I was wondering what approach you took how to be a consistently profitable trader?
I've decided for pure price action. Went through Al Brooks course and tried to apply that to a small FX account where I trade the "I don't care size". Likewise, I go through old ES charts on tradingview bar by bar and try to do reasonable swing trades on paper. Once I am through with the session, I compare my entries and exists with what Al Brooks presented in his daily setup.
I feel this is quite an effective approach but I was wondering how you became sufficiently good at trading?
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Well gnoppa I believe your already on the right track. As far as Im concerned Al's course is all you need to get all the foundation you need. After that study all and every one and always keep practicing as you are.
I would also suggest dont try to copy Al just emulate what hes showing you and make it yours. Build up a datbase of your own trades. You have to be comfortable with how you trade and know why your taking trades and how to manage them.
I love tradingview and still have and use to this day but nothing beats live trading. Even live sim trading beats simulator anyday because you cant fool yourself.
Good luck my friend. As always Im no expert but here to help.
Yes I think over the long run I have to find my own setups. But for now, I feel internalizing Al's teaching is a great way to speed up the process. I see it a bit like an apprenticeship.
If you think about it in Japanese martial art learning stages:
shu (守) "protect", "obey"—traditional wisdom—learning fundamentals, techniques, heuristics, proverbs
ha (破) "detach", "digress"—breaking with tradition—detachment from the illusions of self
ri (離) "leave", "separate"—transcendence—there are no techniques or proverbs, all moves are natural, becoming one with spirit alone without clinging to forms; transcending the physical
Brooks is clearly on the ri stage. He sees ~ 40 reasonable trades within 81 bars. That is probably why it is so difficult to learn his trading style. So in fact when you try to emulate him you are already looking at the ri stage.
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Trading: The one I'm creating in the present....Index Futures mini/micro, ZF
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Risk.
I haven't seen any talk about risk.
Focus on risk. Not entry.
Of course you need an edge.
But, by way of comparison, the entry is far less important than the exit and managing your risk is the pinical of great trading.
Trading size so small you don't care won't help you all that much in the big picture unless you just use it to get familiar with your platform/software, save for the beginning stages of understanding your market.
The mind games/psychology trade aspect is intricately interwoven to trades with risk that is real and means something to you.
Things to think about:
Risk per trade. This must be decided BEFORE entry. Stops. Location/placement. Movement.
Tolerance for risk. How do you measure it? Minutes? Can you walk away? Can you wait two hours for a trade to start working?
Position sizing. How do trade opportunities rank? Do some merit more risk?
Actually I agree. You have to be fully absorbed into any craft and know the fundamentals inside out before stepping out on your own and becoming part of it. And then becoming better at whatever suits you.
And only then having your orders flow in and out of the market and just being part of it while you just sit there and trade comfortably and confidently.
Like Al has always said. You will never be profitable using a strategy you don't feel comfortable with. You need something thats both profitable and comfortable for you to trade thats all.
I find it interesting that most people talk about risk and psychology. I agree that if you screw one of these up it is fatal. And in many ways, risk and psychology are interwoven. However, I don't think they are as challenging as people make it sound. I go with the simple 1% SL risk heuristic (later on I will use the Kelly criterion) and put my stops at prices that would invalidate my hypothesis. As I trade the "I don't care size" live I have a lot of equanimity. I am sure that if I was trading larger amounts I wouldn't be as calm. But that is why I try to slowly condition myself. I noticed that at the very beginning where I was trading too big. I would generally cut my winners way too quickly as I was afraid to lose what I had gained so far. So I agree with you, exiting a trade when real money is on the line might be the most challenging thing.
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Simulators/Demo's are misleading, 7 months ago I had started one demo trading journal here, I had similar thoughts as you. I had it deleted recently because it was creating gap between reality and what I thought I can do based on my demo performance. Just in case if you are wondering, I had multiplied many of my demo accounts. I also code my own indicators so I needed to test them often but none of my real accounts were able to give me same expectancy.
You can only address problems which are real, and those only surface when you have real skin in the game.
Unless you can treat virtual money as real, its not gonna do anything. Maybe you can, but its a very very rare thing. There is reason why most people who come to market blow up their savings, they get overconfident due to demo's. Take your time trading real account, even if you have to scale down, trade with real and establish real baselines. That way you will also know faster if you are made for this or not.
This is just my pov and observations of myself, they need not apply to others. So take it with pinch of salt.
Good luck on your journey!
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I tend to agree entries are the least important part of my trading as well. Almost to a fault actually.
Yet... they ARE AS important IN RELATION to your exit as any part of your system.
On the simulator I like take fully random entries and try to manage my way out. Over time Ive found I suck at entries anyway so I just try to fade myself.
Where we disagree (and thats totally fine) is the "I don't care size".
In my opinion this is always A MUST no matter what size account you have. It does not matter one bit about anything else.
If you risk .05 percent MAX on every trade for the rest of your life you will either blow out because you absolutely can't get this or your under capitalized... period.
I heard Big Mike or FT71 (where the hell had this guy been my whole trading pursuit? Just found him recently and can't listen enough. This guy IS GOOD!) say something to the effect of take whatever your results were on even live sim and cut them IN HALF! FULLY!
That struck me but it shouldn't have because its happened to me time and time again.
I became very successful when I dropped the charts. I only use the DOM, and primarily trade treasury futures. I wasted 3 years on technical analysis. The big traders at the big firms are using the orderbook as their main trading tool. Perhaps we should follow what the big guys are doing :P. I don’t think it’s impossible to make money on chart trading, but statistically my performance has improved massively since I switched to the orderbook.
Josh Waitzkin won World Championships in chess and martial arts. He wrote a book on how he learned to be the best of the best. It is called The Art Of Learning.
The book is a great way to start.
You can get into all that other stuff later.
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The very VERY most important thing to learn when trading is to position your size properly in conjunction with a known stop. The stop should ensure that if it get hit you do not lose more than 1% of your portfolio. If you want to be successful this is key. Then next is to have a strategy that you know works more often than not. Accept a losing trade and take the loss. Accept a winning trade and take all profit per the strategy.... let it play out. If your strategy says take 1/3 profit at a certain point, and another 1/3 at another point... let the trade ride to that and follow your strategy. Let the profit run on the last 1/3rd of your position until the strategy tells you to exit. The reason I say this is that you will get losing trades. It is hard to accept a losing trade. But your mindset may have you take a tiny bit of profit on a winning trade and then exit too early.
Tradingview.com ( free version ) Click on "Ideas"> then click "Educational ideas"> ScottBogatin< start listening to those videos while you search for your markets and your style as well as other things to learn about. ( it's free )
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Hello,
I became very consistent trading stocks when I stopped day trading them and started short-term swing trading them after purchasing Metastock software and several add-on software packages. I initially subscribed to the real-time data package but then lowered that to the $27.00 overnight data package. I purchased many add-on packages and after as you can string them all together, but eventually found about three or four of my favorites that give me a short list to enter the at night with stops and targets or trailing stops with no targets and break even profit levels. I usually will let these run for from Monday 3 or 4 days max, Monday thru Thursday or Tuesday thru Friday.
When I got profitable swing trading stocks, It was time to get consistently profitable trading index futures. I was doing OK in Tradestation but no consistently. I switched to Ninjatrader and became less consistent for some reason until I started using SharkIndicators BloodHound and BlackBird along with some third party indicators from Ninza.co and LizardIndicators. I found out that I am not a good index futures discretionary trader and needed to automate trading strategies and also enjoy automated them. I enjoy developing the strategies, back-testing them, forward testing them on historical data, forward testing on live data, sometimes performing Monte Carlo Simulations and performing forward optimizations where appropriate. I have 5 strategies so far I have been running on the e-minies with nice results. This works for me and may work for you. At least you may consider these approaches. If you have any questions, please feel free to reach out to me.
I believe many here got have provided some good advice..
I found Price Action as a great way to read the tape as it is unraveling.
Just keep in mind that Price Action must be taken in context and not traded in a vacuum. That was one of the mistakes I made when I first started trading.
If you go one step deeper and learn about volume .. What happens in High Volume areas vs Low Volume Areas..
Deepen your understanding of why a market does what it does.. Revisit certain areas only to reverse.. Or why some days rotate while others trend ...
Using this knowledge with Price Action is what has turned my trading around....
Good Luck...
The following user says Thank You to Reefunit for this post:
I also study Brooks trading course. It is good information and helps me build confidence.
Brooks can find 40 reasonable trades per day. However, that may not be possible for you. I only trade 2 ways of Al Brooks methods , as I'm still studying myself. I recommend sticking to 2 methods to trade for now. Before you get too overwhelmed.
I would say I learned from some very good traders and a lot of research and when I say research I was becoming cross eyed. I ran every free indicator out there and came up with 3 out of thousands. MACD on a Heikin Ashi chart go hand in hand, then there's the Parabolic Sar that don't lie and I really like the Slow Moving average it don't lie either. All in all they work exquisitely.
I am not yet trading. I am still looking and studying. However, my latest conclusion is that pure price action (with no indicators) looks very promising to me. The best book I have found on the subject is NAKED FOREX by Walter Peters. I am very impressed. Pard
I tend to agree with you. However, I think with Brooks it is a little difficult to limit yourself to a setup. He looks at everything together and goes from there. So I try to only enter trades that look like they have potential for a swing. Always enter with stop entries. Generally, I feel there are 1-3 great entries for that on the 5min chart per day. That is good enough for me so far. What I find interesting is how important magnets are. Most people just talk about patterns or support and resistance but rarely magnets.
Let me start by saying that i have struggled for years and even stepped away for one year. I came back and relearned and studied Al Brooks as well. He has a great approach.
I found for me using Al Brooks concepts with inside bars on m5 worked well. But I am a scalper at heart with a mid range tp for my 2nd contract.
I have no financial stake mentioning who changed my trading faster than anyone. They give a month free and the second month for a buck. So it is worth checking it out. Look up Apex investing with Darrel Martin if you are interested. He is the only person I know that gave me a plan and makes you stick to it each day.
Hope it helps it has changed my short term and mid range trading for the better
For me the key on becoming a full-time trader is to invest/expend the least amount of money possible at the beginning while you learn your trading style and become consistent.
For that, I've found out that the most cost-effective why to learn how to trade is to sign up for one of the funded account programs such as topstep/earn2trade, etc. You only expend about $100 a month until you get funded. If you get funded, it is my belief you are ready to invest more than the $100 dollars a month in trading.
If the want more information sent me a DM and we can talk thru discord.
Persistence, perseverance, tenacity, patience... and having a consistent method that does NOT CHANGE. most methods that are reasonable works. but you need to pick one and stick with it. Most newbies have an idea but they chicken out of what would have been a profitable position, only to lose to a MANUAL bailout (due to chicken liver being sold). I don't believe in using a lotta tools. try to KISS it. tools mostly simply muddy the waters. stuff like news, strength meters, other opinions, etc. instead follow the BARS. be wary of pinbars (a part of price/action) especially right after entry where there should NOT be any such critters. Also remember that almost ALL entries will at first be AGAINST your position (how many bars do you observe with NO opening wicks?). Study consolidation.. the longer it is the more likely a breakout will be robust. Don't pay attention to lack of headroom... or the ADR. a breakout will make those things look like they do not even exist. Remember that everybody is unique. for example I only trade the USD session. don't fret regarding the "big one" passing you by because they'll be others in your future. btw. memorize your rules and do not go against them as more than likely they were drawn up when emotion was NOT involved.
If you find a methodology that works, automate and take your emotions out of the equation if that is what is hindering your success. Hesitation caused by emotion to pull the trigger on the trade or exiting at the wrong time will cause losses.
entering hastily though may also cause losses as well. I generally wait for consensus however I trade off the EMA's by entering after an opposing bar closes which is NOT common practice. if its a pinbar though that is also opposing.. beware the time to be patient has arrived.
When you say "slow moving average", what length and type are you using?
How do you employ it?
Persistence! Nothing in the world can take the place of persistence.
Talent will not ... nothing is more common than unsuccessful men with talent.
Genius will not ... Unrewarded genius is almost a proverb.
Education will not ... The world is full of educated derelicts.
Persistence and determination alone are omnipotent! Calvin Coolidge
As I said, you cannot define the setups so clearly. I look at the context and try to determine if I should enter at the market for strong BOs or with H1, L1 (strong BO first PB), or H2s, H3s, L2s, L3s for MTR or weaker trends.
Since I am still learning I am only using one micro lot. Its not for making money but for learning. If I see that I am consistent enough, I will incrementally increase my size. If I have enough data on risk, reward and probability, I will use partial Kelly for determine my position size for each trade.
