Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Well phrased Doc.... overload of information is a killer, unfortunately I am not always sure what good data is versus bad data, hence the overload, but knowing where to come to get some good is critical.
There is a lot of very good advice in this threat so far. However I strongly believe that you can find "your" edge only on "your" own. Look and stuy carefully the charts, with only very few indicators. Max 2 but better none! Ask yourself, what patterns are there repeating. How do they look and how could you have spotted them in advance. Don´t think or listen about other people´s advice at least for some time (scalping or swing trading, indicators or no indicators etc.) Find that out for yourself. Ask yourself what do you expect from trading? Are your expectations realistic or not? How is your mindset? Are you hesitant or in a rush? Have you fear of missing out or fear of getting in to early? All this is very important. Get realistic with yourself, and then try to find a method that suits your way. Don´t try to change yourself too much. That is not working very well. (Remember Sinatra..."I did it my way"?)
And also very important: Do not expect to ever get a better win rate than 60% on the long run (with a 1:1 R/R ratio i.e. -- other ratios influence the win rate accordingly).
Imagine very clearly that this means out of the next 100 trades at least 40 will be loosers !!! Adjust your position size and your strategy and your expectations accordingly to stay in the game.
Do not expect to learn this in a couple of months. It takes years! If this shies you away, stop trading and look for something else. If not, then go at it with your full attention with ambition and yet with patience.
Good luck!
"A chap who speculates- let this be said-
Is very like a beast on moorland dry,
That by some evil spirit round and round is led,
While fair, green pastures round about him lie." v. Goethe (Faust)
Like most I tried to make money by reading the chart and I think I am very good at it. I did not start making money until I developed my own trading system and FOLLOWED MY RULES. It is widely accepted that 90% of all retail traders lose 90% of their money in 90 days so the key to success is to not do what the 90% does.
If you follow these 9 steps you will be ok but it will take work. What separates those who make money from those who do not is that 90% of traders won't do the work that separates themselves from the herd.
1. Develop an indicator, filter, etc., anything that gives you what I like to call an "unfair advantage." i.e. crossovers, pivot points, breakouts, flags, touches of the 50dSMA, BB bands, etc.
2. Define trend. i.e. moving average crosses, comparing a moving average against itself X days ago, price change breakouts, comparing price to itself X days ago, etc.
3. Create an entry trigger. i.e. breakout, bounce, touch, cross, etc.
4. Add multiple exits based on how you are trading; (swing, trend following, etc.) i.e. stops, targets, # days, %'s, counting, trailing stop, scale into strength, etc.
5. Proper back testing without over optimization. Plenty of examples on YouTube. I suggest checking out Kevin Davey
6. We never want to run out of cash so our systems have to withstand Monte Carlo testing. again Kevin Davey
7. Go live while closely monitoring to see if your system performs as expected.
8. NEVER be a keyboard cowboy and ALWAYS follow your rules
9. Take a days rest before starting your next system.
No matter how easy the TV commercials tell you trading is you cannot make money without some sort of a formal system. Then trade your system and only your system.
Edge? Do you believe we all have an edge? In your view, do you think we all know something that you don't and that is what makes us rich while you stay poor? If you think that you are sadly mistaken. If I could think of any advantage I have over anyone else, it would be that I have experience and I understand strategies. That is it. Most single trades are 50/50 whether you gain or lose. Flip a coin, same odds. I saw you mention "overtrading". That implies you do not have a plan. You have not developed a trading plan that sets up all of those parameters in advance where you do not overtrade, even by accident. I have a very strict plan. I trade options, futures, and options on futures. For futures, I trade energies and grains. Period. Why? I have family that owns HUGE farms in the midwest. We talk and I get ideas. I just ask them about the weather, the plantings, the seedlings, and whatever else. and I get ideas. I know my max # of contracts, when, if it works out, I will sell, everything. I have strayed from my plan in the past and it has not hurt me that bad. But I learned, as you should, that you have a plan, you test it on paper, and if it works, you test it some more BEFORE you monetize it. Lastly, remember, NO ONE KNOWS ANYTHING, I have no idea what corn, wheat, or natural gas will do tomorrow. No idea at all. I might THINK I do, but in truth, I don't. DO NOT fall into the trap of thinking that some guy who wrote a book, or appears on TV has some secrets that you can buy. There are no secrets.
Bravo Tony...I am reversing it to let you know we all appreciate your courage in coming into this forum with that post, it says a lot about you.
Everyone on this Thread is providing you with a piece of good information. I'm sure you are overwhelmed a bit.
I am just reading it all
As a newbie, it is hard...finding out who you are as a trader, are you a scalper, are you a swing, are you any of the 20 different suggestions given so far, the only way to know is to go on the journey.
If you go into SIM, this gives you a chance to try your hand at different concepts for free. You may think you are a scalper because you don't have extra cash, but that may be totally not what your personality aligns with, once you try a variety of systems you fill find it.
I have tried scalping, in trends as well as counter-trend. I've traded 5 min bars as well as 15 min bars and 30-minute bars.
And that will be another issue, what time frame do you align with, what are you comfortable with, and that takes time to figure out.
This was a great nugget in one of the posts.....and there were many.
"I also understand that even if someone provided you with a step by step edge, are you mentally conditioned as a successful trader?"
That is so so real, it would take another thread to discuss that.
I will use a metaphor...."Market Understanding" is like understanding a combustion engine thoroughly, not just turn the key !!!
and the transmission is also part of the deal.
Market knowledge comes over time, you cannot absorb it all at once and don't try, there are some very famous traders that will share that sometimes "knowing more" is not what you want to chase....Watch Mark Douglas, try any of his books and videos.
What is an Edge? and that is also a subject for great minds here. In my world of trading, it is having a way to consistently produce a result that provides a profit. Linda Raschke says she is right 35% percent of the time and makes a windfall.........so everybody has a different edge, it is about how you trade and your risk......understand your risk level......I can tell you that if you get sick to your stomach on a loss, it is the wrong risk level.
Stop placement is another in-depth subject, it all hinges on your risk tolerance and trading methodology.
Big Mike is a successful trader, my guess is that 40 point stop has taken him years to handle emotionally.
But I will leave that to Big Mikes to share his journey. I've traded the ES with a 60 tick stop and the NQ with a 110 tick stop...two markets that look the same on a chart but act totally differently. Understanding Volatility is critical. ATR for scalping is a good place to start, depending on your time frame, watching market structure is also needed.
Here is another nugget given to you, and there were many, "you will learn more about yourself in this process"
This is very critical..YOU....what is your emotional attitude, what triggers you? fear, greed, FOMO..all of this will come to play internally.
Spend time finding your method that you are comfortable with, educate yourself to different concepts, and there is plenty to test.
And remember your not testing to see if the system is profitable, your testing yourself to see if you can align with it, and handle the emotional swings it will produce.
Very wise words here..."Many people on forums are not successful traders, so be skeptical and do your own research"
As pointed out before, the best trader can give you a signal and there is a high chance you will fail with it.
Why? because you also have to develop a mental game.
Another great nugget given "You also will learn a ton about yourself on this journey and it might not be pretty."
I will share this...if you do NOT have a strong passion and desire to make this journey, you will suffer, it is hard !!
Nobody on this forum who has crossed over to profitability on a consistent basis did NOT have a journey that took years.
I remember my first winning month, it was followed by 4 months of blowing the account up.
I've been working at my mental game now for 1 year straight and it's not easy. I have an edge but my emotional reaction to issues has been my nemesis.
And of course...going from SIM to LIVE trading is another part of the journey... and you can't get through that until you think you have an edge. You are trading live now and it is not working so stop....(that would have saved me 20k.) Forcing your will on the market is a losing game.
You are in the right place to share and ask questions, most of the successful folks here will contribute good advice.
overload of information is a killer, unfortunately I am not always sure what good data is versus bad data, hence the overload, but knowing where to come to get some good is critical.
