tools of a trading pro
- Thread starter oilman5
- Start date
1. why they r superior ?
cos they dont follow others, dont believe what others say, but listen to everything and takes what matters (test, test, test. researching and testing is not the holy grail, but if there is any path, this is it). do you know what will be the performance of a random entry system with different money management on any instrument?
2. what time frame they trade?
anything that you can think of...
3. how far they r subjective in trading ?
cannot answer
4. what r the reason for their actual consistency ?
the same that goes for McGrath, tiger woods and federer.
5. on what condition they don't trade ?
many reasons...but how can i know all? got some from market wizard series.
6. what is their contingency plan[enough is enough..now i am booking loss]
depends on each trader, but they HAVE ONE and FOLLOW IT DILIGENTLY.
7. what self sabotage u find most difficult to overcome..yet how u have done it ?
predicting the market....mechanical system.
8. do u think beginner trader[4yr amateur] can be like u oneday ?if yes. HOW!
why do you want to be like me? then you will have to follow my style, which may not suit you. get what works for you. keep an open mind, but don't take anything on face value. Read - Practice - Practice - Read. btw, no of years has nothing to do with success...or else all 15 yr traders will be millionaires today...this is not time based promotion. u can be a very successful pro in 4 yrs too.
cos they dont follow others, dont believe what others say, but listen to everything and takes what matters (test, test, test. researching and testing is not the holy grail, but if there is any path, this is it). do you know what will be the performance of a random entry system with different money management on any instrument?
2. what time frame they trade?
anything that you can think of...
3. how far they r subjective in trading ?
cannot answer
4. what r the reason for their actual consistency ?
the same that goes for McGrath, tiger woods and federer.
5. on what condition they don't trade ?
many reasons...but how can i know all? got some from market wizard series.
6. what is their contingency plan[enough is enough..now i am booking loss]
depends on each trader, but they HAVE ONE and FOLLOW IT DILIGENTLY.
7. what self sabotage u find most difficult to overcome..yet how u have done it ?
predicting the market....mechanical system.
8. do u think beginner trader[4yr amateur] can be like u oneday ?if yes. HOW!
why do you want to be like me? then you will have to follow my style, which may not suit you. get what works for you. keep an open mind, but don't take anything on face value. Read - Practice - Practice - Read. btw, no of years has nothing to do with success...or else all 15 yr traders will be millionaires today...this is not time based promotion. u can be a very successful pro in 4 yrs too.
Last edited:
A
i dont know,whether i am right to write here....forbidden art of trading will be exposed here.many a pro r available here in this great forum...i request them to make comments.
1. why they r superior ?
To be simple bcoz i am successful and accepts mkt is random in nature
2. what time frame they trade?
Depends what i need to acheive if day trading prefer 15 min charts were trades not last not more than few hrs and if swing few weeks possibly
3. how far they r subjective in trading ?
I prefer quasi discertionary style 99% mech in rules and 1% apply discertion as my system cant read NEWS
4. what r the reason for their actual consistency ?
Using system with positive expetancy and sticking to it and understanding what i am doing well
5. on what condition they dont trade ?
When system says no trade zone or no signal
6. what is their contingency plan[enough is enough..now i am booking loss]
Yes its hyper important if u r day trading commodities or forex
7. what self sabotage u find most difficult to overcome..yet how u have done it ?
None i feel diffcult to trade as trading is not rocket science
8. do u think beginner trader[4yr amateur] can be like u oneday ?if yes. HOW!
1. Understand maths behind indicators before u apply it to charts
2. Design a system and optimized it over instruments u prefer to trade and back test with tick data if possible
3. Foward test it for atleast 6 mo with vast range of instrument and compare with backtested performance
4. Dont belive any idiots who says market is predictable
5. Stick to system even if you see consecutive loosing trades but check you in range of expected drag down limits
6. Apply money managment principles
Hi Oilman
Good set of question. But the problem here is most if not all PROs will never give the proper answers to these questions.
There could be many reasons...
PROs would consider this as exposing their war chest... may reveal their stengths.... as well as the weakness.
In their view all others are enemies ( as CV had put it) because the money one makes from trading is the money somebody else will be losing.
This is a game where the losers play an important role.
Afterall this is their bread and butter .... so the human survival instinct comes into picture.... Though the fact may be a few hundreds in the forum knowing your system would not make anybody a loser...there are millions playing te market.... Also knowing a system does not make a winner... the person executing the system has a large role to play..
Also will a PRO really talk about the losses?? I doubt...I remember somebody telling us in the chat room that he has 90% winners !! 90% winners and he was still working as a sub broker.... mmm... sub broker business was more profitable than trading with 90% success...
I myself am not a PRO. I have a good, satisfying and well paying job. But of course TA is a passion... almost bordering on obsession...
I do lot of study and experiment with lot of indicators ...but my positional trades are mainly based a few simple momentum based cranked up stuff
Ofcourse I do have my losers but overall it has been good. Also the absence of complusion to make money from trading has helped me to become better in my trading .. I suppose..
So me answering the questions put forth by you would be a futile exercise.. I can only guess ...
regards
Karthik
Good set of question. But the problem here is most if not all PROs will never give the proper answers to these questions.
There could be many reasons...
PROs would consider this as exposing their war chest... may reveal their stengths.... as well as the weakness.
In their view all others are enemies ( as CV had put it) because the money one makes from trading is the money somebody else will be losing.
This is a game where the losers play an important role.
Afterall this is their bread and butter .... so the human survival instinct comes into picture.... Though the fact may be a few hundreds in the forum knowing your system would not make anybody a loser...there are millions playing te market.... Also knowing a system does not make a winner... the person executing the system has a large role to play..
Also will a PRO really talk about the losses?? I doubt...I remember somebody telling us in the chat room that he has 90% winners !! 90% winners and he was still working as a sub broker.... mmm... sub broker business was more profitable than trading with 90% success...
I myself am not a PRO. I have a good, satisfying and well paying job. But of course TA is a passion... almost bordering on obsession...
I do lot of study and experiment with lot of indicators ...but my positional trades are mainly based a few simple momentum based cranked up stuff
Ofcourse I do have my losers but overall it has been good. Also the absence of complusion to make money from trading has helped me to become better in my trading .. I suppose..
So me answering the questions put forth by you would be a futile exercise.. I can only guess ...
regards
Karthik
hi karthik,
everybody knows in this forum u and saint r great soul help individual to understand applied ta.u have given all famous strength on trading with max and macd...eod technique./..scope to make money for part time trader.
ur absence of compulsion is valid pt.ur observation may be right[regarding pro]
[ cv answered to me..personally to me he is more than god...a stoic..highest level achievable by a trader]u see ...i have not asked anybodys system...
only some question...to correlate thought process of pros..and how far they r subjective.which may put...their superiority in broad daylight...as i am like u ...believe nothing to hide. ur passion i respect .moreover u r a balanced trader.
with regards
oilman5
everybody knows in this forum u and saint r great soul help individual to understand applied ta.u have given all famous strength on trading with max and macd...eod technique./..scope to make money for part time trader.
ur absence of compulsion is valid pt.ur observation may be right[regarding pro]
[ cv answered to me..personally to me he is more than god...a stoic..highest level achievable by a trader]u see ...i have not asked anybodys system...
only some question...to correlate thought process of pros..and how far they r subjective.which may put...their superiority in broad daylight...as i am like u ...believe nothing to hide. ur passion i respect .moreover u r a balanced trader.
with regards
oilman5
hi all, its better to give pro some more time to show their arsenal.some of them pm to me. so for compilation we can wait. meanwhile let me put view from jesse[ i consider him one of the sharpest trader in india]
Trading successfully is difficult, very difficultThe elements of good trading are: (1) cutting losses.
You have to put indicators in context. They’re background information — never the primary reason for a trade
. the experience of the past few years has emphasized the value of disregarding all considerations except those which relate to price movement, volume and time. If one is endeavoring to realize profits from the principal swings in prices of stocks, it is my opinion that he should disregard fundamental as well as corporate statistics relating to the stocks in which he is trading, stick closely to a study of the action of the market and become deaf and blind to everything else.
There is only one way to achieve success in speculation—through hard work, persistently hard work. If there is any easy money lying around, no one is going to try and give it to me—this I know. My satisfaction always came from beating the market, solving the puzzle. The money was the reward, but it was not the main reason I loved the market. The stock market is the greatest, most complex puzzle ever invented, and it pays the biggest jackpot - Jesse Livermore
A passion for the truth is the essential element of a sound approach to trading. - Chick Goslin
Look at reality. Futures trading is a competition. It is financial warfare. You are trading against thousands of smart, aggressive, extremely well-informed, very well financed, extensively experienced professionals. Look at the facts!
Every trader will be tested emotionally, mentally and monetarily to varying degrees in his career. Most times, it’ll be extremely unpleasant and you’d most likely want to quit right there and then. Only those who can endure this kind of hardship, learn from their mistakes and persevere on will make it.
One of my strengths is the ability to become more aggressive during winning streaks and to do the opposite during a losing streak. This goes against what most people do. You should have a person who has nothing to do with trading who will turn off the trading terminal after a certain amount of losses and send you home; that would save traders thousands.
I am constantly adjusting my trading style to match specific market conditions. For example, on volatile days I generally put fewer orders into the market and execute more directional trades, although I mostly hold them for only a few seconds.
I always set strict daily targets and limits for my profit and loss. The most important element is the stop limit, or simply the size of the loss, which will cause me to turn off my trading screen. I try to liquidate my positions as soon as they start going against me.
You are trading against the wealthiest and most knowledgeable people and organizations in the world.Do not delude yourself, you cannot compete on their terms: information, knowledge, experience, staying power, and so on.Do not spend time and energy trying to figure out why a price moves.Focus all your attention and energy solely on what the price is doing.You are a trader. A trader does not get paid to understand or explain why something has happened. The question "why?" deals with the past. The question "what?" deals with the present and provides the best clues to the future. And never forget that you are trading "futures," not "pasts." Discovering the supposed "why" of a price move will provide you with little more than temporary intellectual comfort. Whereas observing and focusing on what the price has done and is doing will help you anticipate what the price will do in the futureA trader must always feel free to change trading positions on very short notice. And most importantly, you do not need to be good at predicting
That's the problem with amateurs, they only have half a plan, the easy half. They know how much of a profit they're willing to take, but they don't have the foggiest idea how much they're willing to lose. They're like deer in the headlights, they just freeze and wait to get run over. Their plan for a position that goes south is, "Please God, let me out of this and I'll never do it again" but that's bullshit, because if by chance the position turns around, they'll soon forget about God. They'll go back to thinking that they're geniuses, and they'll always do it again, which means that they're sure to get caught, and get caught bad. What most people fail to understand is that while you're losing your money, you're also losing your objectivityThat's why you have to put aside your ego and get out. If you have trouble doing that, as most people do, be like Odysseus: tie yourself to the mast with an automatic stop and take your emotions out of play --------------------------------------------------------------------------------- Speculators and investors who simply guess, follow tips,rumors, newspaper talk and so-called “inside information"have no chance of ever making a success You will make money when you do just the opposite of what the average man or woman tries to do and makes a failure and loses as a result of what they are trying to do
The people who win consistently spend their time refining the basics and making sure they are prepared.
Focus on being profitable for the week - Individual trades may go against you and individual trading days can offer little opportunity. As a senior trader once explained to me, for the active trader, however, there are enough fresh opportunities in a week to make it reasonable to set a goal of being profitable for the week. You won't reach your goal every single week, but the mere act of setting the goal keeps you focused. For example, you don't want to lose so much money in a single day that you can't make it back during the other days of the week. You also don't want to lose so much money on a single trade that you can't come back during the remainder of the day. When you really push yourself to be profitable every week, you don't let individual days get away from you. And when you don't let individual days get away from you, you start managing each trade carefully to ensure that your largest loss won't exceed your largest gain. Time and again I've seen a consistent sign of progress among developing traders: they stop digging themselves into holes.
Always have something to "lean on" - Scalpers will notice heavy and persistent selling at a certain tick, accompanied by large offers in the order book. They'll lean on that information to find a good entry to sell the market. If the offers disappear from the book or if new buyers start lifting those offers in size, they can get out quickly. Knowing you have something to lean on, however, allows you to ride out the noise between entry and exit. As long as what you're leaning on doesn't vanish, you stay with your idea
1) Before you put your capital at risk, have a well-formed trade idea;
2) When your idea pays you out quickly, take some profits;
3) Don't get caught up in individual trades; focus on profitability over a series of trades and days.
It means that success will not be found in better indicators, improved self-help techniques, or any of the endless parade of chart patterns, wave formations, numerology schemes, or moving average arrays.
Rather, success is achieved when we find markets and styles of trading that take maximum advantage of our skills and talents. That keeps us focused on markets and absorbed in them, enabling us--over time--to internalize their patterns.They know that risk control is as important as the other two legs of speculation, selection and timing. That is all this business of commodity trading gets down to, selection, timing, and risk control
May my assessment of today's price action be based upon the facts, all of the facts and nothing but the facts. May I not be influenced by fear, greed or the ill-advised comments of others, which may be made in their interests and not my own. May I take into account the past history laid before me on this chart and make my assessment based on my knowledge, and logic, and not my emotions.
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"Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position. But my greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities." Reminiscences of a Stock Operator
There are 5 important achievements that every successful system trader must make.
1) You must know your own weaknesses. Each of us brings strengths and weaknesses to our own trading. Some find it exceedingly difficult not to tinker or play around with the markets when trading and in the process we don't follow our systems; some find it difficult to pull the trigger; some find it difficult to endure drawdowns of any size. Unless you know how you react to the markets and the pressures and elations of trading, you cannot compensate for your weaknesses.
2) You must understand statistics well enough to understand the limitations of trading using only history as our guide. I am constantly surprised by how many people get this wrong. Even the so-called "experts" in trading.
3) You must learn about trading systems, many of them, many different kinds of systems. In this process, you will learn that there are many answers, many paths to profits, but none of them are as neat and palatable as we might wish.
4) You must learn about brokers, markets, execution, risk, slippage, and other operational issues that affect trading profits. The best way to learn these issues is to start trading somewhere using a small account. It needs to be big enough that the losses matter but not so big that you will bankrupt yourself if you lose the entire account.
5) You must learn about yourself and how you react to all the items 1 to 4 above. This is perhaps the most important knowledge. How to fit your own personality, weaknesses and strengths, into the trading ecosystem. You might find you are bored with long-term system, or that you can't stand looking at screens, or that you need a robobroker to execute since you won't follow your systems closely enough. You will only learn this by being honest with yourself and by reflecting on what works and doesn't.
The best possible way to learn is to sit side by side with someone who knows what they are doing, but this is not possible for most, so you will likely need to find another way.
As far as a specific course of action, which is what you have asked for, I will offer one way that I think works pretty well. If you persevere and if you reflect on your own condition honestly, you have a good chance at success if you follow this course.
1) Buy some testing software and learn some of the well-known systems that work. There are many examples of systems that work out there. Play around with them, change them and see what happens. I'm obviously biased in my opinion of what software you should buy but I leave that decision to you.
2) Read and Study Trading. Initially, I suggest buying the Modus course. It is a very good foundation for people who don't know where to begin.
3) Start trading as soon as you think you are ready. Start small and don't worry about the profits, worry about what you learn about the markets and yourself. Consider your initial losses as tuition that all traders pay.
4) Honestly assess yourself on a regular basis. What did you learn? what are you having trouble with? What do you need to compensate for?
5) Repeat starting at 1).
One thing that troubles many people is the high cost of software and courses. Consider however, the high cost of trading incorretly as the alternative. If you can't afford software, save up until you can. If you can't afford money for a course, you likely can't afford to lose as much money as you will if you start trading without understanding what you are doing.
Last of all, don't be afraid to ask for the advice of others, even to pay for it where appropriate.
Keep one thing in mind, however, sometimes even successful traders are wrong about the reasons for their success. Trader A might think his success is due to his fancy computers and sophisticated algorithms when in reality his success is due to his having a solid foundation and good operational execution.
Trading well is not easy, but it is something you can learn if you have the perseverance combined with the humility to be realistic about your own strengths and weaknesses
For the most part, professional traders, syndicate traders, and the specialists, do not look at these things. They simply do not have the time. Professionals have to act swiftly, as soon as market conditions change, because they are up against other professionals who will act immediately against their interests if they are too slow in reacting to the market. The only way they can respond that fast is to understand and react, almost instinctively, to what the market is telling them. They read the market through volume and its relationship to price action[If you do find a colleague who is consistently correct, either learn his system so that you can use his tools with your own intuition and experience or delegate part of your trading strategy development to him.]To play the market properly requires silence, and seclusion to examine the situation, and to appraise, and deliberate on new information that comes to hand during the trading day. One must always have a clear strategy to play the market and clear rules to follow.
at least with regarding making decisions. If you can put aside what should be, what could be, what ought to be, what would have, could have, should have occurred, and just pay attention to what is actually happening, the act of paying attention transforms what is. The greatest action, the wisest, the best action that you can take in almost any situation is to stay with what is, instead of jumping to conclusions or trying to come up with conclusions.
I think one mistake novice traders make is that they begin trading before they have any real idea what they are doing. They are active, but they are not accomplishing anything. I hardly spend any time trading. Over 99 percent of my time is spent on the computer, doing research.
1]What markets are you going to trade? You need to select a market that fits your personality because a market is reflection of the people who trade it.
2)What is your trading capitalization? On the one hand, you should honestly be able to say, "If I lose all this money, won't change my lifestyle." On the other hand, you need a large enough account so that making at least as much as you do from your current job is a feasible goal. Otherwise, you will think that you are a failure because you will work harder as a trader than you do at the job you are in now.
3)How will orders be entered? Will you scale into positions or put them on all at once? How will you exit losing trades? How will you exit winning trades?What type of drawdown will cause you to stop trading and reevaluate your approach? What type of drawdown will cause you to shut down trading?
4)What are your profit goals, measured on as short a time frame as is feasible for your trading approach?
5)What procedure will you use for analyzing your trades?
6)What will you do if personal problems arise that could adversely impact your trading?
7)How will you set up your working environment so that it is conducive to trading and maximizes your chances for success
People underestimate the time it takes to succeed as a trader. Some people come here and think they can sit with me for a week and become great traders. How many people when they went to college would've thought to walk up to the professor and say, "I know the course is for a semester, but I think a week should be enough for me to get it." Gaining proficiency is the same in trading as in any other profession—it requires experience, and experience takes time. A man few years ago asked me, "How long will it take me to become a professional trader so 1 can quit my job and support my family?"
"Three to five years," I said.
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"It is the very foundation of strategy to be able to adapt to any situation and continue fighting without losing heart. You gain this ability by practicing day in and day out with intensity." --Miyamoto Musashi
Just so a chart of the averages, or of a single stock, reflects the ideas, hopes, ambitions and purposes of the mass mind operating in the market, or of a manipulator handling a single stock. But when a student undertakes to read from his charts the purposes and objective of those who are responsible for a stock's action in the market, he is beginning to see, in a true light, the meaning of scientific stock speculation
As traders, we cannot afford the luxury of wishing and hoping because it puts us in a passive relationship with the markets. When we wish and hope, we are shifting responsibility on to the markets for making something happen instead of confronting the conditions and doing something about it ourselves. If we find ourselves wishing and hoping, it is an excellent indication that we don't know what is going on and as a result need to get out of the markets until we do.
The movement of price in any and all free markets is a function of the laws of pure supply and demand. Buying and selling opportunity emerges when this simple and straight forward relationship is out of balance.
"It is very important to visualize the many ways in which the market may unfold, rather than trying to forcast or predict how it will unfold. With a market understanding, you can begin to visualize each possibilitySuccessful real-time traders have a far better chance of taking their successful trading techniques and applying them to automated trading systems .
kudos to cv,
oilman5
Trading successfully is difficult, very difficultThe elements of good trading are: (1) cutting losses.
You have to put indicators in context. They’re background information — never the primary reason for a trade
. the experience of the past few years has emphasized the value of disregarding all considerations except those which relate to price movement, volume and time. If one is endeavoring to realize profits from the principal swings in prices of stocks, it is my opinion that he should disregard fundamental as well as corporate statistics relating to the stocks in which he is trading, stick closely to a study of the action of the market and become deaf and blind to everything else.
There is only one way to achieve success in speculation—through hard work, persistently hard work. If there is any easy money lying around, no one is going to try and give it to me—this I know. My satisfaction always came from beating the market, solving the puzzle. The money was the reward, but it was not the main reason I loved the market. The stock market is the greatest, most complex puzzle ever invented, and it pays the biggest jackpot - Jesse Livermore
A passion for the truth is the essential element of a sound approach to trading. - Chick Goslin
Look at reality. Futures trading is a competition. It is financial warfare. You are trading against thousands of smart, aggressive, extremely well-informed, very well financed, extensively experienced professionals. Look at the facts!
Every trader will be tested emotionally, mentally and monetarily to varying degrees in his career. Most times, it’ll be extremely unpleasant and you’d most likely want to quit right there and then. Only those who can endure this kind of hardship, learn from their mistakes and persevere on will make it.
One of my strengths is the ability to become more aggressive during winning streaks and to do the opposite during a losing streak. This goes against what most people do. You should have a person who has nothing to do with trading who will turn off the trading terminal after a certain amount of losses and send you home; that would save traders thousands.
I am constantly adjusting my trading style to match specific market conditions. For example, on volatile days I generally put fewer orders into the market and execute more directional trades, although I mostly hold them for only a few seconds.
I always set strict daily targets and limits for my profit and loss. The most important element is the stop limit, or simply the size of the loss, which will cause me to turn off my trading screen. I try to liquidate my positions as soon as they start going against me.
You are trading against the wealthiest and most knowledgeable people and organizations in the world.Do not delude yourself, you cannot compete on their terms: information, knowledge, experience, staying power, and so on.Do not spend time and energy trying to figure out why a price moves.Focus all your attention and energy solely on what the price is doing.You are a trader. A trader does not get paid to understand or explain why something has happened. The question "why?" deals with the past. The question "what?" deals with the present and provides the best clues to the future. And never forget that you are trading "futures," not "pasts." Discovering the supposed "why" of a price move will provide you with little more than temporary intellectual comfort. Whereas observing and focusing on what the price has done and is doing will help you anticipate what the price will do in the futureA trader must always feel free to change trading positions on very short notice. And most importantly, you do not need to be good at predicting
That's the problem with amateurs, they only have half a plan, the easy half. They know how much of a profit they're willing to take, but they don't have the foggiest idea how much they're willing to lose. They're like deer in the headlights, they just freeze and wait to get run over. Their plan for a position that goes south is, "Please God, let me out of this and I'll never do it again" but that's bullshit, because if by chance the position turns around, they'll soon forget about God. They'll go back to thinking that they're geniuses, and they'll always do it again, which means that they're sure to get caught, and get caught bad. What most people fail to understand is that while you're losing your money, you're also losing your objectivityThat's why you have to put aside your ego and get out. If you have trouble doing that, as most people do, be like Odysseus: tie yourself to the mast with an automatic stop and take your emotions out of play --------------------------------------------------------------------------------- Speculators and investors who simply guess, follow tips,rumors, newspaper talk and so-called “inside information"have no chance of ever making a success You will make money when you do just the opposite of what the average man or woman tries to do and makes a failure and loses as a result of what they are trying to do
The people who win consistently spend their time refining the basics and making sure they are prepared.
Focus on being profitable for the week - Individual trades may go against you and individual trading days can offer little opportunity. As a senior trader once explained to me, for the active trader, however, there are enough fresh opportunities in a week to make it reasonable to set a goal of being profitable for the week. You won't reach your goal every single week, but the mere act of setting the goal keeps you focused. For example, you don't want to lose so much money in a single day that you can't make it back during the other days of the week. You also don't want to lose so much money on a single trade that you can't come back during the remainder of the day. When you really push yourself to be profitable every week, you don't let individual days get away from you. And when you don't let individual days get away from you, you start managing each trade carefully to ensure that your largest loss won't exceed your largest gain. Time and again I've seen a consistent sign of progress among developing traders: they stop digging themselves into holes.
Always have something to "lean on" - Scalpers will notice heavy and persistent selling at a certain tick, accompanied by large offers in the order book. They'll lean on that information to find a good entry to sell the market. If the offers disappear from the book or if new buyers start lifting those offers in size, they can get out quickly. Knowing you have something to lean on, however, allows you to ride out the noise between entry and exit. As long as what you're leaning on doesn't vanish, you stay with your idea
1) Before you put your capital at risk, have a well-formed trade idea;
2) When your idea pays you out quickly, take some profits;
3) Don't get caught up in individual trades; focus on profitability over a series of trades and days.
It means that success will not be found in better indicators, improved self-help techniques, or any of the endless parade of chart patterns, wave formations, numerology schemes, or moving average arrays.
Rather, success is achieved when we find markets and styles of trading that take maximum advantage of our skills and talents. That keeps us focused on markets and absorbed in them, enabling us--over time--to internalize their patterns.They know that risk control is as important as the other two legs of speculation, selection and timing. That is all this business of commodity trading gets down to, selection, timing, and risk control
May my assessment of today's price action be based upon the facts, all of the facts and nothing but the facts. May I not be influenced by fear, greed or the ill-advised comments of others, which may be made in their interests and not my own. May I take into account the past history laid before me on this chart and make my assessment based on my knowledge, and logic, and not my emotions.
--------------------------------------------------------------------------------
"Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position. But my greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities." Reminiscences of a Stock Operator
There are 5 important achievements that every successful system trader must make.
1) You must know your own weaknesses. Each of us brings strengths and weaknesses to our own trading. Some find it exceedingly difficult not to tinker or play around with the markets when trading and in the process we don't follow our systems; some find it difficult to pull the trigger; some find it difficult to endure drawdowns of any size. Unless you know how you react to the markets and the pressures and elations of trading, you cannot compensate for your weaknesses.
2) You must understand statistics well enough to understand the limitations of trading using only history as our guide. I am constantly surprised by how many people get this wrong. Even the so-called "experts" in trading.
3) You must learn about trading systems, many of them, many different kinds of systems. In this process, you will learn that there are many answers, many paths to profits, but none of them are as neat and palatable as we might wish.
4) You must learn about brokers, markets, execution, risk, slippage, and other operational issues that affect trading profits. The best way to learn these issues is to start trading somewhere using a small account. It needs to be big enough that the losses matter but not so big that you will bankrupt yourself if you lose the entire account.
5) You must learn about yourself and how you react to all the items 1 to 4 above. This is perhaps the most important knowledge. How to fit your own personality, weaknesses and strengths, into the trading ecosystem. You might find you are bored with long-term system, or that you can't stand looking at screens, or that you need a robobroker to execute since you won't follow your systems closely enough. You will only learn this by being honest with yourself and by reflecting on what works and doesn't.
The best possible way to learn is to sit side by side with someone who knows what they are doing, but this is not possible for most, so you will likely need to find another way.
As far as a specific course of action, which is what you have asked for, I will offer one way that I think works pretty well. If you persevere and if you reflect on your own condition honestly, you have a good chance at success if you follow this course.
1) Buy some testing software and learn some of the well-known systems that work. There are many examples of systems that work out there. Play around with them, change them and see what happens. I'm obviously biased in my opinion of what software you should buy but I leave that decision to you.
2) Read and Study Trading. Initially, I suggest buying the Modus course. It is a very good foundation for people who don't know where to begin.
3) Start trading as soon as you think you are ready. Start small and don't worry about the profits, worry about what you learn about the markets and yourself. Consider your initial losses as tuition that all traders pay.
4) Honestly assess yourself on a regular basis. What did you learn? what are you having trouble with? What do you need to compensate for?
5) Repeat starting at 1).
One thing that troubles many people is the high cost of software and courses. Consider however, the high cost of trading incorretly as the alternative. If you can't afford software, save up until you can. If you can't afford money for a course, you likely can't afford to lose as much money as you will if you start trading without understanding what you are doing.
Last of all, don't be afraid to ask for the advice of others, even to pay for it where appropriate.
Keep one thing in mind, however, sometimes even successful traders are wrong about the reasons for their success. Trader A might think his success is due to his fancy computers and sophisticated algorithms when in reality his success is due to his having a solid foundation and good operational execution.
Trading well is not easy, but it is something you can learn if you have the perseverance combined with the humility to be realistic about your own strengths and weaknesses
For the most part, professional traders, syndicate traders, and the specialists, do not look at these things. They simply do not have the time. Professionals have to act swiftly, as soon as market conditions change, because they are up against other professionals who will act immediately against their interests if they are too slow in reacting to the market. The only way they can respond that fast is to understand and react, almost instinctively, to what the market is telling them. They read the market through volume and its relationship to price action[If you do find a colleague who is consistently correct, either learn his system so that you can use his tools with your own intuition and experience or delegate part of your trading strategy development to him.]To play the market properly requires silence, and seclusion to examine the situation, and to appraise, and deliberate on new information that comes to hand during the trading day. One must always have a clear strategy to play the market and clear rules to follow.
at least with regarding making decisions. If you can put aside what should be, what could be, what ought to be, what would have, could have, should have occurred, and just pay attention to what is actually happening, the act of paying attention transforms what is. The greatest action, the wisest, the best action that you can take in almost any situation is to stay with what is, instead of jumping to conclusions or trying to come up with conclusions.
I think one mistake novice traders make is that they begin trading before they have any real idea what they are doing. They are active, but they are not accomplishing anything. I hardly spend any time trading. Over 99 percent of my time is spent on the computer, doing research.
1]What markets are you going to trade? You need to select a market that fits your personality because a market is reflection of the people who trade it.
2)What is your trading capitalization? On the one hand, you should honestly be able to say, "If I lose all this money, won't change my lifestyle." On the other hand, you need a large enough account so that making at least as much as you do from your current job is a feasible goal. Otherwise, you will think that you are a failure because you will work harder as a trader than you do at the job you are in now.
3)How will orders be entered? Will you scale into positions or put them on all at once? How will you exit losing trades? How will you exit winning trades?What type of drawdown will cause you to stop trading and reevaluate your approach? What type of drawdown will cause you to shut down trading?
4)What are your profit goals, measured on as short a time frame as is feasible for your trading approach?
5)What procedure will you use for analyzing your trades?
6)What will you do if personal problems arise that could adversely impact your trading?
7)How will you set up your working environment so that it is conducive to trading and maximizes your chances for success
People underestimate the time it takes to succeed as a trader. Some people come here and think they can sit with me for a week and become great traders. How many people when they went to college would've thought to walk up to the professor and say, "I know the course is for a semester, but I think a week should be enough for me to get it." Gaining proficiency is the same in trading as in any other profession—it requires experience, and experience takes time. A man few years ago asked me, "How long will it take me to become a professional trader so 1 can quit my job and support my family?"
"Three to five years," I said.
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"It is the very foundation of strategy to be able to adapt to any situation and continue fighting without losing heart. You gain this ability by practicing day in and day out with intensity." --Miyamoto Musashi
Just so a chart of the averages, or of a single stock, reflects the ideas, hopes, ambitions and purposes of the mass mind operating in the market, or of a manipulator handling a single stock. But when a student undertakes to read from his charts the purposes and objective of those who are responsible for a stock's action in the market, he is beginning to see, in a true light, the meaning of scientific stock speculation
As traders, we cannot afford the luxury of wishing and hoping because it puts us in a passive relationship with the markets. When we wish and hope, we are shifting responsibility on to the markets for making something happen instead of confronting the conditions and doing something about it ourselves. If we find ourselves wishing and hoping, it is an excellent indication that we don't know what is going on and as a result need to get out of the markets until we do.
The movement of price in any and all free markets is a function of the laws of pure supply and demand. Buying and selling opportunity emerges when this simple and straight forward relationship is out of balance.
"It is very important to visualize the many ways in which the market may unfold, rather than trying to forcast or predict how it will unfold. With a market understanding, you can begin to visualize each possibilitySuccessful real-time traders have a far better chance of taking their successful trading techniques and applying them to automated trading systems .
kudos to cv,
oilman5
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