markets. One thing you'll see is people looking for the fast easy way to success. I think this has a huge impact for reasons many fail. They aren't willing to do the work and learn the basics. Do not go out and buy a bunch of fancy indicators or pay for a trading method.

- Do not only utilize small chart intervals. I've seen a lot of people trying to trade with a myopic perspective. You don't want to be navigating a map with a microscope. Look at multiple time frames to see all the important areas that will have an affect on price. An example would be, looking at a five minute chart with higher intervals to see where the OTF traders may step in. One of the reasons traders use smaller time frames is an attempt to justify using a small stop. That's a fools game there and you'll have a tough time with that.

- Make sure you have good equipment but don't over do it. Have a solid trading only computer while using a trading platform and data feed that is fast and dependable while keeping your overhead low.

- Study your screens as much as possible even if you're done trading for the day. It's important to learn how your market moves as each market has their own unique personalities. ES is far different than CL and 6E is far different than ZB for example.

- As far as trade/money management goes, do not exit your trade early because you're "afraid" the market will turn on you. Let the market take you out. As you become more familiar with trading, you learn when something isn't right about your entry and you'll know when to get out. But while learning, you should avoid this because you'll find yourself getting out of winning trades.

- Determine an appropriate market to trade based on your account size and the risk you can take on. Do not trade a particular market based on how much money you can make. It's all about how much you can potentially lose if you're wrong. Many traders get caught up in this and you know what happens next. Your risk/uncle point should be consistent with the market you're trading based on it's volatility. If you can only risk a small amount per trade, maybe trade a small tick size/low(er) volatility market.

- Do your homework before each trading day with a game plan based on what you'll do if the market ends up here or there. What will you be looking to do? This avoids impulse trades or simply chasing the market.

- Remain humble in good times and in bad. If you're doing well and you start to get cocky, guess what happens next? The market will find you. Treat trading with as little emotion as humanly possible (not easy). Behavioral finance is one of the biggest hurdles we face.

I'm sure there's a lot more to be said here. Feel free to ask anyone questions.


Thanks was a very good read. Thanks a lot for sharing.

happy trading
BT

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  #82 (permalink)
NYC + NY / USA
 
Experience: Advanced
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
 
kronie's Avatar
 
Posts: 798 since Oct 2009



AVOID paid services and vendors, until



1) until you can understand what they're offering and whether it fits into the style of trader you have become and style of trading you have established

2) until you can explain what they're offering, will do for you, that you are not doing, or can not do for yourself, or get here (for free), or as a VIP Member

-- reread the prior thread from Indonesia (it was excellent)


Last edited by kronie; April 4th, 2012 at 09:51 AM.
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  #83 (permalink)
Louisiana
 
Experience: None
Platform: Sierra Charts
Broker: DDT/TT
Trading: ES,6E,DX,6A,CL
 
saints51's Avatar
 
Posts: 22 since Mar 2012
Thanks: 68 given, 16 received



kronie View Post


AVOID paid services and vendors, until



1) until you can understand what they're offering and whether it fits into the style of trader you have become and style of trading you have established

2) until you can explain what they're offering, will do for you, that you are not doing, or can not do for yourself, or get here (for free), or as a VIP Member

-- reread the prior thread from Indonesia (it was excellent)


I will say avoid paying for any information. Everything you need is in-front of you. We have a vast amount of information thats available at your finger tips 24-7. Only bill you have to pay is your Internet bill. Thats all you should be paying for to learn. Anything else is sharks after your hard earned money.

Now the catch to this is you got to get off your ass and find it. This is a daunting task for a lot of people in today's society that is labeled the entitlement society. There is a reason for that stereotype. People want to be spoon fed everything. So what they do is find someone to pay and teach them the ropes. Then they realized its bad info when its not because it seems to hard. This is where potential traders jump from system to system and hand over their cash to the experienced.

Excellent thread and glad to be a part of this great community.

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  #84 (permalink)
NYC + NY / USA
 
Experience: Advanced
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
 
kronie's Avatar
 
Posts: 798 since Oct 2009

my cynical comment was in direct relation to the other thread, and often comment of how much one has lost paying others for their supposed insight to trading:



you would think that if someone had over $10,000 US in an account that even dumb luck would strike more than twice, however, the cycle is usually, the person becomes doubtful of themselves or overwhelmed and springs for a seminar and course work (perhaps a book, study materials and computer software) at roughly $2,400 per clip

in the last ditch hopes that attending will make the difference, and they become stuck in the repeated cycle of loss, and no substantive change.

The markets are so dynamic that even with the best of education, one's approaches fail. You never really hear about the well heeled hedge funds that loose millions doing the same thing, and even more millions hiring / firing staff that supposedly bring that experience with them, and still fail. So this process is not unique to us individual traders.

What is unique to us individual traders are the finite resources of our accounts, and how precious those funds are towards risk capital and not risk education or faux paux education. Hence the conclusion to wait until one has established a style, identified a weakness or a unique approach that a vendor has, that one understands after attending a free introduction or presentation, and then one or two free or near free (very low cost) presentations (such as a free or near free one-week membership).

Vendors and software products have their value! The problem is making sure what they're offering is worth something to your specific method of trading, and not just a scatter gun approach (buying everything in the hopes that something will hit).

Good trading to you!

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  #85 (permalink)
NYC + NY / USA
 
Experience: Advanced
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
 
kronie's Avatar
 
Posts: 798 since Oct 2009

for example, and an unsolicited, completely disconnected reference to these guys:

iFundTraders.com - Presented by Oliver L. Velez

I spoke with their educational director, at the recent NY Traders Expo. They have over 3,000 traders in their fold. Their approach has created such a loyal following that they (these traders) usually don't need to show up on these or similar threads, but they've gotten on with their lives.

I watched a room full of attendees, and one said and had (a few years ago) such a glowing endorsement that I paid more attention that I would have otherwise, and learned some actual chart reading tips that eluded me previously.

Every now and then, there are real people that show up, that find fulfillment in both teaching, earning a living from teaching as well as from trading and sharing that they're both rare, memorable and unique. He's not the only one, but one that comes to mind recently.

another one (again, unsolicited and completely disconnected from) was The Intentional Trader


One has to first identify their own trading style, and approach, then what's lacking (this usually comes from doing analysis of why your trades lost, and what was either missing or could have been done better), and then searching for either software or a service that meets those needs.

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  #86 (permalink)
Jakarta, Indonesia
 
 
Posts: 23 since Feb 2012
Thanks: 6 given, 8 received


kronie View Post
my cynical comment was in direct relation to the other thread, and often comment of how much one has lost paying others for their supposed insight to trading:



you would think that if someone had over $10,000 US in an account that even dumb luck would strike more than twice, however, the cycle is usually, the person becomes doubtful of themselves or overwhelmed and springs for a seminar and course work (perhaps a book, study materials and computer software) at roughly $2,400 per clip

in the last ditch hopes that attending will make the difference, and they become stuck in the repeated cycle of loss, and no substantive change.

The markets are so dynamic that even with the best of education, one's approaches fail. You never really hear about the well heeled hedge funds that loose millions doing the same thing, and even more millions hiring / firing staff that supposedly bring that experience with them, and still fail. So this process is not unique to us individual traders.

What is unique to us individual traders are the finite resources of our accounts, and how precious those funds are towards risk capital and not risk education or faux paux education. Hence the conclusion to wait until one has established a style, identified a weakness or a unique approach that a vendor has, that one understands after attending a free introduction or presentation, and then one or two free or near free (very low cost) presentations (such as a free or near free one-week membership).

Vendors and software products have their value! The problem is making sure what they're offering is worth something to your specific method of trading, and not just a scatter gun approach (buying everything in the hopes that something will hit).

Good trading to you!

I think that is very much true, and I think it eventually comes down to a very personal approach towards the market, developing your very own, personal strategy that fits with you as person and personality. That is something no course or trading book can teach you. They sure will give you good pointers, and it's good to pick and remember some of those, but still it will not be YOUR 'method'. There's a million ways to make a living on the market, and ten millions ways to blow it.

happy trading,
BT


Last edited by BataviaTrader; April 7th, 2012 at 04:15 PM. Reason: typo
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  #87 (permalink)
NYC + NY / USA
 
Experience: Advanced
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
 
kronie's Avatar
 
Posts: 798 since Oct 2009

from time to time, I will add on to my comments and outstanding experiences,

listen there's a number of worthwhile services out here, worth paying for,

however, you are the final arbitor (judge, jury and executioner) of your trading capital, no, precious limited trading capital

for most of you, that capital represents one's pension (401k, 201k, 101k), or one's life's savings after being fired (downsized, off-shored, whatever) or one's severance pay.

whatever you call that grub stake, it is a finite resource.

after you subtract minimum (with a generous padded cushion for losses) margin required to open a futures account at your desired, or convenient broker,

after you subtract newly purchased hardware (whether upgraded desktop, new laptop, new screens, etc.)

after you subtract for a 12 month (minimum) contract to your ISP for high-speed service,

after you subtract for your quarterly $185 Ninja Trader (minimum entry level) license fees

after you subtract for basic software (that you either understand or recognize can help you in your learning / trading curve)

then there really isn't much left for most of us......

one can only hope, one makes it to profitability long before those precious funds run out, and one becomes desperate for more, just to get back in the game, and live the dream of self funding one's lifestyle and future retirement

from that remaining pool of funds (looked at in total figures, not monthly figures) comes:
1) stop losses
2) re-funding the trading account
3) twice
4) three times
5) four times
6) five times

7) coffee, movie, dinner and a sob story to your spouse, to allow you to keep losing, uh, trying
8) six times (re-funding the trading account)

9) paid advisory services.....


Every advisor will offer a trading room, whether over Skype, or otherwise, and usually software add ons that are very useful,

make sure you understand or have explained, how to use them,

so that I don't offend a dear friend, Gabe over at APA Zones, was just such a radically positive experience, so much so, that its worthy of mention.

again, without renumeration, affiliation or otherwise, and just from an observer status, he and his services were of worthy mention, in a very positive manner.

Good trading to you......

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  #88 (permalink)
Washington DC
 
Experience: Advanced
Platform: TT
Broker: Dorman
Trading: US Treasuries
 
fminus's Avatar
 
Posts: 126 since Sep 2009
Thanks: 156 given, 290 received

Fantastic Advice

There has been some fantastic advice by many of the posters. Not to beat a dead horse but...

1) Don't pay for information. All the information you need is at the fingertips. I will say though that I think finding a good mentor is key even if you have to pay them for their advice. Just make sure it's helping you fix the intangibles.. not the "try putting a 20MA on your chart".

2) Create your own strategy. It's ok to learn other peoples' strategies, but figure out what makes sense to you and what you're comfortable with.

3) Once you have a strategy, write it down your business plan. Visualize how you're going to be making those trades (profit taking, break even, and stops).

4) Whatever instrument you decide to trade, make sure you know what you're trading. If you're trading futures make sure you know the tick values, volatility, and rollovers.

5) Trade you strategy in SIM until you are confident your strategy works. I would recommend atleast 6 months worth of screen time and SIM. Learn to keep your emotions under control.

6) Keep track of your trades and use one of Mike's awesome tracking spreadsheets or something similar to it so you can remember the times you win. Breakevens are wins. It's easy to remember the losses but afterall this is a mental game.

7) Use proper risk management and never revenge trade. If you do make money on a revenge trade you'll reinforce a dangerous habit and it'll eventually nail you in the ass.

8) PRICE IS KING. There is no holy grail so don't bother searching for it. There are many trades that trade with minimal indicators on the charts.

9) Start by trading small. Smallest increment that you can trade without getting owned by commissions.

10) Stay humble. Trading is a lifelong journey. Over-confidence usually results in a break of discipline and a screwing of yourself.

11*) I wanted to end at #10 but I think it's important that you find a bigger purpose to trading other than amassing unforetold riches. There is no end to the money rabbit hole.

12*) There are no shortcuts. Learning to trade is painful. No matter how much you read about trading.. you will make some of the mentioned mistakes...repeatedly. So keep your head up!


Last edited by fminus; April 13th, 2012 at 05:45 PM. Reason: remembered more stuff to add
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  #89 (permalink)
thessaloniki
 
 
Posts: 18 since Apr 2012
Thanks: 6 given, 8 received

Don't keep reading EVERY trading book you find out there, find one reliable source of education (e.g. mentor, or maybe a good trading website) and stick to it. Don't mix all schools of knowledge together, you might lose sight of what's real and what's not.

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  #90 (permalink)
NYC + NY / USA
 
Experience: Advanced
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
 
kronie's Avatar
 
Posts: 798 since Oct 2009



Piperion View Post
Don't keep reading EVERY trading book you find out there, find one reliable source of education (e.g. mentor, or maybe a good trading website) and stick to it. Don't mix all schools of knowledge together, you might lose sight of what's real and what's not.


so true!

in fact, a profound statement....

you see, what happens mentally and psychologically, is when we surrender decision making and fact evaluation control to another source
(whether paid advisory;
(some sense of there's yet another book to read;
(some other software; etc.)))

what we're doing is slapping our own self esteem across the face.

One need build up and reassure one's self esteem and ability to handle, take and benefit from the rewards (and punishments) of taking risk (through trading gains and losses).

just that simple

ONLY AFTER you have built up a track record, then you can identify what you're lacking in, and then seek customized advisory help. Then your satisfaction and benefit from those services, whether software, trading room participation, or coaching will really magnify and achieve some form of success.

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