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What I wish I would have known when I got started.


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What I wish I would have known when I got started.

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Two and a half years ago I was completely new to trading. Through a family friend I became acquainted with the futures market. Seeing how much the markets move and the opportunity that it represented I felt that it would be worth a shot to try trading. I was single, graduated from college, no debt and some money saved up.

Fast forward two and a half years and I am at a point in my life where I am going to have to take a break from trading as I currently am doing. I wanted to take some time to reflect on what I learned. In the process of reviewing my journals there were some things that I wish I would have known. I wish I would have been able to read a post like this when I got started. Not sure it would have changed me getting started as I really do not regret at all the two + years I have spent trying to learn trading, just that if I would have read this and followed this I believe it would have short circuited my learning curve.

I originally came from British Columbia Canada. I moved out to the Baltimore / DC area in may of 2013. Although I didn’t know when I moved to the States that I would meet someone, fall in love etc. I did feel that I should be checking in with a ‘reality check’ in a couple years to see where I was at. Once I got engaged I decided that after I was married I would need to take a cold hard look at what I am doing. That time has come.

I view my time in life as a risk/reward trade:
What is the best thing that can happen / what is the worst thing that can happen. For me the best thing that could happen would be that it would turn into a fulltime career for me. The worst thing that would happen is that I would lose my initial stake of money and come out of it with nothing. In my mind the best thing far outweighed the worst thing and therefore it was a good time in my life to take risks and give it a go.

Two and a half years later and recently married I want to take stock of where I am at in trading: Down about 10k in trading overall(at my lowest point my drawdown was about 17k). The majority of that came through the first year and a half. Although I have finally seemed to turn the corner in a number of different metrics in the last few months my situation has changed enough that I feel I need to take a different path. I finally feel very confident that if I was properly funded again trading could be a very viable business opportunity.

Why am I stopping? Let’s go back to viewing life (specifically the next two to three years) as a risk reward trade: What is the best thing that can happen / what is the worst thing that can happen? The best thing that can happen is that I can turn trading into a fulltime career and provide my wife (and future kids) with many of the same advantages that I had growing up. The worst thing is that two or three years from now as my family starts to grow I could have nothing – not be a successful trader and have no career with a dependable income to support my family.
Essentially that is the crux of why I feel I need to step away. I wanted to share some background just so hopefully you can see where I am coming from.

Now to get to what I wish I had known when I got started.

I believe trading is essentially three things.
1. Psychology (Mastery of self)
2. Money Management (Quite simple really)
3. Market Analysis (by this I mean whatever he is using as a way to decide what trades to take)

What I have seen often on this forum is that it seems many traders go through the following steps.
1. New trader does not know jack all about markets
2. Begins to learn about trading and market analysis
3. Learns some money management techniques ie: risk reward etc
4. Fails to make money
5. Changes his market analysis / reasons for entering a trade
6. Fails to make money
7. Decides that his ‘system’ is good because it works so well with the benefit of hindsight
8. Spends a ton of time trying to change one’s own psychology as mastering oneself supposedly should fix the problems
9. Fails to make money
10. Is extremely frustrated because if the person is being honest they feel like they are a failure at life
11. Decides that their market analysis must be wrong and changes things
…. The cycle goes on.
For nearly two years I went through that cycle. I got onto futures.io (formerly BMT) forum very early on which saved me from some of the unscrupulous vendors out there (coupled with a bad experience early on in my trading career). Yet I still found my path going somewhat along those lines.

Most people I see spend all their time focusing on the technical analysis side of things. When that doesn’t work they switch to psychology (which in some ways is easier: although I don’t know what is wrong about my analysis of the markets I can very clearly see what is wrong in me). The problem with this singular approach is that if your analysis is still crap you are not going to make money. The problem with most technical analysis I see most people doing on here it all involves lagging indicators which are essentially random lines.

Back to what I wish I had known.

Scalping for small targets is the absolute hardest way to go about trading.
The person that got me into trading was trying to scalp for 3 ticks at a time using a 10 tick stop on CL………..
This topic has been covered I feel in much better detail and on many places on the forum so I am not looking to start an argument. But these are the reasons that I believe scalping is the hardest way to consistently make money trading.
1. Trading is a negative sum game when you include the brokers. Every time you place a trade you have to overcome the cost of placing that trade. The less costs you have the better.
2. Your winners are smaller then your losers
3. Inability to use fundamental analysis effectively in the markets
4. Competing against HFT
5. Randomness of the markets as it goes through intraday cycles.

What I found finally started working for me was to trade one way per day. This gets out of flipping. Do your analysis, make a decision and then stick with that decision. If that decision proves wrong then get out.

Most of what the market does on an intraday basis is random noise
The majority of what the market does on most days simply is random noise. I am not trying to create an argument here. But I firmly believe most indicators are not worth the code they are written with, or the lines that they create. Please read through atleast the first 10 pages of this thread:



and listen to this webinar:



If you aren’t convinced by those two things I am not sure I can help you so goodluck

Money management principles
There is tons of books written on this and I have read a few of them. But what I think it boils down too is this:
1. Have enough money to comfortably be able to trade multiple contracts at a time. I think a minimum is 3
2. Don’t enter all at once!
3. Figure out when you are trading well, and when you are trading bad
4. When you are trading bad cut your size to one third
5. When you are trading well add to your trades and trade full size, or even press with more if you are up for the day. There is a quote by Stanley Druckenmiller that I feel is particularly apt "It takes courage to be a pig". If you are trading well and are making money for the day / week / month you have earned the right to be a pig and trade a larger size

Basically figure out whatever you got to do to make your winners bigger then your losers.

You will have to figure out your own money management system in regards to how much you will risk per day but just remember. The markets DO NOT CARE what 1% of your account is. If you have 10k in your account and you think you are following good money management principles by risking $100 because it is 1% you are severely misguided. You have to trade the market. Get your account to a point where you can psychologically handle the inherent risk the market requires to effectively trade it.

Have the ability to enter multiple instruments at once
Having the ability to lets say short the ES / go long the ZB at the same time. Figure out which trades are working and press those trades. Dump your losers. As @tigertrader says on here… “trading 101”. But if you can only trade one instrument it becomes a lot harder to figure out what your winners are without flipping multiple times.

Have the patience to let the market do its thing
Most large intraday swings take between 3-5 hours to complete. Somehow someway if those are the kinds of moves you are wishing to capture you have to have the ability to be patient enough to let the market do its thing: whether that is finding a part time job, some sort of hobby or something to let you do a secondary thing while still feeling productive with your time. Go download rosetta stone and learn mandarin or something.

Gain a fundamental view of the markets
Figure out what is actually driving whatever instrument you are trading. It probably isn’t a 30 SMA…. The melding of technical analysis and a fundamental viewpoint is key to longterm successful trading.

How to come up with a trading plan
Do your own homework. Are you convinced that a 30 sma and a 20 ema crossover is the holy grail? Great. Go do the actual statistics as to how it works. Don’t cheat the results because you are just cheating yourself. Don’t take anyone elses word for it. Figure out how to work excel, learn how to code or whatever you have to do to figure out how to start making statistics about the market.

What are market internals? For the ES, take a look at vix, tick, trin, add, ctick, market breadth etc. Let those along with the fundamental viewpoint you have built guide you in your decision making process. It is much better to have that on your charts and watching for divergences with those then it is too have MACD or stochastic divergences.

Find something to put the market into context – daily / weekly / monthly / yearly. For me personally the best I have found for this is the standard deviations of the VWAP. But remember whatever you decide on those are not magic lines. Just simply something to give you a frame of reference.

Figure out a way to understand volume and the role it plays in the market. Do some research on market auction theory.

Figure out Price Action
This term gets thrown around a ton but rarely do I see an adequate simple explanation of it. Unfortunately as far as I can tell there is no simple answer to understanding price action. The only way to understand price structure and form, identifying strength and weakness is simply by watching the market move and taking notes. Combined with Volume Profile analysis this should give you the basis to your trading ideas.

Figure out Volume Profile analysis
Take the time to download gomi’s market profile tools (if you use ninjatrader) figure out how to make it work. The ideas of how the market moves from areas of high volume to other areas of high volume. How it interacts in the thinly traded areas will greatly help you understand the price action that is going on. For the longest time I did not have any sort of volume profile tools on my charts. I only had the std dev. of vwap. Sometimes the market would come rushing right back and pause right on the vwap line, other times the market would cruise past the vwap and consolidate right above it before moving back down. The standard deviations will help you provide context. The volume profile will help you understand what is happening inside the daily range.

Listen to people who know more then you
At the end of the day I see two people that are consistently killing it in the markets. @Big Mike and @tigertrader. Go read their threads. Don’t argue or fight with them. Just listen and learn. And when you have done enough reading to start asking intelligent questions ask them. But don’t show up in their threads and start asking them naïve questions that could be answered by simply listening for a few weeks. Their time is valuable, probably more so then yours. Their help in the community is the single best thing I have run across in two and a half years of trading. Don’t be an idiot.

Engage yourself in the community
Of the last two and a half years this is quite simply my biggest regret. I firmly believe that had I followed this step I would have become breakeven/profitable trader much sooner.
Quite simply if you don’t put yourself out there don’t expect to get any magic answers from anyone. In the last few weeks I have involved myself on the forum a lot more then I previously did and trading was a lot more fun/enjoyable/interesting and I felt like I was making real progress towards becoming a better trader.

A word of caution about following along with those that are calling trades
Both the main spoo thread and Big Mikes thread trades are called. I think there is real value in reading along as you can gain so much from watching them trade and possibly see something you missed. But only after you have placed your own trade. At the end of the day you have to take 100% responsibility for your own trades and you want to be placing your trades because of the reasons YOU have decided on.

So what am I going to do from here?
I actually am a firm believer in trading. No other business is quite like it when it comes to the possible rewards. However what I am currently doing is clearly not working enough. Even being up a few thousand dollars in the last few months is quite simply not enough to meet my goals. At some point for me the realization struck: I would be better off going and working at a job, saving the money up to have the ability to weather drawdowns without having to freak out over every point. And having the account size to comfortably trade multiple contracts and trade multiple instruments I believe is worthwhile working for.

I would be better off (and my future family on a much safer path) if I work for even 2-3 years to save up the money required for this. I am lucky to have an absolutely awesome wife who is committed to living a lifestyle off of just her income so that we can aggressively save money. I do not want her/our sacrifice to be in vain.

Because I do not want to leave the markets completely the next step my trading will take is looking at swing trading etfs/stocks. I am very interested in forex markets and maybe will try and start a journal about FX swing trading here on futures.io (formerly BMT).

So when I run my risk / reward for stopping trading as I currently am doing– worst thing that can happen is that I get a job and over the next two to 3 years put away somewhere between 80-120k while continuing to swing trade smaller size on forex / etfs / stocks. Best thing that can happen: Swing trading works out spectacularly and that takes off while I also have a career and family. The point of this post isn’t really to talk about the areas where I can improve but trading something with less leverage and practicing holding for days / weeks / months I think can only improve my trading.

Whereas if I just decided to try and keep trading the worst thing that could happen would be that I blow my account and have nothing to fall back on (which was not a big deal when I was single, much bigger now that I am married ) Best thing that happens is that trading works out spectacularly and I have a career and family.

I hope this in some small way helps you and my best wishes to you as you go about your trading career.

Edit - adding one thing

The passage of time

If you are like me and got into futures trading as your introduction to the markets I would think LONG and HARD about starting trading by day trading. The first trade I ever did for real money I was in the market for a matter of minutes, had a stress reaction in my body, got out. Repeated process. I was so concerned about having to make money that I was not able to just rationally look at the markets. My story is that I moved from Canada to close to Washington DC and gave myself a 6 month time frame to learn enough about the markets and start trading. I have no doubt that most of you are smarter then I am. But for me I can say without a doubt this was not enough.

The last few years I have swing traded - holding for up to months at at time. There are days that go by where I literally dont bother to check charts I forget I am in a trade. Getting into a trade that is going your way, adding to your winners, giving the market time to do its thing is a incredible learning experience that I wish I had had before trying to day trade.

The reality is that all things of value take time. There is incredible value in the markets, putting yourself in a place where you can learn about the markets over a number of years rather then forcing yourself into a short time frame to have to make money is an experience that now that I am having it I can say with certainty that it is worth it.

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Excellent post sir, and excellent decision making on your part!

I have stickied this thread so hopefully it's easier for more people to find.

Best of luck on the new ventures, hope to continue to see you around every now and then... Both futures.io (formerly BMT) and the market will be here when you are ready to return.

Mike

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Thanks @Big Mike, I am going to hold you too your word that futures.io (formerly BMT) will be here when I am fully ready to come back.

But when I figure out what I want to do swing trading wise I will start a journal for that. Like I said, perhaps my biggest regret was that I didn't involve myself in the community more during the last couple years!

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DeadCatBounced View Post
Thanks @Big Mike, I am going to hold you too your word that futures.io (formerly BMT) will be here when I am fully ready to come back.

But when I figure out what I want to do swing trading wise I will start a journal for that. Like I said, perhaps my biggest regret was that I didn't involve myself in the community more during the last couple years!

We'll be here. And I admire your courage to recognize when something isn't working, and let it be for the benefit of your family even it means leaving something behind that means a lot to you personally. I think it's a smart decision, and I think you'll be in better shape in the future to be able to return to trading at some point.

Mike

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Hi deadcatbounce,

I admire your courage to come out and tell us what you learnt, and the difficulties you faced.
Taking a break for other things like starting a family seems sensible, and actually sounds like time better well spent.

My only query is, do you think saving 100 K, and then starting up 3 years from now full on again ( as apposed to swing trading with a small account) is going to protect you from your own trading ability? I mean, are you going
to trade much larger because you have all that money? I only ask because I've heard this argument before that you should only trade what you can afford to lose right? But it's actually not true is it? You work hard for all your money,
it takes time and effort. How can we say it's risk capital then. Also, as futures traders, part of the benefit is the high leverage which have access to. You probably won't need 100K to trade the size you want to anyway in 3 years when you get started again. The margin is much smaller as we all know. You're better off buying a home with that money ( or as much towards etc).....If you then get a line of credit of say 20-40 K to trade with, how is it any different really than trading the cash? The first you get charged low interest on and it's tax deductible (at least in Australia) assuming you're a good trader and make reasonable profits. The other you forgo some tiny interest payments ( big deal). Either way, if you lose the dosh, you lose it - it doesn't matter where you access the funds from in reality. If you accumulate a debt, how is that different than losing cash? The same amount of money is lost ( psychologically you have just fooled yourself into thinking it's 'risk' capital and therefore worth less to you mysteriously etc)......anyway, this is just my opinion and probably sounds like crazy talk but this is just what I think. Feel free to argue to the contrary.
Also, If you are tired, burnt out, and unable to do the analysis and hard work to be full on trader - fair enough. I've taken breaks for years myself. On the other hand, if it is merely out of frustration at not being able to make it happen - all the time off in the work won't change that fact. You are just putting off doing what you really wish to do, and as you have said, the risk of losing many accounts and sweat and tears etc is far outweighed by what you can give back to yourself and family in potential profits. After all , many of us are here because we are attempting to escape the usual formula of success out there, and slight pay raises aren't going to cut it in terms of changing our lifestyle and living the dream right? All that said, family comes first, and security for them is far more important a consideration. But is there any real reason you can't trade a small account and keep working hard at the method you will use when you wish to start up again properly in 3 years time? In my books, it could be seen as opportunity lost, and you can look back then - in hindsight, and actually thank yourself for making a commitment to not give in so easily. But I'm all for a break, but 3 years? That's a long time.....just my opinion, and we are all free to do what we please of course.....
This is my first post, I am by no means successful yet, and I have been at it longer than you probably....like Mike and many others I have blown some large accounts....during the GFC I was selling Puts.....imagine that ! Needless to say, I took a break of years afterwards.....my only regret was that I didn't get started up sooner....it may have shorted my learning curve today, and believe me, you don't stay young and energetic your whole life.....its harder for me now at my age
SO by all means - do what you must to get fresh again......but maybe consider the length of time. Being under-capitalized is almost a universal problem for early trading careers, and have a good stake is necessary, but just consider in practical terms how much you really need to trade the size you wish.....grow that small account up steadily using smaller contracts? you'll feel better trading the markets money anyway rather than your hard earned stuff better put towards the new family........opinions, just opinions.......

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Zentrader2010 View Post
Hi deadcatbounce,

I admire your courage to come out and tell us what you learnt, and the difficulties you faced.
Taking a break for other things like starting a family seems sensible, and actually sounds like time better well spent.

My only query is, do you think saving 100 K, and then starting up 3 years from now full on again ( as apposed to swing trading with a small account) is going to protect you from your own trading ability? I mean, are you going
to trade much larger because you have all that money? I only ask because I've heard this argument before that you should only trade what you can afford to lose right? But it's actually not true is it? You work hard for all your money,
it takes time and effort. How can we say it's risk capital then. Also, as futures traders, part of the benefit is the high leverage which have access to. You probably won't need 100K to trade the size you want to anyway in 3 years when you get started again. The margin is much smaller as we all know. You're better off buying a home with that money ( or as much towards etc).....If you then get a line of credit of say 20-40 K to trade with, how is it any different really than trading the cash? The first you get charged low interest on and it's tax deductible (at least in Australia) assuming you're a good trader and make reasonable profits. The other you forgo some tiny interest payments ( big deal). Either way, if you lose the dosh, you lose it - it doesn't matter where you access the funds from in reality. If you accumulate a debt, how is that different than losing cash? The same amount of money is lost ( psychologically you have just fooled yourself into thinking it's 'risk' capital and therefore worth less to you mysteriously etc)......anyway, this is just my opinion and probably sounds like crazy talk but this is just what I think. Feel free to argue to the contrary.
Also, If you are tired, burnt out, and unable to do the analysis and hard work to be full on trader - fair enough. I've taken breaks for years myself. On the other hand, if it is merely out of frustration at not being able to make it happen - all the time off in the work won't change that fact. You are just putting off doing what you really wish to do, and as you have said, the risk of losing many accounts and sweat and tears etc is far outweighed by what you can give back to yourself and family in potential profits. After all , many of us are here because we are attempting to escape the usual formula of success out there, and slight pay raises aren't going to cut it in terms of changing our lifestyle and living the dream right? All that said, family comes first, and security for them is far more important a consideration. But is there any real reason you can't trade a small account and keep working hard at the method you will use when you wish to start up again properly in 3 years time? In my books, it could be seen as opportunity lost, and you can look back then - in hindsight, and actually thank yourself for making a commitment to not give in so easily. But I'm all for a break, but 3 years? That's a long time.....just my opinion, and we are all free to do what we please of course.....
This is my first post, I am by no means successful yet, and I have been at it longer than you probably....like Mike and many others I have blown some large accounts....during the GFC I was selling Puts.....imagine that ! Needless to say, I took a break of years afterwards.....my only regret was that I didn't get started up sooner....it may have shorted my learning curve today, and believe me, you don't stay young and energetic your whole life.....its harder for me now at my age
SO by all means - do what you must to get fresh again......but maybe consider the length of time. Being under-capitalized is almost a universal problem for early trading careers, and have a good stake is necessary, but just consider in practical terms how much you really need to trade the size you wish.....grow that small account up steadily using smaller contracts? you'll feel better trading the markets money anyway rather than your hard earned stuff better put towards the new family........opinions, just opinions.......


This was near the end of my post:
"So what am I going to do from here?... Because I do not want to leave the markets completely the next step my trading will take is looking at swing trading etfs/stocks. I am very interested in forex markets and maybe will try and start a journal about FX swing trading here on futures.io (formerly BMT)."

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@DeadCatBounced you mentioned listening to people who know more than you.

From what I've witnessed on the forum for the last 6 years, this is an area where a lot of people struggle greatly. I think the problem is on two fronts.

First, some people simply like to discover things on their own. I am one of these people. You can tell me something, but I learn best by doing it for myself, discovering things in my own way and pace and without some preconceived notion that the educator is teaching me.

Second, some people want to have their hands held, and told everything (more or less, exact opposite of me, and above). For these people, how do they know who to trust? The trading business landscape is full of sharks that prey on rookies and inexperienced users, and teaching them useless and ridiculous stuff.

There are hundreds of examples here on FIO where users reply to a specific Vendor Review thread that contains a great deal of negative input about that vendor, and yet they'll ask "so is anyone using this guy recently?" --- seemingly ignoring all the existing evidence.

This occurs with great frequency. People want to believe, and will discount anything that doesn't conform to what they want to hear.

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  #9 (permalink)
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Big Mike View Post
@DeadCatBounced you mentioned listening to people who know more than you.

From what I've witnessed on the forum for the last 6 years, this is an area where a lot of people struggle greatly. I think the problem is on two fronts.

First, some people simply like to discover things on their own. I am one of these people. You can tell me something, but I learn best by doing it for myself, discovering things in my own way and pace and without some preconceived notion that the educator is teaching me.

Second, some people want to have their hands held, and told everything (more or less, exact opposite of me, and above). For these people, how do they know who to trust? The trading business landscape is full of sharks that prey on rookies and inexperienced users, and teaching them useless and ridiculous stuff.


Yeah, I also tend to fall strongly into the first category. I think this goes back to the way I went through school - I was home-schooled through roughly two thirds of grades 1-9 due to my family travelling overseas. By the time I went to high school I firmly believed I could learn on my own faster and better then what the teacher was teaching.

When I first got started in trading I had an experience with a vendor - ironically it didn't cost me anything but I feel I learned many thousands of dollars worth of education from it! Quite simply a guy I met wanted me to help build his website / run his email for him and in return he would teach me his "system". It took me about 1 month of watching this guy and tracking his results to realize that he wasn't making any money from his trading and wanted to make money from teaching people how to trade....

After being on the inside of that it was easy for me to just automatically discount all other vendors. Maybe I am being too harsh and there are good vendors out there I just automatically have assumed the worst. Part of why I have loved FIO(yes I typed BMT first hah) is that the information in webinars is just sitting there for you to take in at your own pace, AND if you have the time to go through peoples journals and see the result of many common ideas being played out... It is fairly easy to take away what works, doesnt work.


Big Mike View Post
There are hundreds of examples here on FIO where users reply to a specific Vendor Review thread that contains a great deal of negative input about that vendor, and yet they'll ask "so is anyone using this guy recently?" --- seemingly ignoring all the existing evidence.

This occurs with great frequency. People want to believe, and will discount anything that doesn't conform to what they want to hear.

Mike

Yeah I see this as well and it seems insane to me.

I probably should take the time to respond more in-depth to @Zentrader2010.

Two points I guess. 1. I think there has been many tons of electronic ink spent on this forum about the psychological effects of trading an over leveraged account. Mortgaging an asset I have already just to have a larger account to work with I do not think would make that psychological pressure any easier.

2. I completely disagree with mortgaging a house / business / whatever the asset may be to provide funds for trading. Being in my late 20's and newly married I think it is important to place myself on a path towards financial success. My wife and I do have a house that we are slowly renovating (I did alot of work on it while we were engaged). For me to reach my financial goals I want to go about it in a number of different paths. Buying a house and not paying rent is one way to put money back in my own pocket.

Taking a 2nd mortgage on the house to finance trading related goals is simply too risky and not a path I am willing to do (My wife actually brought this up just so we could talk about it but neither of us want to do this.)

Saving up $100k for example there are a few other financial goals that would go along with it. We have a small business idea that needs startup capital. Both of us come from families that have done reasonably well flipping houses / gaining rental income etc, I am handy enough to do the work on these types of projects. I guess what I am saying is that I am at a point where I want to put a number of different seeds into the ground and lets see what comes up. Mortgaging an asset to double down on trading isn't something that I am comfortable with.

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I'd probably give up trading altogether if it meant I had a loving wife. You really are lucky and that's how you have to see it. You should try to spend as much time with her as possible and ways to make her happy because that's value and a long term investment of itself. Trading is not only something you do financially, but it's a lifestyle of evaluating maximum efficiency in all areas of life. Sometimes that means putting it on the back burner. I have firm confidence that you'll never give up trading completely, because like some people, you're a point where you see the potential and that's not something you can easily forget.

R.I.P. Joseph Bach (Itchymoku), 1987-2018.
Please visit this thread for more information.
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Itchymoku View Post
I'd probably give up trading altogether if it meant I had a loving wife.

Damn Itchy, that's deep.



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Damn Itchy, that's deep.



Mike

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  #13 (permalink)
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DeadCatBounced View Post
Yeah, I also tend to fall strongly into the first category. I think this goes back to the way I went through school - I was home-schooled through roughly two thirds of grades 1-9 due to my family travelling overseas. By the time I went to high school I firmly believed I could learn on my own faster and better then what the teacher was teaching.

When I first got started in trading I had an experience with a vendor - ironically it didn't cost me anything but I feel I learned many thousands of dollars worth of education from it! Quite simply a guy I met wanted me to help build his website / run his email for him and in return he would teach me his "system". It took me about 1 month of watching this guy and tracking his results to realize that he wasn't making any money from his trading and wanted to make money from teaching people how to trade....

After being on the inside of that it was easy for me to just automatically discount all other vendors. Maybe I am being too harsh and there are good vendors out there I just automatically have assumed the worst. Part of why I have loved FIO(yes I typed BMT first hah) is that the information in webinars is just sitting there for you to take in at your own pace, AND if you have the time to go through peoples journals and see the result of many common ideas being played out... It is fairly easy to take away what works, doesnt work.



Yeah I see this as well and it seems insane to me.

I probably should take the time to respond more in-depth to @Zentrader2010.

Two points I guess. 1. I think there has been many tons of electronic ink spent on this forum about the psychological effects of trading an over leveraged account. Mortgaging an asset I have already just to have a larger account to work with I do not think would make that psychological pressure any easier.

2. I completely disagree with mortgaging a house / business / whatever the asset may be to provide funds for trading. Being in my late 20's and newly married I think it is important to place myself on a path towards financial success. My wife and I do have a house that we are slowly renovating (I did alot of work on it while we were engaged). For me to reach my financial goals I want to go about it in a number of different paths. Buying a house and not paying rent is one way to put money back in my own pocket.

Taking a 2nd mortgage on the house to finance trading related goals is simply too risky and not a path I am willing to do (My wife actually brought this up just so we could talk about it but neither of us want to do this.)

Saving up $100k for example there are a few other financial goals that would go along with it. We have a small business idea that needs startup capital. Both of us come from families that have done reasonably well flipping houses / gaining rental income etc, I am handy enough to do the work on these types of projects. I guess what I am saying is that I am at a point where I want to put a number of different seeds into the ground and lets see what comes up. Mortgaging an asset to double down on trading isn't something that I am comfortable with.

Hi,
I'm not sure you've really thought this through properly....I mean, I've been there and done it so to speak being 20 years your senior...however my marriage ended in divorce so perhaps my dedication to trading made her an 'internet widow'
Anyway - What is the real practical difference between
a) having a mortgage and putting all your spare earnings into it to pay it down faster or
b) paying what your bank expects you to pay in the 20 year repayments every month, and saving your 100 K cash aside in a separate account.
They only difference is that in example a) you just re-withdraw the 100K and start paying some interest whilst you use it trading....compared to b) you have NOT placed this 100K against your mortgage account so you have not payed down the monthly interest expense in favor of cash account interest (Why it's lower?) so you end up paying more interest anyway, and you are actually doing exactly the same thing ( think carefully about it)....
If you've ever traded options, you know that in the options formula, the interest money you are saving when you buy a call option rather than the outright stock ( A lot more $$$$) is charged to you via the options premium anyway.....no such thing as a free lunch buddy.....so you're not really saving your mortgage by not paying towards it in favor of an off-set account......
SO???? a) and b ) are equiv. in practical money terms why do you FEEL better doing b)??? YOu're just choosing to delay paying down a) anyway which is not actually sensible because you pay the bank more interest over time.
So just trade your line of credit......it's better actually because if trading becomes your business the interest becomes a tax deductible expense and you save about 30c in the $1 compared to version b) where you pay tax on interest earned......
Regards,
One whose done exactly what you did, but just payed down my mortgage and got a line of credit rather than keep it in cash ( same difference as you now owe the bank more via the mortgage anyway da da da )....

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  #14 (permalink)
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I wonder how many people on this site that need to face the fact that they need to stop trading. My last trade was in January of this year. I was attempting to make a living in the futures market and nearly lost everything in the process. There was nothing wrong with my method. Nearly every mistake was a mental error--pure psychology. I traded a minimum of 5 contracts and as much as 40. I can't count the number of times I had to re-fund my account.

I do plan to return to trading one day. I still paper trade (very successfully), but now I am working full time to rebuild my savings. My top 7 learnings are:

1. Master support and resistance
2. Limit indicators to the bare minimum
3. Stay away from short time intervals and use the dominate one for the market your are trading
4. Control your emotions
5. Be very patient and let the market come to you
6. Maintain a detailed journal
7. Learn when to stop trading short term and permanently ( I should have stopped much sooner).

I firmly believe there are, relatively, a small group of traders that can make a good living trading interday futures. I was not one of them. Are you?

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WISDOM View Post
I wonder how many people on this site that need to face the fact that they need to stop trading. My last trade was in January of this year. I was attempting to make a living in the futures market and nearly lost everything in the process. There was nothing wrong with my method. Nearly every mistake was a mental error--pure psychology. I traded a minimum of 5 contracts and as much as 40. I can't count the number of times I had to re-fund my account.

I do plan to return to trading one day. I still paper trade (very successfully), but now I am working full time to rebuild my savings. My top 7 learnings are:

1. Master support and resistance
2. Limit indicators to the bare minimum
3. Stay away from short time intervals and use the dominate one for the market your are trading
4. Control your emotions
5. Be very patient and let the market come to you
6. Maintain a detailed journal
7. Learn when to stop trading short term and permanently ( I should have stopped much sooner).

I firmly believe there are, relatively, a small group of traders that can make a good living trading interday futures. I was not one of them. Are you?

I applaud you for your decision, and your courage to post. You may wish to cross-post your story here, to reach more people:



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  #16 (permalink)
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Great list. Thanks!

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  #17 (permalink)
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The first poster Dead Cat Bounced is a beautiful sharing. I want to thank you for the entire posting.

I am new here just joined. have to find my way around.

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  #18 (permalink)
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WISDOM View Post
I wonder how many people on this site that need to face the fact that they need to stop trading. My last trade was in January of this year. I was attempting to make a living in the futures market and nearly lost everything in the process. There was nothing wrong with my method. Nearly every mistake was a mental error--pure psychology. I traded a minimum of 5 contracts and as much as 40. I can't count the number of times I had to re-fund my account.

I do plan to return to trading one day. I still paper trade (very successfully), but now I am working full time to rebuild my savings. My top 7 learnings are:

1. Master support and resistance
2. Limit indicators to the bare minimum
3. Stay away from short time intervals and use the dominate one for the market your are trading
4. Control your emotions
5. Be very patient and let the market come to you
6. Maintain a detailed journal
7. Learn when to stop trading short term and permanently ( I should have stopped much sooner).

I firmly believe there are, relatively, a small group of traders that can make a good living trading interday futures. I was not one of them. Are you?

Stopping trading is not an easy thing to do. I believe it takes courage to admit to ones self when something is simply not working out. The best thing you can do is realize that before you are at complete rock bottom. Trading is an extremely difficult thing to do. My best analogy of trading would be like trying to solve an algorithm equation while in a boxing ring trying to keep from getting punched in the face.
The emotional ups and downs associated with risk take an enormous toll on a persons psychological well being. I believe it takes a certain mindset and personality to succeed at this game, but that said, I also believe that anyone can change themselves into that mindset and personality to succeed. Those who are unwilling to change are the ones who trade until they are out of money and then leave. The successful ones force themselves into the mentality it takes willing to learn what they need to survive.
I applaud you for doing what you believe is the responsible decision for your life. There are those that go until they have gone completely broke, or worse yet in debt that will take a lifetime to recover from. This is the gambling mentality and the sad parallel between risk taking in a controlled way and rolling the dice with an addictive context.

Best of luck in your future endeavors!

-D

“Success is a journey, not a destination. The doing is often more important than the outcome.”
-Arthur Ashe
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Ok, I know the title is pretentious but it sounds good. They aren't set in stone. I've considered adding one or two. Those changes tend to fit somewhere within one of these.

I've learned these through hard-knocks, learning what successful traders do, and learning about trading psychology. I think they are important enough to warrant being on a list. You may disagree with one or more of these. That's fine. There are many ways to make money in the markets. Some people can trade off news announcements. I haven't been very successful doing it so I avoid it. Also, I like automated trading. It fits my disposition and I don't like sitting in front of the screen twitching on every entry and exit signal and going through the emotional ups and downs as the trade evolves. My confidence in the strategy allows me to put the mouse down and walk away to enjoy time with family.

** Trading 10 Commandments
1 Trading is your business not your hobby.
2 Have rules to enter and exit a trade before you enter.
3 Don’t risk more than you are willing to lose.
4 Develop confidence in your system with backtesting.
5 Don’t trade in anger, to get even, or in fear.
6 Don’t trade off news.
7 Don’t micromanage your trades.
8 Know your trading tools.
9 Keep physically and mentally fit.
10 Read these commandments each trading day.

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After years of trading, I wish I have never tried day trading futures. I have tried every method I know, trend following, band trading, volatility breakout, mean reversion in stock index, bond and currency futures. I would be lucky if I could get a break even month. Too many adverse factors in day trading.

Random direction - The intraday direction is difficult to predict even taking into account the higher time frame of daily and hourly chart. The intraday momentum direction can change suddenly without any warning sign.
Random magnitude of move - The magnitude of each move is difficult to predict. Occasionally the market may give a nice trend, but most intraday moves are short and choppy. Easily lost what I have gained in a few choppy moves. Hardly justify the risk involved. In some trades, I need to risk a dollar for reward of one dollar. Very bad risk to reward ratio.
Intraday stop hunting - Because of the limited profit potential in day trading, I cannot set a wide stop. Too many times the market stopped me out before it makes a big move.

Swing trading the daily charts of stocks are much easier, but it requires more capital to trade the stock daily charts. Do not put all eggs in one basket. Money management is important in each trade to limit your lost if you are wrong. My advise to beginner is that do not begin trading with trading the intraday time frames which are the most difficult and competitive field in trading business. Trust me. It looks easy but it is actually very difficult to be profitable in long run. Save enough money to do the daily charts of stocks which is profitable and less stressful.

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Posts like this one is exactly why i love sites like this one.
Even though i went through many useless (sorry..) posts and reviews, it was worth it to get to this one.
very helpful and nice of you to share so thanks !

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WISDOM View Post
I wonder how many people on this site that need to face the fact that they need to stop trading. My last trade was in January of this year. I was attempting to make a living in the futures market and nearly lost everything in the process. There was nothing wrong with my method. Nearly every mistake was a mental error--pure psychology. I traded a minimum of 5 contracts and as much as 40. I can't count the number of times I had to re-fund my account.

I do plan to return to trading one day. I still paper trade (very successfully), but now I am working full time to rebuild my savings. My top 7 learnings are:

1. Master support and resistance
2. Limit indicators to the bare minimum
3. Stay away from short time intervals and use the dominate one for the market your are trading
4. Control your emotions
5. Be very patient and let the market come to you
6. Maintain a detailed journal
7. Learn when to stop trading short term and permanently ( I should have stopped much sooner).

I firmly believe there are, relatively, a small group of traders that can make a good living trading interday futures. I was not one of them. Are you?

Great advice, especially the parts about support and resistance and waiting for the market to come to you. Too many people, including myself, have wasted years trying to find the elusive final high or low to get on board with a big win. The reality is, like you say, to master S and R, and when you do, you will be comfortable taking trades that come to you rather than chasing them. For too long I thought that if a trade was taken at the high or the low then they weren't worth having. I stand corrected. Good luck to you. I'm by no means the finished product and am working on the psychological aspects. Can highly recommend a book called The Trading Athlete.

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  #23 (permalink)
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WISDOM View Post
........... I still paper trade (very successfully).............

Isn't it amazing how we can make tons of money on SIM, and then suck when it's live? I'm a millionaire on SIM..............LOL

“Success is a journey, not a destination. The doing is often more important than the outcome.”
-Arthur Ashe
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  #24 (permalink)
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I am new to this site and it was interesting to read through your experience. I spent the better part of 8 years trying a new idea/indicator and realizing that it really did not really work. Leaving and doing something else only to be drawn back with a new idea/indicator. I lost count of the number of iterations I went through for that but at the end of it I was wiser (and financially poorer) for it. Being one not to give up on something I persisted and now live a comfortable life trading. There are many many ways to trade and it took me a while to find my way. I guess you know when you are there because you can see the trades forming. As someone referenced above wait for the trade to come to you. I would also add not to chase trades as well and if something does look wrong it probably is. Better to let a trade go than having to fight to get out of it.

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  #25 (permalink)
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@bbgg91 If I can ask what do u trade now and what method did u finally settle on?

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melbourne, australia
 
 
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jokertrader : I only trade indices primarily the aussie, dax and sometimes ftse. I trade via cfd's of these indices. For me I have removed every indicator except BB and use price movement in reference to them to find trades. If you watch markets long enough different price patterns repeat and you have to understand what you are trading. Some are barges but some are Ferraris and you have to adjust what you do accordingly. I do not place manual stops and use fixed size limits for exits. I will average down on loosing trades and have a system in place which takes care of that (many will disagree but works for me). I only trade during market hrs for each of the indices. Overnight gaps can kill you. I have made it as simple as possible. I found the more rules you have the more that can go wrong.

I will just reiterate... understand what you are trading and find a time interval that suites you.

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  #27 (permalink)
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why CFDs vs futures?

I thought technical indicators are more accurate on futures.. but i can see u only use a BB
I thought larger spreads on CFDs and not as transparent

of course smaller in size

Yes noted your advice. i am trying to stick to only CL and 6A

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  #28 (permalink)
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CFD's offer a better use of capital. Margin requirements are so much smaller so I do not need a large trading account for the same return. Some people prefer to use futures which is ok also. CFD spreads are more or less the same as the futures contracts in market hrs. In regards to transparency, it is really not an issue for me as they have to track the underlying futures contract and 99.999% of the time they do.

It helps to understand the maths behind each indicator so it gives you a better understanding of what it is doing and why. Technical indicators are not more accurate on futures but relating what they are showing you to price action is critical.

Also I found that any system/rules you make should be time independent. That is what works on a 2min chart should also work on a 1 day chart. The only thing that will change is volatility.

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  #29 (permalink)
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DeadCatBounced View Post
Two and a half years ago I was completely new to trading. Through a family friend I became acquainted with the futures market. Seeing how much the markets move and the opportunity that it represented I felt that it would be worth a shot to try trading. I was single, graduated from college, no debt and some money saved up.

...

@DeadCatBounced, I applaud your decision . The first step to solving a problem is recognizing there is one and acting on it. You have done that. I am sure that when you come back, you will be equipped with a better approach towards trading the markets.

While much of what you said about wishing what you would have known when you started is true, I am sure you realize that this is a never ending cycle. If you had the money, you would have gotten married AND kept going at your quest to become a consistently profitable trader and 2 more years down the line, you would have added a few more things to your wishlist (and maybe removed a couple) and then a few more things a couple of more years later. And your greatest enemy will remain yourself because that is also a fight that is seemingly never ending. My point is that the learning and adapting, the struggle to better yourself never ends BUT at some point it becomes economically feasible. That is point you need to get to when you come back.

Good luck!

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jokertrader View Post
why CFDs vs futures?

I thought technical indicators are more accurate on futures.. but i can see u only use a BB
I thought larger spreads on CFDs and not as transparent

of course smaller in size

Yes noted your advice. i am trying to stick to only CL and 6A

The effectiveness of any indicator, systems or analysis relies on the liquidity of the underlying asset.
Therefore no one can conclusively say that CFD are better, or futures are better for analysis.

Having said that, CFDs rely heavily on their liquidity Provider (LP) and as such could be priced and traded differently between LPs. CFDs are not contracts that are permissible to US retail traders.

Matt Z
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There is a risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #31 (permalink)
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I know I can't be the only one, but I'm definitely one of those guys that went through the vast majority of indicators out there.

Started out with the rsi/macd/stochastic combo. Moved to bollinger bands. Moved to moving averages. Moved to ichimoku. I think you can see a trend here... lol

Basically hopping from one system to the next breaking every rule in the book.

If I could go back in time I would tell myself to study s/r, money management, and strictly price action. No indicators whatsoever.

But then again, back then who knows what I would have done with that info. Trading is something where I feel you need to make all the mistakes you can to carve yourself into the trader that you are meant to be.

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  #32 (permalink)
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This is a great topic - and while I'm sorry to hear you've had to hang up the trading boots I think you are an example of someone with the right mindset to find success.

I like most others have been through a variety of trading methods and am only now at a stage where I think I'm understanding that I don't need more knowledge, I need practice and the ability to build confidence in my own way of doing things.

Thanks for taking the time to make this thread - it's a testament to your character that you can share your experiences to help others despite them at present not being the desired result.

Cheers.

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  #33 (permalink)
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Wow! Thank you very much for sharing so openly @DeadCatBounced, it must take lots of courage. I have read through your original post probably three times now and learn something new every time I do.

All the best in your new endeavors and let us know how it is going. With an attitude like yours I have no doubt that you will eventually come back to trading in a big and very successful way!

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Thanks @DeadCatBounced

When I read the journals here and see where most of the posters are struggling - then your post

"Have the patience to let the market do its thing
Most large intraday swings take between 3-5 hours to complete. Somehow someway if those are the kinds of moves you are wishing to capture you have to have the ability to be patient enough to let the market do its thing: whether that is finding a part time job, some sort of hobby or something to let you do a secondary thing while still feeling productive with your time. Go download rosetta stone and learn mandarin or something.
"

is absolutely right!
A longer time frame than most of the traders are looking for is needed to get positive longtime results.
Article especially dedicated to @ratfink who knows about but can not leave this rat cave easily.

To encourage traders with 2 important points - not already mentioned in this thread:
1) TURN OFF your P&L while trading: it makes you crazy with non realized wins or losses
2) Let the market play it out: "Set and forget"-trades are the best of all! You don't need to stare at the screen - changing
eventually preset decisions. When entering a trade you should believe in your decisions and your stop loss settings.

Finally - the hint to learn a new language in your spare time while trading is great! Which trader is speaking more
than one language? Being capable of speaking several languages does wonders to your trading - PROMISED!

GFIs1

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  #35 (permalink)
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Thanks for starting this thread OP.

I just turned 31, recently married and have just started my trading endeavor/journey a few months ago.

I had been lurking for a few weeks and after reading this thread decided to join and look forward to becoming a more regular poster.

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I wish I had read more about brokers and about how to trade without losing all your money!!!

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  #37 (permalink)
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if you think of the time and money Mike has save trader from buying b.s from dishonest vendors ...it is in the millions ..it is no wonder why he gets fire, he hits them in the pocket book...and they do not like it..

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To encourage traders with 2 important points - not already mentioned in this thread:
1) TURN OFF your P&L while trading: it makes you crazy with non realized wins or losses
2) Let the market play it out: "Set and forget"-trades are the best of all! You don't need to stare at the screen - changing
eventually preset decisions. When entering a trade you should believe in your decisions and your stop loss settings.

Finally - the hint to learn a new language in your spare time while trading is great! Which trader is speaking more
than one language? Being capable of speaking several languages does wonders to your trading - PROMISED!


This is important. As a new trader this has been drilled into me by those who I look up to. Be patient, have faith in the market, that you read it correctly, and don't check your P/L every 5 minutes.. Staying in trades and collection 20-30 ticks gives you great confidence in how you read markets.

I also rarely set stops and use the market going against me to my advantage by averaging out losses - anyone have thoughts on this?

Thanks,

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  #39 (permalink)
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singer399 View Post

To encourage traders with 2 important points - not already mentioned in this thread:
1) TURN OFF your P&L while trading: it makes you crazy with non realized wins or losses
2) Let the market play it out: "Set and forget"-trades are the best of all! You don't need to stare at the screen - changing
eventually preset decisions. When entering a trade you should believe in your decisions and your stop loss settings.

Finally - the hint to learn a new language in your spare time while trading is great! Which trader is speaking more
than one language? Being capable of speaking several languages does wonders to your trading - PROMISED!


This is important. As a new trader this has been drilled into me by those who I look up to. Be patient, have faith in the market, that you read it correctly, and don't check your P/L every 5 minutes.. Staying in trades and collection 20-30 ticks gives you great confidence in how you read markets.

I also rarely set stops and use the market going against me to my advantage by averaging out losses - anyone have thoughts on this?

Thanks,

Thanks for this - just out interest where have you seen benefits from speaking a second language? I'd love to do it but haven't heard it recommended as a tool to trading before.

Kind regards,
Trambo

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  #40 (permalink)
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Trambo View Post
Thanks for this - just out interest where have you seen benefits from speaking a second language? I'd love to do it but haven't heard it recommended as a tool to trading before.

Kind regards,
Trambo

Meant to edit that out - while I am learning another language in the downtime through the day, its purely for personal reasons.. don't see how learning Armenian could help with reading the market..

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  #41 (permalink)
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Thank you @DeadCatBounced for your post. very usefull at my stage of learning.

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  #42 (permalink)
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GFIs1 View Post
Thanks @DeadCatBounced

When I read the journals here and see where most of the posters are struggling - then your post

"Have the patience to let the market do its thing
Most large intraday swings take between 3-5 hours to complete. Somehow someway if those are the kinds of moves you are wishing to capture you have to have the ability to be patient enough to let the market do its thing: whether that is finding a part time job, some sort of hobby or something to let you do a secondary thing while still feeling productive with your time. Go download rosetta stone and learn mandarin or something.
"

is absolutely right!
A longer time frame than most of the traders are looking for is needed to get positive longtime results.
Article especially dedicated to @ratfink who knows about but can not leave this rat cave easily.

To encourage traders with 2 important points - not already mentioned in this thread:
1) TURN OFF your P&L while trading: it makes you crazy with non realized wins or losses
2) Let the market play it out: "Set and forget"-trades are the best of all! You don't need to stare at the screen - changing
eventually preset decisions. When entering a trade you should believe in your decisions and your stop loss settings.

Finally - the hint to learn a new language in your spare time while trading is great! Which trader is speaking more
than one language? Being capable of speaking several languages does wonders to your trading - PROMISED!

GFIs1

Great advice. Your strategy should be set and not tampered with. Messing with your stop loss by one tick could be detrimental and change the overall outcome of your successful trades!

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  #43 (permalink)
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Trading can be the most simplistic or the hardest thing you ever do! There is so much hoopla from sales people out there. Learn this indicator, trade this candlestick pattern, put this on your chart...blah blah blah. Your pulled in so many directions especially when you start losing trades and start to blame your losses on the specific indicator and then what do you do?? You switch the indicator or strategy and lose more! lol If only that new trader would listen and just stick to one of the thousands of strategies out there and live by this little piece of advice. "YOU WILL LOSE MONEY, BUT IF YOU STICK TO YOUR STRATEGY, YOU WILL WIN OVER TIME!" "MITIGATE RISK" "DON'T TRADE MORE THAN YOU CAN AFFORD TO LOSE"

By the way, this was me! Everyone needs an epiphany.

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  #44 (permalink)
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@DeadCatBounced - Great analysis of your personal situation. Shows you have a good handle on the core concepts of successful trading which also go well with those in leading a successful life. Props to you and your post and those that have contributed to it.

I've been taking my time entering the futures trading world. I believe this time will be looked back on by me as being well spent regardless of the outcome. I agree with everyone on the KISS method. Observation has been massively helpful in my progress and will continue to be. S/R and longer time frame are 2 key points already mentioned. You will do yourself a lot of good observing and learning these 2 things alone. Beyond that, Risk always comes before Reward. These are the things that have helped me put the markets into perspective.

Happiness and Success to all!

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Thanks for the info man.

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I wish I would have known the pressures that come with bringing your family on this journey with you.

-OneUpTrader
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  #47 (permalink)
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singer399 View Post

To encourage traders with 2 important points - not already mentioned in this thread:
1) TURN OFF your P&L while trading: it makes you crazy with non realized wins or losses
2) Let the market play it out: "Set and forget"-trades are the best of all! You don't need to stare at the screen - changing
eventually preset decisions. When entering a trade you should believe in your decisions and your stop loss settings.

Finally - the hint to learn a new language in your spare time while trading is great! Which trader is speaking more
than one language? Being capable of speaking several languages does wonders to your trading - PROMISED!


This is important. As a new trader this has been drilled into me by those who I look up to. Be patient, have faith in the market, that you read it correctly, and don't check your P/L every 5 minutes.. Staying in trades and collection 20-30 ticks gives you great confidence in how you read markets.

I also rarely set stops and use the market going against me to my advantage by averaging out losses - anyone have thoughts on this?

Thanks,

Singer399 - I taught myself averaging out of losses when I was learning the ropes in Sim, but that is how I blew out my real-money account the first time. I changed my habits by waiting for the next S/R region before entering the trade a second time and that's how I blew out my account the second time.
Can you describe how you've made averaging out of your losses work for you?

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  #48 (permalink)
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CinderellaMan View Post
I wish I would have known the pressures that come with bringing your family on this journey with you.

Indeed, it puts a lot of pressure on the people around you!

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  #49 (permalink)
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DeadCatBounced View Post
This was near the end of my post:
"So what am I going to do from here?... Because I do not want to leave the markets completely the next step my trading will take is looking at swing trading etfs/stocks. I am very interested in forex markets and maybe will try and start a journal about FX swing trading here on futures.io (formerly BMT)."

Nice post. there is a lot to be learned from all that you said. I have one suggestion you might want to consider. If you wish to swing trade ETFs you may want to consider options. Depending on the options technique used it can be much safer for swing trading.

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  #50 (permalink)
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Appreciate those replies to beginers like me, learned a lot. Thank you!

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  #51 (permalink)
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When we first start either through ourself, or a live room or a mentor or etc....
we have the urge to trade NOW. to some money.
but one thing i have learn throughout the years if that a big portion of room/mentor/etc are probably scammers. or suffice to say that in most case not a ticket to make money 'that soon'.

So, the lesson here is. UNTIL you can make consistent returns for 3,6,9.... months on sim/demo account. DO NOT trade live. Or if you wanna trade live as forward testing instead of demo, make sure that amount per trade is very very very low. even with 20x-40x losses u do not feel it.

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  #52 (permalink)
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i wish someone would have told me, that lagging indicators are useless in my trading and with them i will only loose money

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I wish that when I started I knew the difference between risk and uncertainty. This may have helped in other areas besides trading as well.

Matt Z
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Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #54 (permalink)
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mattz View Post
I wish that when I started I knew the difference between risk and uncertainty. This may have helped in other areas besides trading as well.

Matt Z
Optimus Futures

This intrigues me.

Can you elaborate on the difference between the two, and the implications for a novice trader? I gather from the postings of others that patience and risk/money management are of the utmost importance for consistent success, and it sounds like you have some insight into the latter. Perhaps a lesson hard learned on your part that others could avoid.

Thanks in advance,
BC

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musickbc View Post
This intrigues me.

Can you elaborate on the difference between the two, and the implications for a novice trader? I gather from the postings of others that patience and risk/money management are of the utmost importance for consistent success, and it sounds like you have some insight into the latter. Perhaps a lesson hard learned on your part that others could avoid.

Thanks in advance,
BC

The concept of risk and uncertainty are both related to psychology and stats. But, if I had to put it in a nutshell, I would say that Risk is a quantified with negative and positive outcomes. Uncertainty is a bunch of variables that could not be quantified to arrive at a decision in terms of risk and reward.

I have learned over the years to think of the positive and negative outcomes of my decisions while considering the variables I am given. In my opinion, it is the conservative approach and also a simple approach to evaluate things.
This is what most people should adopt especally when it comes to trading. (However, IMO, uncertainty has a way higher payoff because it entails a higher risk. This approach should be adopted only by experienced decision makers and experienced traders).

As a beginner trader, you should know what variables are needed to reduce risk and increase reward.
Therefore, simple methods with a few variables are better for trade evaluation than a "collage" of indicators that move you to uncertainty.

I hope this helps.

Matt Z
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Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #56 (permalink)
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mattz View Post
(However, IMO, uncertainty has a way higher payoff because it entails a higher risk. This approach should be adopted only by experienced decision makers and experienced traders).

Matt Z
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There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.


agree. Pysco plays a big part. Yes perhaps a slightly higher degree of risk (but could be controlled risk if having rules)......but that's where the asymmetric payoff's in trading come into play.

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  #57 (permalink)
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paps View Post
agree. Pysco plays a big part. Yes perhaps a slightly higher degree of risk (but could be controlled risk if having rules)......but that's where the asymmetric payoff's in trading come into play.

Taking decisions with uncertainty could be taken if the person's DNA has a higher appetite for risk.
But, uncertainty itself does not have control or risk variables, if it did, it would be calculated risk, and that is precisely why it has a substantially higher asymmetric reward.

I know some chose to make fun of Donald Rumsfeld when he said the below, but he captured the essence of risk and uncertainty.
"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

The "unknown unknowns" is the uncertainty.



Matt Z
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Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #58 (permalink)
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I wish i understood this phrase better " Trading is about defining probability and managing possibility " To me this encapsulates the basic premise of good trading . Sadly it took me many years to really understand the need for intensive quantitative analysis to really define probability . Guessing just doesnt cut it . If you knew you didnt have positive expectancy you should stop trading , i was oblivious to my expectancy for many years and paid the price . Expectancy , win/loss , risk /return , probability curves , risk of ruin overlooked by the majority . Do this you almost have no hope of making it . Psychology has little to do with it ultimately , its all about methodology , process and trust in the process . A positive expectancy leads to a positive mindset , not the other way around ... You really need to be the ultimate critical thinker to make it in this game .

“If you can’t measure it, you probably can’t manage it… Things you measure tend to improve.”

Ed Seykota

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  #59 (permalink)
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Ozquant View Post
Psychology has little to do with it ultimately , its all about methodology , process and trust in the process . A posiive expectancy leads to a positive mindset , not the other way around ...

Important point here.

On the one hand, I would say that psychology has a huge amount to do with it, but that is because when your process doesn't work, or when you don't even have one in a defined sense, or if you don't trust it, then you're going to operate on random psychological factors: fears, doubts, overoptimism, greed, impulse trading and all the rest.

You'll say after a trade, "Why did I do that?"

Focusing on the psychological factors -- other than to be aware of them so you can stop yourself -- is looking at the effect instead of the cause. It can be important, but the cause is that you don't have a method that works and that you are willing to rely on and be consistent with.

A paradox is that there are many methods that work just fine, but individual differences in application, which may get down to personal psychological issues -- how objective are you, how dispassionate are you -- will largely determine whether they work for a given person or not....

But without a real, and repeatable, positive expectancy, nothing is really going to go well.

Bob.

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  #60 (permalink)
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mattz View Post
The concept of risk and uncertainty are both related to psychology and stats. But, if I had to put it in a nutshell, I would say that Risk is a quantified with negative and positive outcomes. Uncertainty is a bunch of variables that could not be quantified to arrive at a decision in terms of risk and reward.

I have learned over the years to think of the positive and negative outcomes of my decisions while considering the variables I am given. In my opinion, it is the conservative approach and also a simple approach to evaluate things.
This is what most people should adopt especally when it comes to trading. (However, IMO, uncertainty has a way higher payoff because it entails a higher risk. This approach should be adopted only by experienced decision makers and experienced traders).

As a beginner trader, you should know what variables are needed to reduce risk and increase reward.
Therefore, simple methods with a few variables are better for trade evaluation than a "collage" of indicators that move you to uncertainty.

I hope this helps.

Matt Z
Optimus Futures


mattz View Post
Taking decisions with uncertainty could be taken if the person's DNA has a higher appetite for risk.
But, uncertainty itself does not have control or risk variables, if it did, it would be calculated risk, and that is precisely why it has a substantially higher asymmetric reward.

I know some chose to make fun of Donald Rumsfeld when he said the below, but he captured the essence of risk and uncertainty.
"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

The "unknown unknowns" is the uncertainty.



Matt Z
Optimus Futures

It helps tremendously. Thank you for the response. So, if I am understanding it correctly, risk can be quantified while uncertainty cannot. Risk should be taken into account for every trader when making a decision, but uncertainty will require experience to get a "feel" for, and thereby incorporate into trading decisions. Does that sound close?

On a similar note, any guidance on understanding risk(s) associated with trading? For me personally, the idea of risk is somewhere between a known unknown and an unknown unknown, and is definitely something I endeavor to improve. So, a more targeted question would be "Are there any books, courses, videos, threads, etc. that you, or anyone else, could recommend?" I will be searching on this forum for any discussions around risk and how to find and quantify it, but I appreciate any guidance.

BC

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  #61 (permalink)
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I wish I would have known it sooner....never in my family have been in financial industry or taken any interest in it, we always believe on typical boring work 8-5. Would have moved to Chicago or somewhere to try my luck and learn the craft back then....my life

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  #62 (permalink)
Legendary Liquidity Hunter
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Agree, I would have gotten started much earlier in life (I said the same thing about starting my business at age 30.) I feel somewhat behind the 8 ball as it is, starting so late with so much to learn. But I'm eager and as committed as I can be.

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  #63 (permalink)
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musickbc View Post
It helps tremendously. Thank you for the response. So, if I am understanding it correctly, risk can be quantified while uncertainty cannot. Risk should be taken into account for every trader when making a decision, but uncertainty will require experience to get a "feel" for, and thereby incorporate into trading decisions. Does that sound close?

On a similar note, any guidance on understanding risk(s) associated with trading? For me personally, the idea of risk is somewhere between a known unknown and an unknown unknown, and is definitely something I endeavor to improve. So, a more targeted question would be "Are there any books, courses, videos, threads, etc. that you, or anyone else, could recommend?" I will be searching on this forum for any discussions around risk and how to find and quantify it, but I appreciate any guidance.

BC

I think you got the concept right, although it would take you years as a beginner trader to learn to quantify risk.

Also, when you use the word "feel" I am a bit uncomfortable. This is because as a beginner, you have no "feel".
As much you would like to rely on intuition, this MAY or MAY NOT come as a reliable tool even after you have experienced many cycles in the marketplace. In general, I do not like "intuition", "gut feel" and other psychological triggers when I have data. if I don't enough data, I have to rely upon intuition.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #64 (permalink)
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mattz View Post
it would be calculated risk, and that is precisely why it has a substantially higher asymmetric reward.

i re-read what you said.

Yes you hit the nail on the head. I meant calculated risk as even with the best analytics... just about anything can happen in the markets. But when Data is crystal....a true trader with analytics puts on a trade which has totally asymmetrical returns....& perhaps more so...if these are swings. Scalps may have their own nuances.

lol....i did not mean "Taking decisions with uncertainty"<< that perhaps may not be classified as trading.

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  #65 (permalink)
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Matt Z has a pretty good grasp on it. I know when I started I came from Aviation into the trading world. In Aviation everything is successful a huge percentage of the time. In trading not so much. I was probably under the impression that I could make profits in the markets as consistently as I could fly to Los Angeles while keeping risk miniscule.

I eventually learned a few things. One is to get comfortable with a higher level of calculated risk than you will find in other industries. The other is that it is not enough to have a system that works. You must believe that your system works at a deep deep level to overcome uncertainty. You can not have a bad day and go looking for some magic indicator that will fix the problem. You have to be able to have a bad day and come back tommorow and do the same trades again.

I think this is a big reason that learning to trade takes so long. This kind of confidence in your system can only be aquired with time and experience.

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  #66 (permalink)
the coin hunter
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Traderjohnsblog View Post
... You must believe that your system works at a deep deep level to overcome uncertainty. You can not have a bad day and go looking for some magic indicator that will fix the problem. You have to be able to have a bad day and come back tommorow and do the same trades again.

I think this is a big reason that learning to trade takes so long. This kind of confidence in your system can only be aquired with time and experience.

Sent using the futures.io mobile app

as a master trader used to say "You Gotta Believe"(in your indicator(s))

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  #67 (permalink)
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The same applies if your an indicator guy. You have to have invested the time to really really believe that your strategy works. Otherwise there is uncertainty and doubt.

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  #68 (permalink)
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Have a long term view of the markets. Intraday trading is tough if not impossible.

Less is more. Trade less and focus more on a few positions. I think most of us have probably not beat the overall market this year. My index funds have done better than my trading accounts.

Take a long term fundamental view of the market and base your positions around that view

Do not believe that someone is out to get you or your trading against other “professional traders” that is simply not the case and doesn’t move the market, Especially with equity and equity options

Do not believe someone that takes ridiculous over-leveraged future option positions (one main thread on here, sorry but it is the truth). There is only one outcome to trading like that.. busto.

For most trading will not bring fulfillment, have a job you love and you feel makes a difference.

Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
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  #69 (permalink)
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mattz View Post
I think you got the concept right, although it would take you years as a beginner trader to learn to quantify risk.

Also, when you use the word "feel" I am a bit uncomfortable. This is because as a beginner, you have no "feel".
As much you would like to rely on intuition, this MAY or MAY NOT come as a reliable tool even after you have experienced many cycles in the marketplace. In general, I do not like "intuition", "gut feel" and other psychological triggers when I have data. if I don't enough data, I have to rely upon intuition.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Couldn't agree more. As a beginner I know that my ability to quantify risk is low. I was pretty amazed at the level of discussion and resources on this forum when I started searching risk yesterday. Lots of good threads with lots of valuable insight and recommendations for further study. I think I am going to look into Mamis' The Nature of Risk. For me, understanding the risks associated with trading and strengthening my ability to quantify and account for them is one of my top focus areas.

As for intuition, my "intuition" is not reliable, and at this point any sort of intuition or gut feeling on my part is simply a guess. I do not possess enough experience yet to have intuition. However, I do believe that my intuition will strengthen over time as my experience grows, and will one day become an asset rather than a liability.

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  #70 (permalink)
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musickbc View Post
Couldn't agree more. As a beginner I know that my ability to quantify risk is low. I was pretty amazed at the level of discussion and resources on this forum when I started searching risk yesterday. Lots of good threads with lots of valuable insight and recommendations for further study. I think I am going to look into Mamis' The Nature of Risk. For me, understanding the risks associated with trading and strengthening my ability to quantify and account for them is one of my top focus areas.

As for intuition, my "intuition" is not reliable, and at this point any sort of intuition or gut feeling on my part is simply a guess. I do not possess enough experience yet to have intuition. However, I do believe that my intuition will strengthen over time as my experience grows, and will one day become an asset rather than a liability.

You are an open-minded person with a good attitude and open to the concept that it is a hard game. As a starting point, you are in a good place in my opinion. I wish you well in your growth as a trader.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email support@OptimusFutures.com
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  #71 (permalink)
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so fitting to see this post

i took my long break and now i'm coming back with more energy and excitement than before.

hope you'll get the opportunity to come back one day too!

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  #72 (permalink)
Beaufort, South Carolina
 
 
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Great post! I have been trading for several years and I do not want to stop. there is obviously a lot of risks but also a lot of rewards. Thank you all for the site and all your time. This is amazing

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  #73 (permalink)
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paps View Post
i re-read what you said.

Yes you hit the nail on the head. I meant calculated risk as even with the best analytics... just about anything can happen in the markets. But when Data is crystal....a true trader with analytics puts on a trade which has totally asymmetrical returns....& perhaps more so...if these are swings. Scalps may have their own nuances.

lol....i did not mean "Taking decisions with uncertainty"<< that perhaps may not be classified as trading.

Passion to the hilt, dedication, extreme perseverance to succeed against any and all odds. motivated like hell. Aware of Risk in markets. Greater awareness when to push and main and the most imp of them all is Execution.

when all the above is met.... one needs to then think of how the Zenith in Trading can be achieved. There is the word Possible in the I m Possible.

and understanding 1 thing in the markets which maybe working for you. And knowing that thing inside out.

lol.....my 2css

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  #74 (permalink)
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Thanks a ton for this thread, so much precious infomation!

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  #75 (permalink)
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What I am learning so far is,

1) Do take a 60% gain once your initial goal is reached. Too many ride the full swing up and back in the hopes of higher gains.

2) Look into Financial Independence. Setting a final amount that one will need to retire helps in tracking back steps that would lead to this amount.

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  #76 (permalink)
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dont be afraid of algos, you would be amazed at how much stupid shit is out there.

commissions matter BIG TIME, there are some strategies where a couple of cents will take your from + EV to - EV.

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  #77 (permalink)
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I agree with the majority of what has been written. I have been trading futures for 21 yrs. I have spent most of those 21 yrs finding out what works for me. I've tried all sorts of indicators, time frames, markets, etc. As time progressed I slowly found out what works and what doesn't for me. It's been a long road which cost me a lot of money but I stuck with it because I love doing it. I finally have found out what works for me and it is vastly different and much simpler than all of the other things I've tried. Wish it hadn't taken so long but I don't regret a minute of it. Now I can just sit back and do what needs to be done to make back all my "educational expenses". No different than becoming a doctor or a lawyer I guess. You just need to stick with it-there is a very long learning curve.

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  #78 (permalink)
Riyadh, KSA
 
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What happens to my Margin during trading Futures when the Bid-Ask coming from my Broker widens? Is the Margin impacted?

For example in CFD, I might go Margincall if Bid-ask spread widened alot

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  #79 (permalink)
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alaghafx View Post
What happens to my Margin during trading Futures when the Bid-Ask coming from my Broker widens? Is the Margin impacted?

For example in CFD, I might go Margincall if Bid-ask spread widened alot

CFDs have their own market makers/ECNs. Truly your broker will be the best source for that.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email support@OptimusFutures.com
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  #80 (permalink)
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When you are first starting out, spend EVERY free moment you have learning. Yes, take care of the job. Yes, take care of family obligations. Yes, don't forget to mow the lawn. What I am talking about is all of that time that people spend playing Madden or watching Netflix or whatever activity people have that doesn't move them closer to their goal just stop it. I was up at 3 am yesterday (Sat) and today(Sun) working on improving my trading. Why? Can't do anything in the yard and everybody else is still asleep. No distractions. No interruptions. Just me and the computer and the simulator. What is most amazing about this is that I don't need to get up early. I want to get up early. I have multiple streams of income that keep me very comfortable in my life but even when I was working for a living I would get up early to learn. I had a job that I worked from about 6 am to 4-5 pm 5 days a week and some weekends when things broke. I would still get up at 2 am (so I could be fully awake before London markets opened at 3). I would trade for a few hours then go to work and after I got home and took a little break I was back at it for an hour or so. It was all worth it the day I handed in my resignation.

Get comfortable with being uncomfortable. Trading is tough mentally. It's easy to look back at charts and say "Oh, I would have taken that trade". It's when you are in the heat of battle with money on the line that you will figure out who you are as a trader. When you do figure it out is when you will begin to grow exponentially as a trader.

Time.... be patient. Doesn't matter your age. I have a friend who is a trader (stocks and options) that is 86. He mainly does it to keep his mind engaged and constantly thinking. He gives away all of the money (after taxes) that he makes trading. I asked him how long it took before he was making consistent money. He told me that time is not relevant. He was only concerned with getting better. He said if you get better every month or every year eventually you will become profitable. He said the toughest part is not measuring getting better in dollars and cents. He has had losing months where he felt he got better as a trader. Very detailed notes are the key (journal) along with managing risk.

Realize that a regular paycheck is the worst thing to have. It will only make you complacent and bind you to a job and a company that doesn't give a sh*t about you. No matter what they tell you to your face. I have seen it far too many times in my 52 years of life. They will tell you that you are important in one ear and remind you how easily you are replaced in the other ear. Doesn't matter if you are a trader, own a business or sell things on Ebay. Get yourself to where you are no longer reliant on other people for your success.

Stay out of debt. An old friend of mine once told me that management at the company we worked at just loved to see new cars in the parking lot at work. They referred to it as "velvet handcuffs". Read "The Richest Man In Babylon". Changed my life.

I could go on and on but it is time to get back to the charts and studying.

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  #81 (permalink)
Chicago + Illinois
 
 
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One of the best things i did for myself getting into futures is open a TD ToS account, get futures permissions, enable realtime quotes, then papertrade. Papertrade for a loooong time until you are good and ready.
Theres so many reading materials out there, probably more than you could reasonable read given a few years. Find a few good resources, but then apply it everyday with actual trades. Otherwise the book knowledge ends up being too abstract and wont help.

Also paper trading is great for futures, at least if you trade the indices and major commodities. Simulating realistic fills is quite easy and there's lots of liquidity, whereas options trading will be very fake, especially on illiquid contracts.

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  #82 (permalink)
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mastery of a workable method leads to less emotional trading.

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  #83 (permalink)
Seattle WA
 
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Wow, thanks for sharing your experiences. I think everyone can find something of value in your post. Best of luck in your future trading!

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  #84 (permalink)
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mattz View Post
The concept of risk and uncertainty are both related to psychology and stats. But, if I had to put it in a nutshell, I would say that Risk is a quantified with negative and positive outcomes. Uncertainty is a bunch of variables that could not be quantified to arrive at a decision in terms of risk and reward.

I have learned over the years to think of the positive and negative outcomes of my decisions while considering the variables I am given. In my opinion, it is the conservative approach and also a simple approach to evaluate things.
This is what most people should adopt especally when it comes to trading. (However, IMO, uncertainty has a way higher payoff because it entails a higher risk. This approach should be adopted only by experienced decision makers and experienced traders).

As a beginner trader, you should know what variables are needed to reduce risk and increase reward.
Therefore, simple methods with a few variables are better for trade evaluation than a "collage" of indicators that move you to uncertainty.

I hope this helps.

Matt Z
Optimus Futures

There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.

Many years ago I worked for a very wealthy man who was tighter than 2 coats of paint. He explained. " you pays your money and you takes your chances". Some things are constant throughout time. It is very simply; complex.

When you can comprehend that, please be a guru in Nepal and I promise I will come visit you.

Sent using the futures.io mobile app

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  #85 (permalink)
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Just was reading through some of your comments and I am glad that this post had meaning for many of you.

For those that are interested in my little journey in life - I am actually really excited about a number of things.

1. I got married and things are great! A wise man once said that "the only thing worse then not being married is being married to the wrong person." I would only add that when you do find the right person your life is so much better.
2. I was able to meet my savings goals the last couple years which gives me alot of confidence that things will be allright in the long run. Being completely out of consumer debt, on track to pay off my house early is something that is relaxing and builds confidence.
3. I quit my job and am focusing on a business startup. Things are looking positive but there is of course no certainty
4. This last year has been by far my most profitable trading year despite making a very limited number of trades and the recent market activity. If there is one thing that I am better at now is looking at the market and seeing what it is doing. Not seeing what i WISH it would do. I think that perspective is gained much easier through swing trading rather then day trading.

I have a much better idea now how little i knew (and still know) about the markets.

I will just add the edit that I put into the original post just now.

The passage of time

If you are like me and got into futures trading as your introduction to the markets I would think LONG and HARD about starting trading by day trading. The first trade I ever did for real money I was in the market for a matter of minutes, had a stress reaction in my body, got out. Repeated process. I was so concerned about having to make money that I was not able to just rationally look at the markets. My story is that I moved from Canada to close to Washington DC and gave myself a 6 month time frame to learn enough about the markets and start trading. I have no doubt that most of you are smarter then I am. But for me I can say without a doubt this was not enough.

The last few years I have swing traded - holding for up to months at at time. There are days that go by where I literally dont bother to check charts I forget I am in a trade. Getting into a trade that is going your way, adding to your winners, giving the market time to do its thing is a incredible learning experience that I wish I had had before trying to day trade.

The reality is that all things of value take time. There is incredible value in the markets, putting yourself in a place where you can learn about the markets over a number of years rather then forcing yourself into a short time frame to have to make money is an experience that now that I am having it I can say with certainty that it is worth it.

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  #86 (permalink)
Legendary Pratik_4Clover
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When I started, I wanted to learn everything I found, from trend lines to MA's to EW to Harmonic patterns to SUPPLY/DEMAND zones and what not.

I was fascinated with every indicator that I looked at, like a new gf, I would run after it and try to understand it to my fullest capacity.

I also spent time on studying obscure things like Gann, Murrey and even some astro, of course on my own from best methodes I knew.

BUT, after wasting some time, even though I'm relatively new than probably most people here to the trading world and blowing out major chunks of my account, I've come to realisation that I wish I knew before. And that realisation is of only two points, shocking right?

1. Trading is not a game of "tools", it's actually game of psychology. Which you play between you and masses.
2. It hardly matters what "tools" you use, only thing that separates from successful trader from unsuccessful one is trade management. And you can use anything for that, from hard fast indicators or magic numbers or random lines, as long as you know how to, you will do well

Learning will continue, well hopefully I'll also get some real money in process

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  #87 (permalink)
south africa
 
 
Posts: 169 since Dec 2018

I wish I had realized that there are all different forms of speculation and you don't only have to trade a certain way with a certain instrument just because that is what everyone else is doing or what you have read about.

One of the greatest speculations of all time is Peter Thiel's $500,000 to a billion+ investment in Facebook.

If anything you should make a list of the most popular forms of speculation right now and basically do something else.

The minority game and El Farol Bar problem illustrate this type of thinking quite nicely.

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  #88 (permalink)
London
 
 
Posts: 147 since Apr 2018
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DeadCatBounced View Post
Just was reading through some of your comments and I am glad that this post had meaning for many of you.

For those that are interested in my little journey in life - I am actually really excited about a number of things.

1. I got married and things are great! A wise man once said that "the only thing worse then not being married is being married to the wrong person." I would only add that when you do find the right person your life is so much better.
2. I was able to meet my savings goals the last couple years which gives me alot of confidence that things will be allright in the long run. Being completely out of consumer debt, on track to pay off my house early is something that is relaxing and builds confidence.
3. I quit my job and am focusing on a business startup. Things are looking positive but there is of course no certainty
4. This last year has been by far my most profitable trading year despite making a very limited number of trades and the recent market activity. If there is one thing that I am better at now is looking at the market and seeing what it is doing. Not seeing what i WISH it would do. I think that perspective is gained much easier through swing trading rather then day trading.

I have a much better idea now how little i knew (and still know) about the markets.

I will just add the edit that I put into the original post just now.

The passage of time

If you are like me and got into futures trading as your introduction to the markets I would think LONG and HARD about starting trading by day trading. The first trade I ever did for real money I was in the market for a matter of minutes, had a stress reaction in my body, got out. Repeated process. I was so concerned about having to make money that I was not able to just rationally look at the markets. My story is that I moved from Canada to close to Washington DC and gave myself a 6 month time frame to learn enough about the markets and start trading. I have no doubt that most of you are smarter then I am. But for me I can say without a doubt this was not enough.

The last few years I have swing traded - holding for up to months at at time. There are days that go by where I literally dont bother to check charts I forget I am in a trade. Getting into a trade that is going your way, adding to your winners, giving the market time to do its thing is a incredible learning experience that I wish I had had before trying to day trade.

The reality is that all things of value take time. There is incredible value in the markets, putting yourself in a place where you can learn about the markets over a number of years rather then forcing yourself into a short time frame to have to make money is an experience that now that I am having it I can say with certainty that it is worth it.

Thanks, what time frame do you trade now? Daily or weekly?

Sent using the futures.io mobile app

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  #89 (permalink)
Baltimore MD US
 
Experience: Intermediate
Platform: NinjaTrader
Trading: ES, NQ
 
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kazz View Post
Thanks, what time frame do you trade now? Daily or weekly?

Sent using the futures.io mobile app

I am looking at both weekly and daily charts. But I think that if you are planning to hold a trade for months you should have an idea of what the fundamental drivers of the market are doing and then just using charts to find the technical spots to enter.

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  #90 (permalink)
London
 
 
Posts: 147 since Apr 2018
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DeadCatBounced View Post
I am looking at both weekly and daily charts. But I think that if you are planning to hold a trade for months you should have an idea of what the fundamental drivers of the market are doing and then just using charts to find the technical spots to enter.

Thanks yes I appreciate that, looking at monthly charts, fundamentals come into play.

How about with daily and weekly charts?

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  #91 (permalink)
London UK
 
 
Posts: 17 since Jan 2015
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Daily and weekly are equally important ... depending on style: mean reversion vs trend, depending on instrument, depending on how long do you plan to stay in a position, etc.

To my view, one should have a clear trade plan: before you enter you should know your exit (determined by a clear written down rule).

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  #92 (permalink)
New York City, USA
 
Experience: None
Platform: NinjaTrader
Trading: ES
 
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Posts: 61 since Aug 2017
Thanks: 9 given, 77 received


kazz View Post
Thanks yes I appreciate that, looking at monthly charts, fundamentals come into play.

How about with daily and weekly charts?

Sent using the futures.io mobile app

The moment you decide to hold a trade overnight you are effectively at the mercy of fundamentals.

Sent from my SM-G930F using Tapatalk

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  #93 (permalink)
singapore
 
 
Posts: 5 since Sep 2011
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if i had better understood my self, trading would have been easier

yet, trading was the process that open the possibility to learn about my self

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  #94 (permalink)
Fairburn, Georgia
 
Experience: None
 
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Posts: 976 since Dec 2012
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1. There are many ways to trade.
2. That there would be extreme highs and extreme lows.
3. There would be more days that I would hate myself more than love myself.
4. The day you thinking you are getting it, you have a setback and lose all confidence in what you are/were doing.
5. For me specifically understanding the stress and emotional roller coast I would put myself through.
6. Understanding wave structure and all the rules behind it.
7. Really understanding probabilities and accepting risk.
8. In trading you're always learning, but really knowing at what point you should start trading live. (refer to number 4)
9. That making mistakes are okay.
10. That just because you fail, doesn't mean you are a failure.
11. That you are fully in control of all of your decisions.
12. Mindfulness
13. Just because you read a book or take a course doesn’t mean you really know it or understand it.
14. To get better you have to practice, practice, and practice some more.
15. Be careful who you follow.
16. Don't set high expectations that you will be a millionaire in 30 days. Process over outcome.
17. It's okay to be sim until you have a good grasp.
18. The more you are involved with trading and a disciplined method the emotions become less intense.
19. Stop changing everything every two days.
20. This list is never ending.

Process oriented goals #1.
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  #95 (permalink)
Legendary Market Wizard
Chicago
 
Experience: Beginner
Platform: Sierra Chart
Broker: Edge Clear
Trading: MES
 
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Posts: 1,457 since Feb 2019
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1. SIM Trading performance will not directly translate to LIVE Trading performance.
2. Accumulating losses when you are starting out can lead to a conflation of problems that are difficult to sort out and identify.
3. Psychological issues like confidence will take work to fix after accumulating early losses.
4. Market context and awareness matters so much, and you can't learn it all in a month. You can only work on what you understand and study until you begin to pick up more pieces of the puzzle.
5. You can't see it now, but have faith that you will begin to understand how to select better setups that aren't just gut feel.
6. Be patient and trade within yourself, bigger gains will come later when you have the appropriate skill-set for those gains. Stringing together small wins will feel much better than you realize and is much more obtainable than stringing together big wins when starting out.
7. When starting out, do not try to "guess the bottome/top", don't be contrarian, and don't fade trends. Stick to simpler with-trend entries until you have the skill-set to be a contrarian.
8. Be open-minded to any and all styles but very selective of who you learn from.
9. Keep a journal, break the trading problem down into smaller pieces so you can better see what works and what doesn't.
10. Lighten up and have fun.

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  #96 (permalink)
Seattle, United States
 
 
Posts: 5 since Feb 2020
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1) Wish I would have learned price action before using indicators.

2) Wish I would have deposited less money on my starter account.

3) That it was going to take me this long to figure out what the hell was going on and I should find another hobby.

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  #97 (permalink)
Legendary Pratik_4Clover
Mumbai, India
 
Experience: Beginner
Platform: Own Customized
Trading: Crude, NIFTY, BANKNIFTY
 
LastDino's Avatar
 
Posts: 742 since Jan 2019
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In no particular order. Purpose is to track what I've learned in year or so from my last post here haha

1. Brokers are not your friends and they only care about you "taking a trade".

2. Teachers/Mentors/Courses are "mostly" scammers.

3. Its not a quick money, its a possibly bottomless pit to suck in money, till its not.

4. Learning coding in at least one language would be as important as learning basic patterns.

5. Trading is and should be treated as business venture, even if you are the only one trading from basement of your parents house.

6. Its not considered to be a legit profession till you have lot of money to show for it.

7. Day trading is not for noobs, new entrants should religiously stick to usually buy and hold over days.

8. Trading against the trend/correction trade needs a skill that requires time to accumulate. Just like how trading with the trend requires patience.

9. Options and futures are different ball games, options can be easiest way to kill retailers in market.

10. Psychology study is as important as studying price action if not more.

11. There are garden verity of traders in market, what works for one may not work for other. Even if there are only so many ways to successfully approach the market.

12. Social media traders are better at photoshop than trading.

13. You can't buy experience, maybe you can by paying to markets in small amounts but not by paying someone else.

14. Risk is both loss and profit, as long as you leave bet on table its possible to lose it.

15. You should not be afraid of leverage or volatility for that matter, but should be accommodating them in your strategies.

16. Probably more controversial, but sim/demo trading should be more used in fine tuning entry, exits and pyramiding in strategy along with back-testing bouts rather than running it after completing back test to see how you do. That can develop in habit and you lose touch with feeling real money on line.

17. You should only trade your own ideas and only your developed strategies.

18. Avoid trying to get into predicting game, its fine as long as its in appropriate area of the chart rather than exact tick price.

19. Last one would sound more like common sense, but its still important as many don't do it. "Read the fine print" and statistics are often used for the purpose of lying in hands of dubious people.

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  #98 (permalink)
london, UK
 
 
Posts: 5 since Apr 2020
Thanks: 7 given, 1 received

Michael Douglas

1. Anything can happen.

2. You don’t need to know what is going to happen next to make money.

3. There is a random distribution between wins and losses for any given set of
variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing
happening over another.

5. Every moment in the market is unique.

Have a process to follow the above ... the $ will roll in over time

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  #99 (permalink)
San Francisco
 
Experience: Beginner
Platform: Thinkorswim
Trading: NQ
 
Nolaughingmatter's Avatar
 
Posts: 46 since Jun 2020
Thanks: 60 given, 77 received

In 2015 I blew 50% of my account. I quit. It wasn't until the recent quarantine that made me get into trading again.

I wish I didn't quit in 2015. Instead of moping and writing the markets off as some great evil, I wish I got a real trading education with SMB Capital, Jigsaw, or even Ameritrade Education Center.

I wonder where I would be today in 2020 with real trading skills and 5 years of experience. Maybe I would be a profitable trader, maybe not. But at least I would have had a real shot at trading with decent training and knowledge.

Then again, I wasn't ready to commit to such a challenging endeavor then.

I guess things unfold in their own time when we're ready. No use mulling over regrets. Just do our best moving forward.

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