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Jay helping out newbies

  • #1
  • First Post: Nov 9, 2012 4:41pm Nov 9, 2012 4:41pm
On this thread, I will answer to the best of my abilities questions from newcomers and seasoned traders alike.

No, I don't always get it right. But I get it right often enough that it might help.

I've gone through the highs, the lows, the nail chewing moments and while it hasn't happened, once came very close to getting a margin call. I got the bruises and scars. I still get roughed up sometimes.

"Love your portfolio" and I'll give yours as much Tender Loving Care as I can.
Not all sins are created equal
  • #2
  • Nov 9, 2012 4:41pm Nov 9, 2012 4:41pm
What I will not do is "predictions". That actually would be my best advice to give to anyone. Don't try to predict what will happen next no more than you're trying to predict the weather next month. Predict and eventually you will see what you want to see even if it's not there. Instead, react to what's happening in the now, in the moment. There's plenty of money to be made by doing that if you're holding on to your f@#king hat.
Not all sins are created equal
  • #3
  • Nov 10, 2012 4:43pm Nov 10, 2012 4:43pm
I am sure there are many distinct ways to trade profitably, but I would be interested in your opinion on which approach has the most potential for sustained long-term returns. For instance my somewhat cursory review shows that people are often looking for price to move out of support and resistance zones and react at established trend-lines so that a well-defined risk trade can be entered. The resulting trades often can last for days if successful and I wonder if this is the way to go rather than say a short-term scalping strategy.

Thanks

RO
  • #4
  • Nov 10, 2012 5:13pm Nov 10, 2012 5:13pm
Quoting RandomOne
[color=black][font=Verdana]I am sure there are many distinct ways to trade profitably, but I would be interested in your opinion on which approach has the most potential for sustained long-term returns. For instance my somewhat cursory review shows that people are often looking for price to move out of support and resistance zones and react at established trend-lines so that a well-defined risk trade can be entered. The resulting trades often can last for days if successful and I wonder if this is the way to go rather than say a short-term scalping...

I cannot scalp to save my life. Attempting to adapt long term strategies to short frames to me, has been a failure.

I there are people out there who managed to be consistently profitable year after year purely from scalping, I have not met them.

Someone somewhere will read this and say that I'm full of it all because the past week has been profitable to them and they were scalping. To those I say let's talk in 5 years.

Daily is the frame that works best for me.
Not all sins are created equal
  • #5
  • Nov 11, 2012 12:13am Nov 11, 2012 12:13am
Quoting Jay Walker
I cannot scalp to save my life. Attempting to adapt long term strategies to short frames to me, has been a failure.

I there are people out there who managed to be consistently profitable year after year purely from scalping, I have not met them.

Someone somewhere will read this and say that I'm full of it all because the past week has been profitable to them and they were scalping. To those I say let's talk in 5 years.

Daily is the frame that works best for me.


Hello Sir,

So, from your answer lets suppose ...One Person who is scalping on 15 min timeframe and you will judge him weather he is successful or not on 5 year time basis .
So, for a daily trader like you ( 96 candles of 15 min each ) judgement of success can be determined by ....96 times ( 5 Years ) ...that will be 480 years.

I am just a noob here ....please dont take in bad way ...i am thinking it in-terms of maths here.
  • #6
  • Nov 11, 2012 1:01am Nov 11, 2012 1:01am
Hi Jay!

Im fairly new to the Forex world. Ive traded a bit on a simulated account, and as a pro trade, can you help me out with what i should do before spending my actual cash on a live account? Im in the process of finishing a book about Forex, and strategies. But is there anything else i could do? Like using indicators and all that are making me quite confused. Think of me as the noobiest a forex trader can be. Thanks in advance!
  • #7
  • Nov 11, 2012 3:01am Nov 11, 2012 3:01am
Quoting ronaleo10
Hello Sir,

So, from your answer lets suppose ...One Person who is scalping on 15 min timeframe and you will judge him weather he is successful or not on 5 year time basis .
So, for a daily trader like you ( 96 candles of 15 min each ) judgement of success can be determined by ....96 times ( 5 Years ) ...that will be 480 years.

I am just a noob here ....please dont take in bad way ...i am thinking it in-terms of maths here.
Simply put, you're over thinking it.

I was talking about scalpers. As in those trading a 1 or 5 minute frame.

For those who do that and are sucessfull, good on you. I just don't have the talent.

15 mins frame, I can do. However, I just don't have the time. There's nothing that pisses me off more than losing money while I was sitting on the John. And even if you're of the non-pooping/non-breeding breed, you will eventually get distracted.

The daily frame affords more opportunity for distractions like being a living, breathing, eating, peeing, pooping, make loving human being. It also eliminates a lot of trading noise. The recent election is a good example of noise. I would have been killed on election day using a smaller time frame but thrived instead.

So if you can trade a M1 frame and can be consistently profitable. School me or tell me off, whichever makes you feel better. I have yet to meet an institutional trader that scalps. There has got to be a reason.
Not all sins are created equal
  • #8
  • Nov 11, 2012 4:36am Nov 11, 2012 4:36am
Quoting Jay Walker
What I will not do is "predictions". That actually would be my best advice to give to anyone. Don't try to predict what will happen next no more than you're trying to predict the weather next month. Predict and eventually you will see what you want to see even if it's not there. Instead, react to what's happening in the now, in the moment. There's plenty of money to be made by doing that if you're holding on to your f@#king hat.
i dont get this. If you buy you predict price will go up, no ? Else why would you buy ?

If you buy and put stop 1 risk and target 3 risks, you predict that if market goes up, will continue to go up all the way to 3 risks, and if it goes down your idea is wrong ie will continue to go down... so why not reverse instead ?
  • #9
  • Nov 11, 2012 5:16am Nov 11, 2012 5:16am
Quoting Jay Walker
I cannot scalp to save my life. Attempting to adapt long term strategies to short frames to me, has been a failure.

I there are people out there who managed to be consistently profitable year after year purely from scalping, I have not met them.

Someone somewhere will read this and say that I'm full of it all because the past week has been profitable to them and they were scalping. To those I say let's talk in 5 years.

Daily is the frame that works best for me.
Thanks for taking the time to reply. Just a few more questions if you don't mind.

By daily do you mean looking at the daily candles and longer time-frames, or taking trades over daily periods which you can do if you are looking at hourly candles?

More importantly, what general strategies / approaches have you found successful? I don't expect you to give away any specifics, but rather the general area(s) such as support / resistance, pivots, round numbers, price action that can give an edge. Equally the areas that don't work would also be helpful. For instance, I suspect that much of the free tutorials based on indicators and simple price-action are more designed to make trading seem easy and mechanical rather than likely to provide long-term profitability.
  • #10
  • Nov 11, 2012 6:10am Nov 11, 2012 6:10am
Jay, much appreciate the offer to help newbies.

As you can see, this is my first post here. They don't come any newer than me

Quite simply, I'd like to start trading properly and am looking for advice on where to start.

I've had an account at a spreadbetting company for a year or so and have placed the odd bet on indices/stocks/oil/forex and sometimes won (luck), sometimes lost (luck).

I want to move luck out of the equation. I'm intelligent, have a finance background (there's an academic paper or two with my name on it, one involving an exponential smoothing technique that is now commonly used in industry) and am willing to learn. I understand some of the basics, like (roughly) what EW is about, the theory behind Fibonacci numbers, what terms like MACD and EA mean etc., but I need to learn much more. I want to get to a point where I can develop a strategy or two for myself, backtest them and then sit down to implement in a systematic, disciplined and diligent way.

Where do you suggest I start? (For example, I don't know how to backtest any strategies I develop)

There are millions of eBooks and courses out there - from $97 to several thousand dollars each. I'm not averse to paying a bit of money (and time/effort) to acquire skills but one needs to be careful to not go wasting either in the wrong places.

I've spent several hours browsing these forums and they seem like a great place for experienced traders to discuss items of interest/import but not necessarily, I suspect, the best place to learn what I need to learn.

And thanks for starting this thread.
  • #11
  • Nov 11, 2012 7:01am Nov 11, 2012 7:01am
I am Indian College Student.
I have blown my $100 account twice before 6months(that time i traded totally like a kid)
Now sinse half a month i am paying attention on learning as much as i can,
I finnaly want to develop a system but having trouble what kinda system shud i select?
i want to day trade or evn days to week
Less return accepted but i dont want to blow my account again,
Please help me for SYSTEM DEVELOPMENT! simple or complex? what indicators?
  • #12
  • Nov 11, 2012 10:17am Nov 11, 2012 10:17am
Quoting Jay Walker
Simply put, you're over thinking it.

I was talking about scalpers. As in those trading a 1 or 5 minute frame.

For those who do that and are sucessfull, good on you. I just don't have the talent.

15 mins frame, I can do. However, I just don't have the time. There's nothing that pisses me off more than losing money while I was sitting on the John. And even if you're of the non-pooping/non-breeding breed, you will eventually get distracted.

The daily frame affords more opportunity for distractions like being a living, breathing, eating,...

Thanks for the explanation.

I agree that in smaller time frame like 1 min , 5 min,...Spread ( Cost Of the Trading ) will be the real disadvantage and Noise ( Some invisible variable affecting price movement ...which we cant see all the time ) .
Other problem with smaller time frame is STRESS .

While On higher time frame like 4 hr , Daily etc...less monitoring and more freedom of time.

My another question to you will be about DIVERGENCE.
What your experience say about it. Is it really that useful tool in One's trading arsenal or its overrated. ?
  • #13
  • Nov 11, 2012 1:53pm Nov 11, 2012 1:53pm
Few questions.

1. Why pros are opening positions on support resistance levels and not try to wait for confirmation some type of reversal or continuation of trends.

2. If you are overtrading, how long it takes to overtake subconciuos mind controlling your emotions? 30 minnutes or more?
3. How to find what emotion you are feeling right now?
  • #14
  • Nov 11, 2012 2:01pm Nov 11, 2012 2:01pm
Quoting macroman
i dont get this. If you buy you predict price will go up, no ? Else why would you buy ?

If you buy and put stop 1 risk and target 3 risks, you predict that if market goes up, will continue to go up all the way to 3 risks, and if it goes down your idea is wrong ie will continue to go down... so why not reverse instead ?
Predicting how a pair will move and reacting to that move are two different things no?

If I buy, it's in reaction to the price having moved up already. If I sell, it's in reaction to the price having moved down already.

Granted, I do miss on some pips because it's a later entry. But it's also a safer entry.
Not all sins are created equal
  • #15
  • Nov 11, 2012 2:05pm Nov 11, 2012 2:05pm
Quoting RandomOne
Thanks for taking the time to reply. Just a few more questions if you don't mind.

By daily do you mean looking at the daily candles and longer time-frames, or taking trades over daily periods which you can do if you are looking at hourly candles?
I mean looking at the daily candles.

Quoting RandomOne
More importantly, what general strategies / approaches have you found successful? I don't expect you to give away any specifics, but rather the general area(s) such as support / resistance, pivots, round numbers, price action that can give an edge. Equally the areas that don't work would also be helpful. For instance, I suspect that much of the free tutorials based on indicators and simple price-action are more designed to make trading seem easy and mechanical rather than likely to provide long-term profitability.
http://www.forexfactory.com/showthread.php?t=190646 describes a methodology that I like using.

Slow stochastic is another one as well.
Not all sins are created equal
  • #16
  • Nov 11, 2012 2:15pm Nov 11, 2012 2:15pm
Quoting WideEyed
Jay, much appreciate the offer to help newbies.

As you can see, this is my first post here. They don't come any newer than me
Welcome to FF

Quoting WideEyed
Quite simply, I'd like to start trading properly and am looking for advice on where to start.

I've had an account at a spreadbetting company for a year or so and have placed the odd bet on indices/stocks/oil/forex and sometimes won (luck), sometimes lost (luck).
I'm not a betting man and didn't even know that was possible.

Quoting WideEyed
I want to move luck out of the equation. I'm intelligent, have a finance background (there's an academic paper or two with my name on it, one involving an exponential smoothing technique that is now commonly used in industry) and am willing to learn. I understand some of the basics, like (roughly) what EW is about, the theory behind Fibonacci numbers, what terms like MACD and EA mean etc., but I need to learn much more. I want to get to a point where I can develop a strategy or two for myself, backtest them and then sit down to implement in a systematic,...
You seem to have the brainpower to develop your own methodology, that's fantastic!

Don't rush it. Develop a system and backtest it. A quick search on FF on "how to backtest" brings lots of results. Perhaps something in there would answer your question?

Then test it on a demo account.

I wouldn't bother spending money on these ebooks. Many are from fly-by-night operators that promise the moon but can't deliver anything.

Quoting WideEyed
And thanks for starting this thread.
No worries. I hope I can help a little is all.
Not all sins are created equal
  • #17
  • Nov 11, 2012 2:24pm Nov 11, 2012 2:24pm
Quoting surajkincity
I am Indian College Student.
I have blown my $100 account twice before 6months(that time i traded totally like a kid)
Now sinse half a month i am paying attention on learning as much as i can,
I finnaly want to develop a system but having trouble what kinda system shud i select?
i want to day trade or evn days to week
Less return accepted but i dont want to blow my account again,
Please help me for SYSTEM DEVELOPMENT! simple or complex? what indicators?
Hi Suraj. Sorry about your blown account.

What type of system do you wish to develop? What trading style are you comfortable with? Do you want to scalp, do you want to be trading long term?

Also, a $100 account is not a lot of money. Are you using this only to learn? Have you considered trading a demo account instead?

What systems interest you and why is something I'd really need to know to help you better.
Not all sins are created equal
  • #18
  • Nov 11, 2012 2:31pm Nov 11, 2012 2:31pm
Quoting ronaleo10
My another question to you will be about DIVERGENCE.
What your experience say about it. Is it really that useful tool in One's trading arsenal or its overrated. ?
Not overrated at all. But it's important not to overload the chart with too much.
Not all sins are created equal
  • #19
  • Nov 11, 2012 2:41pm Nov 11, 2012 2:41pm
Quoting vaidas7777
Few questions.

1. Why pros are opening positions on support resistance levels and not try to wait for confirmation some type of reversal or continuation of trends.
Pros as in institutional traders? I don't know! Perhaps someone reading this who knows the answer can enlighten us.

Quoting vaidas7777
2. If you are overtrading, how long it takes to overtake subconciuos mind controlling your emotions? 30 minnutes or more?
There is no absolute rule on how one's mind work, conscious or subconscious. And overtrading is like overdrinking; everybody's tolerance is different. If you think you're overtrading, just stop.

Quoting vaidas7777
3. How to find what emotion you are feeling right now?
Stop, take a deep breath and ask yourself "SELF! How does that feel?"
Not all sins are created equal
  • #20
  • Nov 11, 2012 2:47pm Nov 11, 2012 2:47pm
Those of you that are interested can check out my journal at http://www.forexfactory.com/showthread.php?t=386397
Not all sins are created equal
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