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From the Beginning...my journal of starting from scratch
I'm hoping that reading more views on the subjects and from different people with separate ways of describing trading and it's tools may help me to understand things better. I'll update again once I start in on it a bit.
Can you help answer these questions from other members on NexusFi?
Congratulations on the choice to go Elite. It is an excellent investment.
I smiled when you mentioned the Darvas book in a previous post. It was the first investment book I read, and the first time I thought that the stock market could be traded profitably. That was, ahem, a little while ago, however (some time in the 1960's, as I recall.) There is a lot of other material out there, as you are noticing.
Be aware that it may (actually, will) take time, effort and money (some of which will be, inevitably, lost) to get up to speed, and also that many people really don't ever manage to. That is not said to discourage you, but it is just a fact. How you manage that is something that will be up to you as you go forward.
Also, you can get a lot out of books, webinars, other peoples' posting on nexusfi.com (formerly BMT), and other sources, but you cannot simply copy another person's method or style and expect it to work for you. For one thing, it is a fairly well-documented thing that around 90-95% of futures traders fail. It it were easy, then everyone would be rich. If you can put together your own unique perspective on the market, perhaps initially working from what others have done but then making it your own, you may succeed.
In that light, you might want to look into the many, many webinars in the nexusfi.com (formerly BMT) webinar section. I don't think you should take any as the last word in trading, but you might want to take things that make sense to you and try to apply them. There are some good ones by Adam Grimes and FT71, among others, off the top of my head. Browse around and sample what's there. (It may confuse you to find that different people, who do make sense and seem convincing, may completely contradict each other. That's the nature of trading, and why you need to have your own point of view, that you can verify with your own experience.)
You might also want to follow the spoos (S&P) thread (recent post:
correlations tend to rise during most, but not all, crisis periods and fall back once the crisis has passed
correlations tend to rise during weak macro-economic conditions, and fall back when growth is strong
high correlations tend to be associated …
. Follow it during the day if you can, or review it at night, and see if it makes sense to you. Some of the information and techniques may take more research to understand. ) It is valuable, not as something to follow slavishly, but as an extended discussion in real time between several seasoned traders who are posting their actual trades, usually in almost real time, and their rationale for them. Without doubt, the two principal posters on this thread, @tigertrader and @Big Mike, are among the most accomplished traders you are going to see, and you have the privilege of seeing the trades they are taking as they make them, which is very rare.
However, you will also see that there are many different ways to look at things, and that disagreement is not at all uncommon. You may even get the idea that there is no one "right way" to trade, although there are certainly many wrong ones.
All of which means that you will have to make sense of the market on your own terms, and ultimately find your own way, as in everything else. I hope that these resources will help you as you start.
Good luck in making sense of all this, and in learning how to apply it well.
Thanks @bobwest for all of that info and wonderful advice! I also see that you are from Sarasota! I just moved from there about a year ago but still go back almost every weekend since my family is still there and I help my dad with his business. Maybe we can get together some time if you don't mind helping a noob out with some advice and tips as well as answer a few questions.
I am definitely noticing how hard this actually is compared to how some people and TV personalities make it out to be, but I am fully up to the task of getting my knowledge up to par on how to read the charts, price action, etc. and to actually understand how and why it happens. I also believe that not having the capital to open a live account early is going to help me in the long run as well so that I don't just jump right in and start losing money because I "think I know what to do".
I have been looking into the webinars on here and have a few in mind to get started with. Although it's tough for me to get time available for them, I am waking up earlier in the morning before work so I can put in an extra "free" hour of study time per day.
I also took a look at the Spoonalaysis thread that you mentioned three or four weeks ago and could not understand most of what they were saying so I knew that I needed to get my knowledge base up before I could begin to talk with the big boys and actually understand what they're talking about.
Again, I know this is going to be a long and hard road that I am going down, but I believe that with enough study and discipline I can turn this into a profitable way to make a better life for myself and my family, and I am completely committed to doing just that! I already have the mental "want" and discipline to do this all while not making a dime (and actually spending money) so I believe that one of the toughest hurdles has already been passed.
Thanks so much guys for following along and offering the advice I have gotten so far, it is super appreciated and just goes to show why this is the best, and most grown up forum I've ever been on, and reaffirms my decision of going Elite and contributing to the forum. You guys are the best!
The book is still one of my favourites (right up there with Reminiscences and the first Market Wizards). Darvas's method is still pretty sound today - when I scan stocks and I see a tight horizontal base at all-time highs, that stock immediately goes to my watchlist. It is a really simple and easily spotted pattern and does increase your odds of getting a big winner. Of course, that is only part of the game and how you manage your winning trades (assuming you cut losers correctly) is really where the big money is made.
You noted that Darvas needed to get rid of outside influences in order to trade successfully - once he started breaking his rules, he ignored stops, entered trades he should not have and cut winners short. Reading that made it sound as if he was just starting out again - Livermore used to experience the same on occasions and so do most traders I know (myself included). It's easy to talk about maintaining discipline, but quite another thing to do so in real trading. Imagine months of treading water / small losses waiting for the markets to finally get going.
Last bit of advice - don't overcomplicate things. If I were betting money on two traders, i.e. one with the best platform with all the indicators and bells and whistles, and one who just focuses on buying high-volume breakouts from Darvas-type boxes, my money would be on the latter. The simplest systems tend to work best if the trader does not allow his emotions to influence his trading.
Still playing with my demo account while I read and learn. Haven't had a losing day yet, although I do have losing trades here and there. I really like using the DOM and 1 minute candlestick chart. It helps me to see the patterns very well and the setups also. I got in a position early and hit my target a little over an hour later for my biggest win day so far. I just wanted to see if I could manage a 10 contract position. I am going to go back to 1 or 2 contracts since that is what I'll be starting with.
Also still reading my new book but only on Chapter 2 so far. More updates as I get further in my book!
Still reading my new book but haven't gotten too far into it. I'm on chapter 5 now so I will give a short breakdown of the book so far.
The first two chapters was really just an opener to trading and a short history on wall street itself. I did like learning the background on how it was started and how it progressed through time.
the third chapter was nice as it discussed how to setup your trading as far as choosing a platform, a broker, understanding what kind of trading you want to do, and talking about opening one or more accounts. It also explained slippage and commissions along with how to manage them, and explained why having a positive attitude and environment is key to success.
the fourth chapter is all about having a positive trading mentality. Protecting your principal, trading to trade well and not to make money, leaving faith and hope out of your trading, and having respect for the markets is the whole point in this chapter and is something I believe is one of the biggest keys to trading success.
Toni also likes to add what she calls a "centerpoint" at the end of each chapter which is really just a positive message about believing in yourself, following your dreams/goals, staying positive and on the right track, etc.
Overall I really like the book so far, I just haven't gotten into it as far as I'd like although I plan to put a few hours or so into it today.
Also, going to pick up a second monitor today for the computer to begin setting up my trading area the way I'd like and soon we will be investing in a TV and hooking up television so that I can have access to CNBC. I don't really watch TV so this will be for my trading only.
Thanks again for any and all advice you guys, it really does help and is very much appreciated!
Don't bother with the tv it will just distract you, you only need streaming news that affects the market and so that you can manage your risk coming into sensitive news or announcements, the tv channels spends 90% of its time repeating useless stuff.
Use that money to invest in a news alert service or use financial juice which is free. Also use a calendar such as from forex factory to get scheduled releases for free.
If you really want to watch a tv channel, just stream bloomberg tv for free.
I signed up at financial juice, I have the Forex Factory site up but don't understand how it relates to ES and futures, and bloomberg tv I found the stream as well.
