Thought I'd open a new thread aimed specifically at people new to trading who want to have some idea, with the vast amount of information out there, what to focus on doing and what to avoid wasting time on.
This won't be a thread I will comment much on because I've already written quite a lot of stuff on my other threads, but so as not to have to trawl through those, I'll pose a series of questions.
When I first started out ten years ago, I consider that I wasted a lot of time not really knowing where or how to focus my energies, and finding my way as it were was a slow learning process. The method I now have is really the product of the slow accumulation of knowledge, and not something I believe anyone new to trading would make much sense of. I think it is the same for all of us. Whatever approach we all have however, we do all have one fundamental thing in common, which is to make as much money in as little amount of time as possible, as no one I know is in this profession for the fun of it - we are all here to make money.
I'll leave the questions open for discussion. They are in no order of importance.
1/ How much time have I got? Am I prepared to stick this for the long haul, no matter how long it takes, or am I looking for a fast buck?
2/ How much money have I got to invest in this? If plenty, say a few thousand at least, then what time frame should I start studying, assuming that I should be working on risking no more than 1% of my capital on any one trade( more in my opinion is unwise ). If I only have a few hundred or less,then I cannot afford to trade the big time frames, as anything larger than 5 mins is going to require a wider stop loss than I can afford. But surely the smaller the time frame, the more difficult it is going to be for me to read the market?
3/ What do I need to know? Should I read loads of books, read the financial Times, stay glued to Bloomberg all day? Do I need to understand economics better than I do, study currency and equity correlations, or should I just study price action and forget about everything else?
4/ How shall I start trading live? When should I start trading live? How about demo trading - should I bother with it, or just go straight onto a micro account when I am ready. How will I know when I'm ready?
5/ What indicators are best - there are so many. Which indicators do the successful traders use? How do I find this out?
6/ Psychology? Do I need to prepare myself, or have I already got what it takes. After all, I've always been a pretty psychologically strong person, so I shouldn't have a problem in this department? Should I even worry about it?
7/ How much studying do I need to do? How much time have I got to study? How long will I need to master this stuff - 6 months, a year, five years?
8/ There has to be a secret to trading, it cannot be so hard. After all, price only does three things - it goes up, down, and sideways. What exactly do I need to focus on to discover why it moves when it moves? What are the pros focusing on? Is everything I need to know on my screens, or do I need to also be looking elsewhere?
9/ Should I find a mentor/teacher to guide me. It'll cost money, but it may shorten the learning curve?
10/ Am I wasting my time? Should I waste my time? Most fail in this business, around 90% will never make a consistent profit. Why? Won't I be the same? What are the 10% doing that all the others aren't doing? What do I need to do to be make it into the 10%? Am I smart enough for this? I was terrible at Maths at school!
11/ Is this really what I want to spend my life doing? Sitting on my own day after day in a small office/room, with no colleagues, no status, and actually only a very small chance that I'll ever make any money at it, I mean hell, I could commit five years of my life and end up worse off than I am now. I've got to think about this for a minute.
12/ How many time frames do I need to look at? just the one, or several? How about pairs? What should I trade? How many should I trade? Are they all the same - if I trade one, can I trade them all? How about equities and commodities? Are they easier or harder, and do they require more capital to trade?
Okay, that's all that swam off the top of my head., and apologies if one or two of them overlapped a little. Feel free to comment, add, whatever. There is a lot to know to make consistent money as a trader, or perhaps there isn't? Perhaps the more we know the more we think we have to know. I don't know!
This won't be a thread I will comment much on because I've already written quite a lot of stuff on my other threads, but so as not to have to trawl through those, I'll pose a series of questions.
When I first started out ten years ago, I consider that I wasted a lot of time not really knowing where or how to focus my energies, and finding my way as it were was a slow learning process. The method I now have is really the product of the slow accumulation of knowledge, and not something I believe anyone new to trading would make much sense of. I think it is the same for all of us. Whatever approach we all have however, we do all have one fundamental thing in common, which is to make as much money in as little amount of time as possible, as no one I know is in this profession for the fun of it - we are all here to make money.
I'll leave the questions open for discussion. They are in no order of importance.
1/ How much time have I got? Am I prepared to stick this for the long haul, no matter how long it takes, or am I looking for a fast buck?
2/ How much money have I got to invest in this? If plenty, say a few thousand at least, then what time frame should I start studying, assuming that I should be working on risking no more than 1% of my capital on any one trade( more in my opinion is unwise ). If I only have a few hundred or less,then I cannot afford to trade the big time frames, as anything larger than 5 mins is going to require a wider stop loss than I can afford. But surely the smaller the time frame, the more difficult it is going to be for me to read the market?
3/ What do I need to know? Should I read loads of books, read the financial Times, stay glued to Bloomberg all day? Do I need to understand economics better than I do, study currency and equity correlations, or should I just study price action and forget about everything else?
4/ How shall I start trading live? When should I start trading live? How about demo trading - should I bother with it, or just go straight onto a micro account when I am ready. How will I know when I'm ready?
5/ What indicators are best - there are so many. Which indicators do the successful traders use? How do I find this out?
6/ Psychology? Do I need to prepare myself, or have I already got what it takes. After all, I've always been a pretty psychologically strong person, so I shouldn't have a problem in this department? Should I even worry about it?
7/ How much studying do I need to do? How much time have I got to study? How long will I need to master this stuff - 6 months, a year, five years?
8/ There has to be a secret to trading, it cannot be so hard. After all, price only does three things - it goes up, down, and sideways. What exactly do I need to focus on to discover why it moves when it moves? What are the pros focusing on? Is everything I need to know on my screens, or do I need to also be looking elsewhere?
9/ Should I find a mentor/teacher to guide me. It'll cost money, but it may shorten the learning curve?
10/ Am I wasting my time? Should I waste my time? Most fail in this business, around 90% will never make a consistent profit. Why? Won't I be the same? What are the 10% doing that all the others aren't doing? What do I need to do to be make it into the 10%? Am I smart enough for this? I was terrible at Maths at school!
11/ Is this really what I want to spend my life doing? Sitting on my own day after day in a small office/room, with no colleagues, no status, and actually only a very small chance that I'll ever make any money at it, I mean hell, I could commit five years of my life and end up worse off than I am now. I've got to think about this for a minute.
12/ How many time frames do I need to look at? just the one, or several? How about pairs? What should I trade? How many should I trade? Are they all the same - if I trade one, can I trade them all? How about equities and commodities? Are they easier or harder, and do they require more capital to trade?
Okay, that's all that swam off the top of my head., and apologies if one or two of them overlapped a little. Feel free to comment, add, whatever. There is a lot to know to make consistent money as a trader, or perhaps there isn't? Perhaps the more we know the more we think we have to know. I don't know!
