Trading for a Living - Cliff Notes

Does it matter?

"If a fool speaks the truth. It is still the truth."

The nature of the trading business

Consider the following: As a trader you are in a business. Your strongest opponent has plenty of capital. He follows a program and he does it without emotion. He is totally aware of the fact that no one knows where the next tick will fall. Whereas he usually has good insights regarding the major forces that drive the market, he does not fool himself into thinking he can explain the vagrancies of price movement intraday or even from day to day. He knows that no one truly can. The successful trader has learned his lessons by actually trading. This is a business driven by fear, greed, and selfishness, and very few worthwhile pointers are given out by the industry, other traders, or the myriad of so-called trading gurus who plague the pages of trading magazines and pages of their websites. The most valuable information is closely guarded and not often put in books or on web pages.Learning about trading is a ‘forever’ experience. As the markets change and as we adjust to them, we learn. The learning is ongoing, it stops only when you no longer trade. During the time we trade we can always improve. Trading is a great business for those who master it, and those who master it are traders who have mastered themselves.

By Joe Ross


Does anyone see the dichotomy?

If no one knows the next tick what "valuable information" can they have? It is my opinion that this is the "myth" of the market... someone, somewhere has some "valuable information" that will allow one to profit from trading.

In Forex, currencies get stronger or weaker resulting in currency pairs rising or falling. What other "valuable information" can there be?

i think we are going a bit off topic with these debates i don't care about this friar-trader....
the original thread was good

When you hit a large lick, (or whatever the kids are calling it these days) TAKE A HEALTHY CHUNK OF THE MONEY OUT.

Rule No.1 in this thread is solid gold, solid..., BUT, there are many struggling to find a balance between their risk tolerance and what they expect out of the market for the time they spend. Bemac's classification of traders helped me understand who I am at this point in time hence my avatar's subtitle of gun slinger. When something looks good, I throw my account at it, well, a fairly large chunk of it, until it doesn't look good. That's how I run my show. If I understood money management earlier on things might be different, but how I don't know really, less headaches for sure, but not sure about profit. Anyway, I'm positive there are lots of newbs (myslelf not excluded) that think no stops is the way to go. The problem is the lack of discipline required to put your foot down and accept having just plain screwed up when price comes back to your entry after a few minutes, hours or days. I've been there many a time. And it takes a strong stomach to admit when what you thought was resistance has now become support and vice versa. I still struggle with that, but I've been in the game just long enough to make it work out in the end (so far). My post history is testament to that. I just feel that there a few out there that may be better at stomaching risk than most and I don't want them to short change themselves when they actually do have something going for themselves, despite the wild ups and downs, that IS working for them in the end.

I've been making a living doing this since november2008. Full disclosure, lost 200% of initial deposit, before learning the ropes. Losses, plus wins, since the beggining puts me at about 145% ROI (105% WITHDRAWN!) of those losses now. My house is paid for. No rent, no mortgage (whoah! NOT paid for by trading!), I have livestock that I sell as well as consume and I pretty much live like a monk anyway (except when I'm on one of the many islands here in Greece, I never pay tourist prices so it works out for me) . My SITUATION is special, so that is why I say rule no. 1 of this thread is solid gold, because it is. Is the alternative possible? YES, I'm right here!, but so is winning the lottery. I never played the lottery, not even those darned scratch and wins, hell, I don't even know any card games. Given the stress I stomach to make it worth my while, I would say take a big freakin' step back if you don't have the criteria mentioned near the beginning of this thread for trading for a living. I say it not because I am special and you can't do what I do (hell, let's see if I'm still here next year), but because my circumstances ARE special compared to a whole lot of folks (let's say 95%). If I'm special at all, it's for organizing the circumstances of my life to allow me to take risks, MUCH more so than my trading.

Regardless.... thankfully my hair is starting to grow back this year. It started falling out in patches during the learning curve (which never freakin' ends, oh oh.). Now that was too much stress.

If I tried what I'm doing now, living like I lived in Toronto or Montreal, I think I would have ended up in rehab.

Wish you all the best of luck and hope there is something to be gleamed from this post regarding risk. Most of the week I am glued to my 1M chart and with a connection that runs akin to 56k (on a good day), there is no such thing as posting between trades. I'm grateful to this community for being just that, a community. Trading is without a doubt one of the loneliest occupations on the planet, especially out here. Lonely as it may be, trading from da hood rocks.

sepentdove let me say thank you for posting about your lifesstyle and trading. You trade while keeping your lifestyle simple and this very important for newbies and those starting out trading for a living.

It helps to have a "job " on the side like yourself with the livestock.
To newbies out there find the time you like trading and get a job around that schedule even if it is a fast food job at Mcdonalds . I mean that.

for those with families continue working at your job while trading at hours that you can trade . be consistent at it.discipline.

In that case the next lesson is on the way.

m

Lesson (Lost Count): Learn to Trade.

A system doesn’t constitute trading… it’s only one variable.

You don’t learn to trade over night.

Trading is a process.

It takes time… and there’s no circumventing that

The good news is it’s not like playing chess against Kasparov… there’s one winner in that game and it ain’t you.

There are thousands of winners who take the time to learn how to trade.

Cobra will take care of that for you, lol.

Boy, you ain't kiddin'. I learned the basics about trading pretty quickly, but am still learning how to trade. I suppose that part never ends.

Very well said, good luck.

I am so glad I found this thread. Thank you so much Acumen for setting this up and being so willing to share your experience and knowledge with a view to helping beginners like me to learn to trade.

Like some others have already said, I've seen some other threads where too many opinions get thrown around and lots of bickering starts. I lose interest at that point.

I really appreciate your clear, straightforward concise way of explaining things and your courtesy, and it is my hope that anyone contributing to this thread will be mindful of trying to do the same... because this is such a valuable thread and it would be a such darn shame to spoil it with too much un-necessary noise.

Welcome to the thread and the factory.

Appreciate the words.

m

Note: This was also posted on e/u thread.

I'm not a fan of trading the open.

The u/j about fell off the chart last week so to say it's trending downward is probably insulting most of you... either way... it's trending downward.

On the open it went north... don't know why so I scour the news... in case something novel lifted it. Nope... no valid reason I could find so... I look for an entry.

The chart is pretty self explanatory. Lot's of confluence.

1) The big psych level (93.00)
2) S1
3) Previous resistance near S1.

That's plenty to take a couple of scalps in the direction of the trend.

Sure... It's only a few PIPS... but I'm a crumb snatcher.

Yep... I was pretty sure it was headed back to the PP... so I should have held on but I trade the open like terrier who just finished an 8 ball.

Start looking at areas of confluence to take trades.

Mike

There seems to be an attitude among some traders that it is not possible to scalp and make it profitable in the long run. I did for a short time but because of lifestyle changes I am trading H1 (still scalping for some). So I have two questions:

1. What really is considered "scalping", by the institutional traders as opposed to the varying opinions here?

2. Why is there such an attitude towards scalping?

Whats the link to the 00-20 and 00-80 strategy. Curious

Me too.

Thanks for the welcome.

I think the lined is blurred between what scalping is and what day trading is.

I use the term scalp often when I really mean day trade.

I would think most purists would say scalping is trading multiple lots and looking for 3-5 PIPS and then out.

I 'scalp' by will often look for 10-20 PIPS on a trade.

Honestly - I'm not sure why it's so hated.

My guess is that traders new to the game are applying larger leverage than they should and getting killed.

I'm the last place you'd want to look for purity, but hey I'll take it...

Are you a scalper Fool?

3 - 5 and then out?

How many round trips to make a day? (Lot's of trades... like 200)

Thanks.

m

That mostly but I let some run for more if they were placed well. Even good longer plays I will cut short typically like 20 pips. Occasionally I'll space out and one will run for 100.

Usually have 2-5 entries at a time. I am doing this around other work so I don't have consistent time dedicated, but when I do I am doing 15-20 per hour max. I can not at this point even conceive of 200/day but I suppose with practice one could get that done.

I honestly believe scalping is the safest, highest probability & potentially most
lucrative style -for me - now, anyway. I could see making a consistent living from a 5-figure account. I wonder about whether I would eventually get bored with it, though....so I am trying to learn to trade longer-term, as well.

The word scalping is often missused and is hated and loved, something like the forbidden apple in paradise.

I learned only scalping when I started to trade and do it until today with consistence.

I have a certain capital which I’m trading and can’t effort to trade a 1H chart with 2 or 3 standard lots on 100 pip SL/trade with proper MM.

BTW: My trading capital is every month the same, in a good month I withdraw, in a bad I deposit, you didn't gain anything untill you cash it.
I don't have all my capital in the brokers account as I risk only 2% max a trade and quit the session in case of 4 bad trades in row, so I can always fund it in case of a bad strike.

Most of my trades are ultra short timed (10 sec to 1M charts), high Pip value (depends on the probability of the trade) and aiming for 3 to 10 pips per trade.

I usually have about 20 trades a session (the London session) aiming for 40 pips daily goal.

My favorite entries are on bounce or break of Pivots, S&R (on higher TF’s) and fib levels.

Since about two month I’m trading also mini lots on another account on 1H and 4H charts, learning longer term trading. The big difference is the MM, the technical part is almost the same.
My advantage on Longer term trading as an scalper is that I mostly find good entries which guaranty relative low SL levels.


Tomorrow I'll be back in office to update the PDF file for the lessons.