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I suggest you not read books at all. Study the market. Develop a trading plan before you lay down a dime. Platforms, data feeds, etc can all come later. What you will need is all available for nothing. If you require introductory material to futures, the CME site has tons of educational materials, and they are far less likely to reflect an author's agenda. Just click Education once you get to the site, then Getting Started and/or All Educational Materials. All free.
Can you help answer these questions from other members on NexusFi?
I agree that Mike's response was in poor judgment, especially the part about never succeeding in anything. He tells it like it is, and has earned the right with his trading resume, but that wasn't cool. Now there are some people who come in here just asking to get flamed, like the ones who only want to know how to make three points a day or which is the best trading room. But OP your post was not like that.
I think @Sg7JR laid it all out pretty well. Spend lots of time here on the forum. Mike's Ask Any Trading Question thread is as good as any book for beginners. Trade real money, but trade small at first. Don't even worry about making money for a year. No matter what your age, there's always going to be enough time to make money in the markets. Just learn to trade with small amounts first. I wish I had really understood this when I first started. As it is I am "starting over" my trading process for about the fourth time it seems.
Broker: Morgan Stanley. Only because that's where my IRA resides.
Trading: Currently stocks, hope to learn about e-minis
Posts: 9 since Jun 2015
Thanks Given: 67
Thanks Received: 3
Thanks PC. I don't consider myself thin-skinned normally, so good to know I was not over reacting. Enough about that. I will focus my attention on the AATQ thread when I am in here in the future and see what pearls my thread diving might bare. My Dad's people were from a small town called Waynesboro, in TN. About halfway between Savannah and Lawrenceburg. Beautiful country there and some fine corn likker. Thanks again for the advice.
Narcissus' post was very good. I'm new also, so please take what I have to say with that in mind.
There are many here that will say you don't need nothing but the screen. I myself would think that was much like saying you should be thrown into the deep end of the pool to learn to swim.
I read widely across the internet before coming to futures.io (formerly BMT)F. I found some references to the site, found some less than flattering posts and then read through days and days of stuff that is freely available here. I spent time reading posts by Big Mike and several others and eventually decided to support the site - I found no-place else which gave me so much value for my money.
I don't know your learning style, but whatever it may be, spend most of your effort in self-education. For myself, I read the relevant chapters of the CME documents and took every course on every site that I could. Just to get a feel for the size of the breadbasket. I didn't know squat. There is lots of good, free stuff out there - find it, use it.
I will say that the heart of successful trading is all tied up in your approach and getting your head screwed on straight and keeping it there. Take to heart the psychology comments that are made here.
Remember - finance markets are about taking money from one pocket and putting it into another pocket. I'm trying to take it from you (generically speaking) and put it in mine. People really blow it when they think trading is magic and a magic talisman (some call them indicators) will do the trick. Trading is work, it's hard knowledge-based work, and an idiot is going to be stripped of their funds.
To have a chance, line up the markers in your favor before you start, and because it's knowledge-based, learn all that you can before you sink a dime. Give serious thought about how much you need to have in your trading account and how much risk. The standard line is that no more than 2% of your account should be on any trade. Pick a financial instrument that is sized such that you can keep below that 2%. Don't use leverage. Leverage multiplies your Wins to be sure, but it multiplies your Losses as well. Consider how much commissions will cost. Think small numbers until you have your feet solidly under you.
I should also mention that many here feel that scalping the market is the least wise approach and often leads to excessive commissions, smaller gains and larger losses. Many feel that they don't have the account depth to do anything else and so it begs the question - should you even be in the market at this time? Some have said "go, get a job, gather 25K (minimum) that you can afford to lose, then consider the market". I happen to think that's rather sound advice. If you are scared to lose that money, you will have a psychological negative against you in addition to your inexperience. If your account is too small, you will also have a psychological negative against you. Put all three together and you can see disaster looming. That's what makes many of the successful traders cringe around here. Lather, Rinse, Repeat.
Then, start a paper journal and make paper trades for a month or so. Then get a trial account at any broker. I use the NinjaTrader platform and used their CQG/Continiuum data feed for several months and SIM traded based upon the account size I was going to open. For the first week or so, just get a feel for the platform. After that, treat the sim trading as real as you can. Set up the commissions, "Fund it" to the level you will have. And Trade it. Take notes, Practice, practice & practice. If it doesn't work, don't madly dash about. Stop. Re-think, Re-Analyze, develop a new plan. Start again. This you Lather, Rinse, Repeat until you get something that works for you.
But don't practice too long. I traded SIM for a Month with every day being approached as if it was real. I thought I was prepared. I opened the account and placed my first set of trades and I'll tell you, it's different when the money on the line is yours.
Consider your losses as tuition to the best job around.
First and foremost, have a growth mindset and be patient. The best way to learn is by doing, and it takes many months or years of hard work, consistent trading and trade reviewing, attempting to improve and reduce mistakes. There is no other way. Books and other traders advice are only a guide, they might accelerate your process but its all on you.
Find a strategy that "clicks" for you. Makes sense. Do a lot of searching. In general theres systems trading, price action trading, spread trading, order flow trading (I consider order flow to be a variant of price action but on the smallest time frame with pure, unfiltered information about volume and price, it can be used in conjunction with price action trading). Everyone will have their own take with a particular approach. I view strategy as "surface level" - i.e. it is not that important, because great traders have different approaches - if it was that important all the good traders would be using thfe same " optimal" strategy. It is more about fit and using your strengths.
Also understand psychology. Specifically - know your triggers, and know what they feel like. Do choppy markets frustrate you and cause you to do forced trades? Are you able to identify when you are tense and anxious, and not focused on the market? Emotions will rule over logic, unless you are aware of them. You cannot control what you are not conscious of. The more importance attached to the outcome, the worse you will trade. Hence why sim is easier than trading live. If someone points a gun to your head and says, you have one trade to make and if it loses I pull the trigger, I can pretty much guarantee your ability to process information will be very diminished and your actions will be driven by emotions and not by market movement that signal opportunity.
Fav books on trading pyschology, must reads for all traders imo. All have been crucial in aiding me.
1. Mindset (Carol Dweck)
2. One good trade, the Playbook (Mike Bellafiore)
3. Daily Trading coach (Brett Steenbarger)
Resources that have helped ME
1. No BS daytrading by John Grady. Gives a great framework to understanding markets (perspective of trapped traders puking + breakout traders pushing a market up or down), how market gaming works and a good introduction to reading orderflow. Peter Davies of Jigsaw trading also has good resources on this.
2. Technical patterns. Just learning basic chart patterns - continuation and reversal patterns. You might pick
up your own patterns and setups as you trade.
3. Sitting in front of the screen watching the market for hours, day in and day out. This more than anything.
I view markets as cause and effect. Typically there is one significant event, then a follow through. Maybe a high volume
stop hunt traps a lot of traders and then throws it in the opposite direction starting new momentum. Or a level breaks with minimal participation, suggesting market is out of steam.
Just don't give up, don't listen to naysayers especially if they aren't successful traders themselves, and if they are take everything with a grain of salt. Sometimes you get a lot of methodology bashing, like the classic fundamental analysis is rubbish vs technical analysis is rubbish. Markets are moved by perception of future price movement, which is fundamentally subjective. There is no right or wrong way to approach the market. That being said, if someone gives you bs like "you can make $1k a day by following this one simple rule" thats a red flag. No matter which path you take, the only way to success is hard work. Constant practice, constant review, constant improvement.
Understanding yourself is just as important as understanding markets.
Studying the market rather than books written by people who may not even trade is not necessarily analogous to being thrown into the deep end of the pool and being expected to teach oneself how to swim. If done properly, a more accurate analogy would be stepping into the shallow end, gauging the temperature, the movement of the water, buoyancy, etc, then gradually moving deeper into the water, up to one's ankles, knees, waist, becoming familiar with the environment of the water and how one moves in it. Reading books about it is not quite the same. This would seem to imply that I advocate learning by doing, which is not necessarily the case, if by "learning by doing" one means throwing away one's money on a process which he does not understand. One does not learn to play poker by sitting down with professional players and feeling one's way through without even knowing what a full house or a flush are, much less which beats which.
There is nothing inherently mysterious about charts. They are merely a means of recording transactions. A time-and-sales display accomplishes the same thing in a different form. Likewise a "tape". But one must understand what all of this is all about before even thinking about engaging it, much less profiting from it.
Pretend that you are watching a team sport in which you know nothing about the rules and couldn't care less about the players, much less about who wins. But you do want to understand what's going on, out of curiosity if nothing else. Your chief thought is not when you should jump onto the field and begin playing. Your chief thought centers around the following questions, primarily What the Hell Are These People Doing? So you observe.
What are they doing?
Where are they doing it?
Why are they doing it? Why are they doing it where they're doing it and when they're doing it?
How are they doing it?
What do they want to accomplish? What were they doing before?
If one observes the game long enough, he begins to discern the rules and will enter a phase where he pretty much understands what's going on but still has no interest in which team wins.
Broker: Morgan Stanley. Only because that's where my IRA resides.
Trading: Currently stocks, hope to learn about e-minis
Posts: 9 since Jun 2015
Thanks Given: 67
Thanks Received: 3
Greg, thank you very much for your time to respond, as well as your advice. Everything you said made a lot of sense. From everything I have read, it seems to come down to two critical components...have a plan, and believe in your plan so that you can be not so strongly influenced by the fact that it is your hard earned dollars being bet on the line.
Hi DbPhoenix - I don't think we're far off on our perspective at all based upon your response to me and I thank you for expanding upon your earlier remarks. However, I am in favor of reading background / educational "books" (mostly, these days, online articles and tutorials) to get an understanding of the markets: what they are, how they work, fundamentals & etc. I'm not advocating books on chart patterns or "How To Trade" books and the like.
Nothing beats studying the market as directly as you can and that equates to screen time and attendant analysis as per your post. I do advocate stepping into the shallow end. The real learning won't come until you actually do step in.
I've found the best way to get someones attention is to be direct with them. No fluff, no false pretense or hopes. When it comes to trading, most people need a dose of reality.
I find this to be especially true when someone expects shortcuts.
