I agree with Mike. The point of the market wizard is to show you different style of trading of various amazing traders. In your case discretionary trading based on your post. Perhaps, after reading this book, you might realise, perhaps different kind of trading style might suit you better. Once you think "this trader is the one I would like to become" learning their personality would be very useful. That book also show you what have those traders faced before becoming what they are. There are many of them that already blew up their accounts (occasionally more than once).
I recommend to read at least "Ed Seykota" section (if you don't want to read the entire book). He's just ... amazing.
NOTE: Market wizard is not about knowledge, but it's about trader personality and sort of like trading journal of many legendary traders.
The following user says Thank You to felixtjung for this post:
While I look at this forum every day and also stare at my forex demo account to get accustomed to it, I've been spending the vast bulk of my time on two books: The Daily Trading Coach by Brett N.Steenbarger and Reading :Price Charts Bar by Bar by Al Brooks.
Big Mike strongly recommends the Steenbarger book. I agree it is a remarkable book, not only for trading, but as a guide for improving your life in general. This book has prodded me to reflect deeply on how I approach different aspects of my life, and how I might help improve myself. Reading it is pleasurable. This is a positive, positive book.
By chance I saw a reference to the Al Brooks book here, and started reading the long thread discussing price action trading. Then I looked at positive reviews of the book, and bought it. As many people have noted, it's not easy for beginners to slog through. But I'm going with it for a few reasons: First, I now have a basic understanding of indicators, and even that basic understanding makes me uneasy about them. I just don't see how the simplest ones could be reliable, and I sense the complicated ones would at least sometimes give one a false sense of security. Also with complex models it's difficult to understand how they work in all situations. So when I read that Al Brooks has tried and rejected indicators, I was intrigued. Second, I've been studying so many different approaches to entry and exit and trading in general that I was becoming confused. I decided to go with one approach, understand it thoroughly, use it, and change approaches only if this one doesn't work for me. Finally, I read Al Brooks' bio, and a few of his entries on his price action site, and I like his personality.
I've started printing out price charts and seeing if I can identify trades, as he suggests. I'm not quite where I want to be, but I'm giving myself two more days of reading and studying, then I'll start paper trading. If I started right now, it would be blind, so there's really no point. Two more days.
As for time, 5 hours on Sunday, 3 on Monday, and 5 on Tuesday.
For several years I worked in the same building as the Chicago Merc, and watched the trading many times. I enjoyed it as theater then, but now I need to go back and take a better look. Thanks for reminding me about this.
I started paper trading today with a shell of a system based on price action, ala Al Brooks. I watched the bars for a half hour or so, looked at the past day, and then started up. My rules for entry were that I had to see and perceive a trend, that I would trade only with the trend, and that I would set an entry stop a tick beyond the close so that I would have some momentum before entering the trade. I set the stop loss in an artless way, but generally about 10 ticks away, which was 1 percent of the units I was trading.
I suppose I should mention to myself that I was trading EUR/USD. I used a 5 minute candlestick chart with EMA 14.
Did I follow my rules: For entry, I believe I was appropriately patient, and I did follow the simple rules I set up. Whether I was interpreting the price action correctly, I don't know yet. I was looking for the most obvious.
So what were the results: two trades. The first was long and stopped out at a 3 pip loss, after I moved the stop loss up. This was a mistake. The second trade was long as well, and I made 2 pips, but I goofed up trying something I didn't know how to do with an upper bound and I ended up selling before I wanted to. So my exits were completely artless.
The good from tonight: I had a system, albeit a weak one. I concentrated well on what I was doing. I was patient, but reacted well when I saw something I thought looked good. I focused on the trade (easy enough to do with fake money). I did not feel any emotion swings, up or down.
Need to work on: Setting profit targets. Not messing with the stop loss. Refining strategy.
All in all not anywhere close to where I want to be, but not terrible. I'm not discouraged. In fact, I want to read an hour or so after this post.
I do need to figure out how to copy charts so I can display them for my own sake.
The following user says Thank You to rem4444 for this post: