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Think back to the beginning, before you knew anything about the trading world. Now that you're in my shoes, knowing what you know now, where would you start? Ive been researching and trying to figure out which market is the right fit for me and it's hard. I hear so many Pros and Cons to each one out there.
I do have a day job so, day trading may not be the best fit for me. I don't have a lot of capital so stocks probably aren't for me either. I hear futures are a bad place for a beginner to jump into so I was thinking options but then I read that options are just as hard but don't require a whole lot of capital to start up.
Either way I hear so many conflicting stories about everything. Read books, don't read book, watch youtube, don't trust anyone on youtube, go with this broker, people are just out to take your money. It's all so confusing!!!
What is the easiest market to learn for a complete beginner?
If you had to do it all over again (knowing what you know now) what would you do???
Can you help answer these questions from other members on NexusFi?
See this is the problem is you assume that if you know what we know now that you will be advantaged. The problem is that most people who are still in the game were exceptional to begin with. This means that even if you, or if you'd rather the average beginner, know the pitfalls that you are still unlikely to be successful. The second part of the problem is that it posits that knowledge would have made the difference versus say capital.
Some lessons from my general experiences in life:
1. Make sure you get credit for everything you learn. Focus on education, credentials, etc. There are many more people who are not experts who need to hire experts. Even if you manage to do well without the credentials, you will probably be forced to go back and get them at some point. So, might as well do it sooner then later.
2. Focus on getting capital. And, do not count on your skill, without capital, to get you a job trading. You can be the best trader in the world but without capital you aren't likely to go anywhere. You need a lot more capital then you think. That is the only thing that is for sure.
3. You can learn from books but understand that
3.1 Most successful people have asymmetrical advantage and special capabilities. There are some people who are very good with numbers and some people who are very good with patterns. Some people have abilities that aren't easily quantifiable. So, just keep it mind when you read about a trader that even if you do everything they do that you might not be successful. This is why it is important identify your own strengths.
As an example, imagine someone who has exceptional capability and speed for processing visual information beyond 98% of all people. Let's imagine he tries to trade and he starts based on posited piece of knowledge. Let's say that knowledge was fundamental analysis. But, he tries it and fails. And he keeps failing until he hits on charts and maybe not just any charts but 30 second charts. He feels some connection because he is good at it. Now, he works at this like a professional and gets better and better. Finally, he writes a book about how the secret to trading is trading off 30 second charts. He's writing a truth but one that won't apply to 98% of all people who read his book.
3.2 Do not underestimate the role of luck.
You can read about a lot of successful traders during exceptional times such as the bull run of the 90s, day traders during the insane volatility period of 2008, long biased traders in 09, or crypto traders who got in early. Success is often the combination of people with right skills operating in exceptional periods or times. Success is rarely just dumb random luck but fortune nonetheless.
3.3 Do not underestimate the degree to which markets change
Markets have changed a tremendous amount and continue to change all the time. The stuff that worked in the past can quit working because of structural market changes, regime changes, etc. There is often knowledge in books but it must be understood and often adapted to work in current markets.
4. Do not underestimate the power of belief
I had complete confidence because I had guaranteed backing when I started. I was operating under a false belief because the backing was pulled. However, I worked as if I were already successful because I was completely sure I was funded and ready to trade for a living. I worked easily 60 to 80 hours per week on my craft. This was all due to a false belief. The point is though, if you start this with a part-time mentality you're going to get part-time results. Don't quit your job, for sure but if you really want to trade you need to go ahead and take a full-time attitude.
5. You need to identify what you're trying to do
Are you trying to become a super trader and trade for a living? Are you okay just trying to make a little money to start a business? If you aren't trying to trade for a living then do not even bother to start. It is much too difficult and there are easier ways to make money.
6. You need to set a schedule to work on your trading each day and set your specific goal as to what you want to accomplish.
7. A coach may be useful. For a coach, I would recommend not to seek a trading coach but rather seek a general purpose or sports or business coach to help you. Someone who doesn't know anything about trading. They shouldn't really provide any advice on your trading but rather help you with your schedule -- make sure you get your reps in so to speak. If not, you just have to make it a point to do it yourself. I've never had a coach, as an aside.
8. If you are just starting, I'd recommend to get some exposure to many trading styles. I would get Tradestation or Wealthlab, build some systems, test them. Try chart trading. Try various things. But, do this in a structured way where you spend 2-4 weeks on each style in rotation manner. Once you have wide exposure to many ways of thinking, you will maybe find something that makes more sense to you.
You will probably eventually have to learn at least some system development though, given how difficult markets are today. However, jumping straight to systems development may not be the most productive because you also need to learn market cognition.
9. If you do market analysis then do be brutally honest. If you trade discretionary, one thing I felt I did right was to quantify my predictions and make them falsifiable. Example: I predict Bitcoin to test new highs before testing prior lows over the next 24 hours (i.e. MFE to exceed MAE). That's a falsifiable statement. There must be thought put into the specific formulation.
10. You might also take the easy way and just try to swing trade and shoot for mediocrity. There are advantages to being mediocre. You can spend more time on other activities. You are more likely to feel better faster as it is easier to obtain. If you keep your leverage low you can have a higher probability of making money. Also, if you just aim for mediocrity you can scout the full potential and array of opportunities that come to you.
Remember, there is opportunity cost in everything, and there is only one optimal course of action. Let's imagine you do spectacular trading and end up making several hundred thousands. That's very successful but it doesn't tell us the opportunity cost. Perhaps, you could have did something else, such as starting a business, and made millions and made it much sooner and easier and/or providing greater total value.
All markets are the same. However if starting its always better to be in the ES which is lesser volatile than the NQ/CL/RTs.
I dont think if i had to start all over again...it would be anything different. its a process/grind & one learns thru mistakes unless they have a god father and flushed with capital. what i would start with is knowing the basics...as below...& market structure. rest all falls in place & it depends on the passion/intensity of an individual. all traders are different and have different priorities.
You also need to ask yrself why trading. If it is for the $s you need to be good. if its passion....many other things fall in place inspite of all adversities. Well thats only mho...& could be wrong.
ofcourse you need to know basic things on market structure....i.e when they buy/sell...or how...and when they exit....and prices where one should get engaged. If this is known and understood...rest is risk mtg.
If you think about it...it's the market place...u need 2 take $s out of someone else's pocket and put it into yours . Is that an easy job. and you are competing with the Best/Brightest and the Strongest fire power. So you need to have some edge.
as posted....by the other poster...many things might apply. But let me tell u "1 Thing". It is soley dependent on you. no education...no mentor....can really help...they could guide. so it will depend on how bad one wants it. you can be sitting next to the worlds best trader and still consistently loose. WHy?...as that persons fire power or strategy may not suit
for me...its my passion...not a hobby. i breathe...live....and think....trading. its my life....though i have a job.
I would understand that capital is lifeblood in this game. ALWAYS. ALWAYS. ALWAYS predefine you're risk with a stop loss. In truth if I could take back 6 trades I never would have lost as much money as I did and the hole would have been as deep to dig out of.
Define your edge. Find a combination of events in the market weather is be as simple as 2 indicators both saying to buy or some extremely complex set of events. Then figure out how many times it is a win or a loss. If you are able (depends on your setup) to risk $75 to make $150 the trade only needs to hit target about 1/3 of the time to breakeven. There is nothing you can do to effect weather you hit target or get stopped out. Just like a coin toss you shouldn't get upset because there is nothing you can do to change the outcome of the flip. Just know that over the course of a hundred flips the 50/50 probability will play out. Once you have done this SIM trade it.
Reduce your risk when the opportunity presents itself. I doubt few here will argue that there are very many better feelings in life than being in pain free trade. Its not always about how much you win. Not having to take the full loss is also a win.
Never chase a trade or take a trade that doesn't meet your exact rules. If you miss it, let it go. The occurrence of your edge will come along again shortly. Just be patient. Easy thing to say, but like being jabbed with a needle over and over while you try to exercise it. I have found it is truly worth the wait.
Understand that the Market is a never ending stream. Don't worry about money left on the table. Think more about your risk to reward and the probability of your edge. The occurrence of your edge will happen again shortly.
Journaling. Man it sucks. But it is beyond necessary. How can you gauge any setup or systems effectiveness if you don't track the necessary information? I track Date, Time, MAE, MFE, win/loss, and -/+ profit on the trade and mistakes made. MAE and MFE were a bit tricky for me because I needed a set of rules to define each but they showed me my stop was a bit wide and I wasn't letting the trade run long enough. One great tip that I got and have adopted is writing down my mistakes during each trade. Then at the end of the week I look at what my PnL would be without the trades I made mistakes on. Most times I see that I would have saved myself money.
Pay the 100 bucks for a Futures.io elite membership. Almost every wiz bang, gizmo or shiny new indicator I spent tons of money on can be found somewhere on this site between the two sections...for the cost of a hundred bucks.
File an LLC. This is a personal preference. If you take 5 trades a day at 4 bucks a trade it's over 5k a year in commissions and you don't get to write much of it off as a private investor. Not to mention other write offs such as classes or memberships, home office expense.....
If I could recommend only one book and only one book it would be Mark Douglas's Trading in the Zone. It changed the way I think about trading.
Lastly, If you have limited capital and no trading experience you should SIM trade. Worry about to process not the profits. Many might disagree with me here but consider trading Forex. You can trade a Micro lot at a penny a PIP while learning how the market functions. Or you can go full on stupid and dial it up to 10 bucks a pip in which case that person would deserve to donate their money to the market. In my opinion there is only 2 benefits to trading options(straight calls or puts) in your situation. Leverage which is a nice way of saying "The ability to loose your capital at a faster rate" and predefined risk. Predefined risk is good because most calls and puts expire worthless. You have to be right on direction, time and velocity. You have to understand options pricing and the Greeks. You need to understand how Gamma effects Delta. And that Theta is a relentless bi*@h that will rob your positions value on a daily basis and she doesn't take weekends off and only demands greater payments the closer you get to expiration. You can be right on the direction and price can reach it by expiration but Theta may have already taken so much value from your position that there isn't much left for you.
. Is that an easy job. and you are competing with the Best/Brightest and the Strongest fire power. So you need to have some edge.
