Introduction and request for advice

Hi everyone, my first post in the forum.

I have been lurking and reading for the last few days and the amount of information available on these forums is astonishing but a bit overwhelming.

Some history about myself and my trading:

- I’m 30, based in South Africa, and have a full daytime job as accountant.

- I’ve always been interested in markets and trading so have some knowledge about the markets, fundamentals, technical analysis etc. I have a decent equity share portfolio which I have built up over the last few years but this is a long term investment. Mostly South African shares listed on the Johannesburg Stock Exchange.

- For the last four years I’ve earned a very nice second income by playing online poker in the evenings and over weekends. I believe there are a lot of similarities between poker and trading. You have to put in a lot of hard work and studying, then be very disciplined, have a lot of patience, apply proper money management, and you have to be able to control your emotions at all times. The last few months have been slower though and I’ve also become bored with playing poker.

- I’ve played around on the Oanda FX game irregularly for the last three years, mostly just taking trades based on support/resistance levels or gut feel, then resetting fund balances and profit/losses after some unsuccessful trades.

- I’ve played around with South African equity options and agricultural futures contracts but my decisions were more based on what others say than my own research. I’ve always taken a conservative approach though.

- About a year ago I decided to give trading a serious go, I bought a few of the recommended books on forex and futures trading, read some parts of them, opened an account at Interactive Brokers and deposited $5000.

- I took a subscription with Puretick and started trading the YM. My intention was to stick to the Puretick signals but I soon started overtrading, taking some other trades suggested by people in the chat room, and then some of my own trades. I was also often late on the Puretick signals and my account balance also didn’t allow me trading more than one contract at a time.

- I basically lost money on most of the trading days until my account dipped below $2000 and I wasn’t allowed to trade any further. I gave up. My account is now at about $1400 and I’m paying a lot of monthly fees for nothing.

For the last week I’ve started playing around on the Oanda game again, I’m spending hours reading some forum posts etc and I take my trading books to bed when I go to sleep. I’ve downloaded Metatrader and played around a bit. Basically all I can think about is trading.

I really want to become a successful trader and I’m willing to do whatever it takes. I realize it will not happen overnight.

I have $20,000+ in cash available for trading but really want to keep away from significant real money trading until I’m confident with an instrument and trading style. I don’t want to blow another account and I’d prefer to start with a lesser amount.

At the moment I feel really lost, where do I take it from here? If a person asks me to teach them how to become a profitable poker player I think I can provide them with a very good guideline on one page. It will then be up to that person to put in the hard work.

I just find the whole trading environment a bit overwhelming. There are just so many instruments, timeframes, brokers, software packages, strategies, indicators, books etc. Just where do I start?

I’ve decided to try the forex market for now. How do I decide which currency pair/s to trade, which type of trading and which timeframes? I would prefer active trading where I can do a few trades in a 2 to 5 hour session and not have overnight positions.

At the moment I have 2 – 5 hours available daily, how do I spend it best to enable me to become a profitable trader?

Any advice will be really appreciated. And flame me if necessary, I will take it like a man.

Did you receive my message that I sent you by e-mail pasopvirpot? I'll gladly explain & help eliminate the confusion you're having. I don't believe that what you're requesting can simply be resolved by someone answering your concerns with a few strokes of the keyboard & a few clicks of the mouse and presto!!!!

Couple of things that might help:

-When looking for a method, the method has to fit the trader. Not the other way around.

-The hard part is not finding an edge in the market to exploit, but rather having the discipline to stick to that edge constistantly.

-No matter what method you decide to utilize, always know the exact amount of equity that you are risking by putting a stop loss in at the time the order is placed.

My personal suggestion? Start with higher time frames (weekly, daily, 4hr, 1hr) and learn ONE method that you can stick to. There are plenty of consistantly profitable, backtested, forward tested systems on this site. But I would pick one of the simpler ones. Maybe one based off of support/resistance, or a breakout strategy.

When you are trading with real money, focus on making good trades, not making money. A good trade taken according to your trading criteria is still a good trade if it ends up stopping you out. Likewise a bad trade is still a bad trade even if it ends up a winner.

Hope something there helped.

Thanks mayo did get the email and replied.

STOP NOW!
Stop listening to others' advice on which trade to take. The prejorative is 95% of traders fail; do you think those other people are all in the 5%?
Trade one symbol. If you don't know how to trade one symbol, how can you trade a dozen?
Expect to lose. You're betting against thousands of people, not four or five. You think you can know what they'll do?

I read somewhere that the best traders are there because of their skill, just as you say you are in poker. Yes, you use gut instinct in trading, too; it seems you overwhelmed your gut's ability to discern what to do, though.
Your technical approach sounds very like Livermore's in his Reminiscences of a Stock Operator (related thread here). He trained his gut through years of tick-watching and recording their numbers' cycles.

So, put in your time in front of the screen. At this point, you have too much emotion in your trading, so the less-real demo platforms are okay, and trading for pennies may serve as well. For your method, either keeping your trades longterm, simple and spare, in which case one of the top commercial threads (Silent System, James16, Jacko) is fine, or putting in 10,000 hours of realtime chartwatching to daytrade, where, from a pro, losing two thirds of your trades is common, are a few reliable options. What you're doing now, letting your losers run, is not an option. I once read a book on poker playing here (posts 76-80): You already have under your fingertips valuable money management skills to apply this.

I'm not profitable either; only, I do have those 10k hours, and have had the good fortune to read ff for a year. This place has done me a lot of good.

Best of luck, and if I was mistaken, sorry.

P.S. $20,000 is nothing. (Had to laugh.) How you use it is what counts.
And you're not paying those fees for nothing. You're in training.
Of course, money's nothing until you don't have it. So don't lose any.
Or it's a really bleak road; been there.
And 2004, I broke even trading, and paid thousands in fees. So, I know what you're saying about this.

I thought Interactive Brokers had a minimum of $10,000. They did when I joined them. When did they change this?

I'd say close your $1,400 account. Sent $100 to a broker which offer nanolot and play by the cent.

If you got trouble with your emotion, playing with real money is a faster way to learn than demo. But play it as small as possible. There's a high possibility you blow up the first several $100 accounts. But at least you have a reserve so you can afford that.

Concentrate on taming yourself, controlling your emotion, by focusing on the execution of your game plan instead of how much money you gain or loss.

On the other hand, knowing yourself will help you a lot. Are you too impatient to wait for days to conclude a trade? Are you to stress out to get in and out of trade every few minutes? Do you feel more comfortable with graphics, or with calculation? Once you enter a trade, do you feel comfortable to wait as the price moves, or you like to set-and-forget?

In the meantime, discipline yourself by allocating time to trade and time to learn about trading, and time for everything else. You may not stick to it 100%, but force yourself to submit to it a bit closer everyday.

And lastly, good luck, buddy.