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Basic Education for Beginner Trader


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Basic Education for Beginner Trader

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  #21 (permalink)
 BA 21 
Southern MD
 
Experience: Beginner
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yperez953 View Post
What kind of basic knowledge would you consider absolutely necessary for a beginner
trader to know, study and practice before taking on the market and trading on a live account?
Specific for ES emini futures trading and also general knowledge.

What books, courses, topics etc. would be helpful?

I have searched here and have read other similar posts but i am just not sure where to
continue because I have been learning little by little and piece by piece over the past couple of years and have been trading on a sim TOS account, but It's like trying put a big puzzle
together.

Go to the CME Group's website, and click the Education tab.

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  #22 (permalink)
endusr
Worcester, UK
 
 
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This looks like as good a place as any to ask instead of opening a new thread

I'm in the UK

I don't have any experience trading except using some demo accounts a couple years ago then forgetting about it. I've read no books and just a few websites.

I just came off a call with a trading trainer company in London (Letstrade) who get paid by Markets.com to train people in trading

So basically all I have to do is make a cash investment with the broker ($300) and I get lifetime education

The $300 is completely refundable if I change my mind

I asked all the common sense questions, what's the incentive for the broker which is apparently they make more money by having competent traders register
And voiced my inherent suspicion of all retail trading organisations as there is a culture of instructing people how to trade badly and making money off people who want to trade by training them to trade poorly

His response was that it's legit and they are aware of that kind of activity

What's the deal, shall I go for it or is there a better way to get involved in beginner trading?

Thanks!

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  #23 (permalink)
Symple
Zuerich / Switzerland
 
 
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@endusr

Just use your common sense and you have the answer. If you do not understand what I mean, just read this part of your posting again and again:

So basically all I have to do is make a cash investment with the broker ($300) and I get lifetime education.

Symple

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  #24 (permalink)
 bobwest 
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endusr View Post

I just came off a call with a trading trainer company in London (Letstrade) who get paid by Markets.com to train people in trading

So basically all I have to do is make a cash investment with the broker ($300) and I get lifetime education


Symple View Post
Just use your common sense and you have the answer. If you do not understand what I mean, just read this part of your posting again and again:

So basically all I have to do is make a cash investment with the broker ($300) and I get lifetime education.

I am not familiar with this kind of offer, but I think the odds are that @Symple is basically correct.

I would be very cautious about this. There are more scams in the trading world than practically any other, and they always find a way to make it sound good when they make their pitch.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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  #25 (permalink)
Symple
Zuerich / Switzerland
 
 
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Let's get this straight, very straight and absolute clear:

That I teach someone for cheap USD 300.-- a whole life time about trading with financial products is probably the most stupid and cheapest sales argument one can imagine.

Even a two day course with a real professional trader costs only already the multiple.

And even if it would be an offer on an expanded time to implement the first real trade in live, with all the knowledge needed behind it, it is a scam an joke.

So there is not even one moment or argument to discuss such dump scams any more here in this thread.

HOW MUCH DID ANY HERE PAY FOR THE EDUCATION OF HIS JOB, BESIDE OR BEFORE TRADING ?

Symple

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  #26 (permalink)
 deaddog 
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yperez953 View Post
I'm just not sure what else I need to learn or do. I have traded on different sims but I have been all over the place trying different things and instruments and just experimenting. As of very recently is when I have really been trying to just concentrate on the ES with a specific strategy that I just made up myself and I'm not even sure if its a correct setup but I have been making a consistent 2 points or so daily then I just shut it down. Although on some trades I get a scary drawdown. If I can do that every day consistently, then that's all I need for now until I can scale it up slowly. I'm just not sure how to go about risk management and stop loss size for this strategy.

I chose the ES mainly because of my schedule. I have a day job and I can only trade from about 8:00PM to 10:00PM Eastern U.S. time. I'm not sure if mainly something else may be a better fit for me to trade but I like the ES's liquidity, tick value, and volatility doesn't seem too crazy after hours.

I'd say you were on the right path. If you have anything to be concerned with it's "Scary Drawdowns". If that means you would wipe out your account with one trade, then you are probably not ready for real time.

I would recommend trading the same dollar value in sim as you plan to trade when you go live.

Protecting your capital should be your number one priority. You can't win if you don't bet and you can't bet if you don't have capital.

"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
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  #27 (permalink)
endusr
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Symple View Post
@endusr

Just use your common sense and you have the answer. If you do not understand what I mean, just read this part of your posting again and again:

So basically all I have to do is make a cash investment with the broker ($300) and I get lifetime education.

Symple

Thanks for the reply

I think they said lifetime - which probably just meant access to the recorded material not endless support - but it's pretty slim it's one hour video presentation and one hour group meeting per week.

I got another call from the guy today from letstrade about the next meeting next week before which I'm supposed to register with markets.com and deposit the $300 and make a trade transaction of 0.01 (I think) to verify the account (or something) which makes me think they work off commission. Letstrade is based in Central London but he's calling from their offices in Georgia. He asked if I'd done any research into markets.com to check that it's legit and I said it's hard to find anything definitive which is sometimes is for some reason.

The website letstrade.com states that training is not free, it's 2000 but that is covered by the broker who pay your education fee after you register with them (in this case markets.com)

I'm automatically suspicious about the entire industry and I don't know anyone to ask for advice which is why I didn't bother getting in a couple years ago

Instead of reading and watching endless books and videos I thought having some tutoring would be useful... the incentive is obviously to get people to trade on the markets.com platform which is (the guy said) why they pay letstrade as an educator and people get the education for free to learn how to trade on their (markets.com) platform. The claim is that they make more money if I make money and stick around instead of getting fleeced and leaving - which is why the claim is that they are legit because it's in their interest to have competent traders. Unless this is just another lie.
I'm referring in part to Anton Kreil's infamous 'Anton Kreil Annihilates Retail Brokers and "Trading Educators"' video where he explains over two hours that all retail brokers are just there to fleece everyone which is something I always knew and why I never bothered to invest in the first place. Of course as I soo nfound out he's got a brokerage firm where they ostensibly do the same (maybe slightly different) kind of thing but anyway I don't really know enough to comment on that.

Rookie question - assuming markets.com is just 'another broker' and they're all more or less the same mightn't I as well register with that one as much as any other one? Are they all crooked at some level and all things considered how to choose a broker (in the UK assuming I need to choose one here)

comparebrokers.com states (about markets.com) that "67% of retail investor accounts lose money when trading CFDs with this provider" - and that's more or less the same for other brokers, this being the case if most people lose money how to avoid being one of those people haha
Of course long term trading is the real way to make $ and I'm not keen on day trading - maybe medium term trading - just because of the amount of technical analysis and work that needs to be done.

As a complete beginner, apart from reading this forum thread again which I did


DavidHP View Post
Experience is the best teacher.
FWIW

is solid advice and


WoodyFox View Post
...If I could start over from the beginning I would stay away from indicators, paid courses, trading rooms, and be cautious of everything I read

is equally adamamtine

I suppose I was looking for a way to lighten the load at the beginning but probable better to do research first before signing up to a broker instead of immediately registering one with a cold call with someone I registered with probably a couple years ago...

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  #28 (permalink)
RedMoney
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youtube videos i swear everything you will ever need as far as learning something is on youtube for free

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  #29 (permalink)
CryptoBob
New York USA
 
 
Posts: 3 since Jun 2022
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endusr View Post
This looks like as good a place as any to ask instead of opening a new thread

I'm in the UK

I don't have any experience trading except using some demo accounts a couple years ago then forgetting about it. I've read no books and just a few websites.

I just came off a call with a trading trainer company in London (Letstrade) who get paid by Markets.com to train people in trading

So basically all I have to do is make a cash investment with the broker ($300) and I get lifetime education

The $300 is completely refundable if I change my mind

I asked all the common sense questions, what's the incentive for the broker which is apparently they make more money by having competent traders register
And voiced my inherent suspicion of all retail trading organisations as there is a culture of instructing people how to trade badly and making money off people who want to trade by training them to trade poorly

His response was that it's legit and they are aware of that kind of activity

What's the deal, shall I go for it or is there a better way to get involved in beginner trading?

Thanks!

To learn trading by experienced other traders is a good way and can save you a lot of money at the beginning. I was lucky that a good friend of mine is an experienced trader and he is still my mentor.

Especially in cases of risk management I learnt a lot from him and also the opportunity to loose any kind of question to him is great but I know that I can trust him and he don't wants any money from me. It is very important that you and your "trainer" harmonize well on a human level.

For technical analysis he recommended me the book "Trade Chart Patterns Like the Pros" by suri duddella which is a great reference book for patterns and charting. i'm still using it.

I hope I was able to contribute something useful here

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  #30 (permalink)
 Keab 
London UK
 
Experience: Intermediate
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yperez953 View Post
What kind of basic knowledge would you consider absolutely necessary for a beginner
trader to know, study and practice before taking on the market and trading on a live account?
Specific for ES emini futures trading and also general knowledge.

What books, courses, topics etc. would be helpful?

I have searched here and have read other similar posts but i am just not sure where to
continue because I have been learning little by little and piece by piece over the past couple of years and have been trading on a sim TOS account, but It's like trying put a big puzzle
together.

My main lightbulb moment over the last few years has been simple. Always have this simple idea in your head.

"On most trading days, there is no fundamental market changing news which can drive price to trade at much higher or lower prices.
In the absence of this market changing news, price will simply move around between major technical levels and react to them."


Simple (I hope).

But what does this mean in practise and how do you use this for trading?
Well, using a normal trading day with no big market changing news, if price moves to an area that I have identified as a major area of S/R then I am looking for price to reverse at this point.

I expect price to reverse because in order for price to break through a major S/R level and move a lot higher or lower, there has to be an extra reason, not just a technical one, which can justify price moving to a new price level.
Or, in other words:

In the absence of this market changing news, price will simply move around between major technical levels and react to them.


Think about this logically. If you're sitting at major S/R at the bottom of a swing, what possible reason does price have to break this level and move lower? If there is no bad news/info that the market was unaware of until that point in the day (e.g. a Trump tweet about the trade war continuing/getting worse, poor economic price data which are both bad news), why would the ES move lower? Trader expectations are unchanged, so how can price move any lower? There is no reason for it to move lower! And if it can't move lower then it will do two things-i) stabilise at that lower level or ii) move higher.

Think of something you really like. Ipods. Peanuts. Tuna fish. Coffee.
Imagine an old fashioned market where there is an auctioneer calling out the prices really quickly. Imagine the price of your favourite product (mine is definitely peanuts) moving up really fast and the auctioneer is shouting out lots of prices and lots of people are calling out in order to buy more peanuts. Price keeps going up but then all of a sudden people start thinking "well damn I love peanuts but this is getting expensive, there's no reason for me to keep buying up here at these prices so I don't want to buy anymore here."

All of a sudden there is less shouting out from the peanut buyers and the price increases slow down. There are less buyers, or they have stopped buying altogether. In short, peanuts have become too expensive.

Other people who love peanuts recognise that price has gone too high, people got too excited and that the real or fair value where most people will buy peanuts is a lot lower. So they shout out and start to sell peanuts and price moves lower because in all the excitement the price has gone just too high, the buyers have realised their mistake and aren't there anymore.

At this point, imagine two scenarios:
1) There is no news/market info that has been released that can fundamentally change the price of peanuts. Conditions are exactly the same as when people were originally buying.
2) The largest peanut producer in the world has released an update. They have made an mistake with their inventory and have realised that they now have 50% more peanuts in storage than they thought. These peanuts need to be sold.


Under Scenario 1, this is what will happen:

A) Price moves lower to where most people originally bought the peanuts. The majority of people think it was a fair price, and the evidence is shown by the fact that so many people were happy to buy there. So it's logical that they will start buying again, combined with the fact that it is likely that less people will be willing to sell/short in the expectation of making money from a lower price. Think about if you were a seller at a price that just 1 hour ago people were happily buying at. How confident would you be of making a profit? Do you think this would be a good place to open a short? You'd probably not be too confident. And you'd be right.

Or

B) Price moves even lower than where most people originally bought the peanuts. This is because that there were also a lot of people who not only bought at the fair price, but quite a lot also bought at an even higher price. They're now a bit spooked as the price has dropped lower than their buy price and as we're all human, they're panicking a bit and are selling their positions to CLOSE them. The people selling to close their positions might actually outnumber the people who are now buying at what was a pretty fair price that most people were happy with. Hell, some people might even be actively selling to open a position (to make money on the price going lower) as they can see the buyers getting swamped even at these levels.
As a result, the price of peanuts now goes even lower than where the majority of people were happy to buy them.
So say that most people bought peanuts at $100 per kilo. It went all the way up to $101 per kilo. Price has now moved lower to $99 per kilo.
And at this $99 level, you know that for whatever reason, this is a major S/R level.

At this point, now is the time to ask yourself the question. The be all and end all.

In the absence of any market changing news, what chance is there that price can continue lower?
The answer should be-not much chance to all.

In fact, in the absence of any market changing news, there is a very good chance that the entire same scenario that I have listed above will happen in reverse. Or it might be a bit late in the day now and most people have gone home so price will just hang around and not move much.
And so on and so on.

It is important to understand that most days are exactly like the one listed above. Market changing news does not happen every day. Or two days. Or three days.
So when price reaches a major technical level, and there is no news that can explain why it can move any higher lower then guess what. It won't move higher or lower!

At this point, now think about Scenario 2:
The largest peanut producer in the world has released an update. They have made an mistake with their inventory and have realised that they now have 50% more peanuts in storage than they thought. These peanuts need to be sold.

Work out in your head what this means for the price of peanuts.
Does it fundamentally change what people will be willing to pay for the price of peanuts?
And importantly:
Do you think that the major technical level at $99 will hold?

It is at these moments, and at these levels, where both myself and many others make their mistakes.
We do not recognise that we are no longer trading in the conditions described in Scenario 1. This is because most days are Scenario 1 and we are either unaware of the inventory news or we do not understand the severity of the impact.

The $99 per kilo price major technical level is based on old information. In other words, at that price in the recent past, us peanut lovers were happily going about our business without knowing that that the largest peanut producer in the world was about to flood the market with peanuts.
This news is now big enough to fundamentally change how much we are willing to pay for peanuts, and it is going to be a hell of a lot lower than $99.

So why would anyone buy at $99?

Well, when price reaches $99 it might look like it's going to reverse as some people will probably still try to buy peanuts because they have made the mistake of thinking that we are still operating under Scenario 1. Or they don't really understand the implications of the news and mistakenly think that $99 per kilo is a good price to buy peanuts and make a profit as price will now rise like before.

But it won't do any good. There are now huge amounts of peanuts being unleashed onto the market, so the price has absolutely no reason to be $99, it should be a lot lower. You should be happy to sell and make a profit.

So to summarise what I have said so far:

1) Most days, in the absence of market changing news, price will move around between major technical levels and will react/reverse when reaching them.
2) In the absence of market changing news there is a good chance of reversal at these major technical levels.
3) It is important to have a good understanding of what the fundamental conditions are in your chosen market and what type of news, and level of severity, will cause markets to no longer respect previous major technical levels.

So for the SandP at the moment, they market is expecting a trade deal with China. The market is also expecting that interest rates might move lower which is also good news. If there is a credible change in either of these scenarios then price will move quickly and violently lower. Depending on the severity of the news, attempting to go long at major technical levels near the current price will be a mistake.
Price will always react somewhere so there are plenty of chances to go long, but the news is just too big. These areas are traps and price continues to move lower.


What are the consequences of not understanding these core concepts?
Traders lose confidence and chop and change their trading systems as they don't understand why their levels don't work anymore. Which is a shame as price will stabilise at some point, and then we're back at Scenario 1).

I hope that makes sense. Maybe it doesn't!

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