Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

TheNegotiator

Advice for Beginners....don't Try to Make Money.

Recommended Posts

:haha: I hear you say. But really. I think that this is perhaps the single biggest factor in the high failure rate of new traders. Perhaps it would be better put that you should not expect to make money.

 

Let me put it in a different way. A beginner will come into trading and have had very little experience of anything similar. The market will however look familiar somehow and tease them into thinking small successes are down to skill. After all, humans like certainty and are quite happy to congratulate themselves when they think they are good at something.

 

Would you expect to pick up a guitar and then a month or two later be playing at a rock concert? Would you expect to pick up a paintbrush and shortly after have an exhibition on display at the Louvre? Probably not. The difference is though that poor trading costs you your money. Coming into trading, you will be pitted against seasoned professionals, massive hedge funds, banks and computer systems to name but a few.

 

Losses early on affect more than just your bank balance. They affect your emotions and your ability to learn and develop confidence in your understanding of markets and methods you use to trade. If you don't understand how to 'take a loss' this can be catastrophic.

 

Do yourself a favour, when you start trading, trade to trade well, not to make money!

Share this post


Link to post
Share on other sites
Would you expect to pick up a guitar and then a month or two later be playing at a rock concert? Would you expect to pick up a paintbrush and shortly after have an exhibition on display at the Louvre? Probably not.

 

Those are good analogies. The underlying comparisons have to do with:

 

  • Level of proficiency
  • Time spent practicing
  • Time spent studying
  • Professionalism
  • Performing to a degree of excellence

 

If you are a "C" grade student of trading, I doubt you will make money. To make money trading, you need to get an "A" for a grade on the test. A 75 score out of a possible 100 won't get you anywhere. If you are not on the "honor role", you won't make any money. In school, you can take a few notes, rely on short term memory, and hope the True/False answers come out in your favor, and get a passing grade. In trading it's a different story. You not only need an "A" on the test, you need to be able to apply it to the real world of trading.

Share this post


Link to post
Share on other sites

Don't try to make money? Are you out of your mind??? Of course you should go after profits right from the start. Just remember to look for trades that have a decent probability for a high reward to risk ratio (such as 5 or 6 side-by-side bars on a 120 minute chart in just about anything breaking out into a steady move on a 15 minute chart: trade any 15 minute bar that shows price rejection, such as a rattail candlestick; risk half the rattail range and lock in profits as the move breaks from your entry zone...)

How dare you advise people to settle for mediocrity when one needs to build successes in this business to stand a modicum of a chance at success???

 

Luv,

Phantom

Share this post


Link to post
Share on other sites
Don't try to make money? Are you out of your mind??? Of course you should go after profits right from the start.

I once read that if you trade to trade well, money naturally follows. I think this is good advice because it takes the trader's focus away from the money aspects and more towards trading itself. This fact alone typically means better control of emotions for the trader.

 

It's especially good advice for new traders because it can help dampen those "get rich quick" urges.

Share this post


Link to post
Share on other sites
Don't try to make money? Are you out of your mind??? Of course you should go after profits right from the start. Just remember to look for trades that have a decent probability for a high reward to risk ratio (such as 5 or 6 side-by-side bars on a 120 minute chart in just about anything breaking out into a steady move on a 15 minute chart: trade any 15 minute bar that shows price rejection, such as a rattail candlestick; risk half the rattail range and lock in profits as the move breaks from your entry zone...)

How dare you advise people to settle for mediocrity when one needs to build successes in this business to stand a modicum of a chance at success???

 

Luv,

Phantom

 

I think you missed the point. In your example you cited a few examples of a particular high probability setup. But how would a beginner know and identify that- even after reading your advice?

 

What the originator of the thread is suggesting is that emotional capital is as important as financial capital. If one has "beginners' luck" he really does not know why he made money. When that beginner starts to lose he does not know either, but ends up being in a situation where he becomes afraid to trade, and even with increased skill cheats himself because of the fear.

 

What I think the originator is suggesting is that the beginner build a set of skills, a system and practice before putting much capital at risk. You wouldn't see a baseball player (even a Little Leaguer) go to bat in a real game without batting practice would you? Well... There are no Minor Leagues of trading.

Share this post


Link to post
Share on other sites

How dare me? Well you definitely missed the point I'm afraid. As Stanton said, how does a beginner know what a high probability setup is? Otherwise why is there such a high failure rate and so many blown up accounts? Everyone who tries to trade should be a millionaire right? Maybe even a billionaire. J/k. But the likelihood is they will think they know how to trade. Trading is a highly competitive game and it's unlikely that you'll make money as a beginner by being more skillful and faster than seasoned pros. You probably were just lucky. But you won't know it. Losing the money by trading in a way you think is correct, will piss you off. You'll probably start pushing harder to make it back. Maybe start averaging in on losing trades. Before you know it you'll have an empty account and a damaged ego.

Share this post


Link to post
Share on other sites

I missed no point. I understand all of the ins and outs of the beginner's plight. But its been my personal experience after working one on one with many individuals over the years that the number one reason people wash out in this business is a lack of patience waiting for high probability breakouts to occur. Trade selection and risk management are the ONLY two factors a trader has control over.

 

I see beginners time and time again try to chase a moving market and take unnecessary losses because they get trapped in the volatility.

 

I realize that newbies don't know enough to know why they are correct or incorrect in their trading but there are myriad books available on trade setups, And way back when, I was able to make ten thousand dollars on a single trade I got from the Street Smarts book just by cookbooking it when I had no idea how to trade correctly.

 

My point is this: this business is about positive expectancy and execution. If you bypass the "action junkie" mentality and use a modicum of emotional control while waiting for good setups like the one I gave you above, you stand a much greater chance of not only surviving the game, but actually making money while gaining the experience necessary to trade well week in and week out.

Share this post


Link to post
Share on other sites
Trade selection and risk management are the ONLY two factors a trader has control over.

 

Good point. I could see how people who try to "make things happen", and willfully try to make things go their way, could have a lot of trouble trading.

Share this post


Link to post
Share on other sites

The trouble is people don't work purposefully towards their goals. They do not consider the process. The way you tell whether a setup is a 'high probability' setup is you test it backwards and then forwards. The process allows you to build confidence in the outcome. A principle reason people experience emotional difficulties is they have not adequately done this. Trading is similar to most endeavours in many ways (more so than it's different).

 

There are lot's of 'truisms' (though how true they are is debatable, many are just BS rhetoric) 'don't fight the trend', 'look after the losses and the wins will take care of themselves" etc. (I always liked Ken Wolfs, Jimmy Youngs are good too) The thing is these 'sound bites' are of actually pretty much zero practical use to beginners. Of course posts like this you can bash out in two minutes.

 

DBPhoenix talked about the process in numerous posts on the forum here (Whyckoff section mainly) there is a hint in his blog here The Trading Journal - Traders Laboratory Forums You have to go back in time a fair bit but there are some great threads here that give good actionable advice to fledgling traders. Looking forward to seeing if phantoms develops into such a resource.

 

My tip for the day..."don't eat yellow snow" :D

Edited by BlowFish
typos <sigh>

Share this post


Link to post
Share on other sites

Jesse Livermore once said "It's easier to make a million dollars when you know how to trade than it is to make a hundred dollars when you don't."

 

So here's my question:

 

How do ya know you're "trading well" if you're not making any money?

 

Just curious...

 

 

Luv,

Phantom

Share this post


Link to post
Share on other sites
:haha: I hear you say. But really. I think that this is perhaps the single biggest factor in the high failure rate of new traders. Perhaps it would be better put that you should not expect to make money.

 

I think another mistake is...

 

beginners try to be a trader.

 

 

no, no, no.... don't try to be a trader.

 

I am not a trader.

 

I do not trade in the traditional sense... buy spice from india and ship it to egypt, trade it for camels and ship them to china, trade the camels for tea cups and ship them to france... and so on.

 

I am not a trader.

 

I am a parasite.

 

I benefit at the expense of the others.

 

Unlike a predator, I am small. Nobody can see me, or care about my existence.

 

Unlike a predator, I do not control my prey, I tag along for the ride.

 

I am a parasite. I suck blood.

Share this post


Link to post
Share on other sites

I am not a trader.

 

I do not trade in the traditional sense... buy spice from india and ship it to egypt, trade it for camels and ship them to china, trade the camels for tea cups and ship them to france... and so on.

 

I am not a trader.

 

I am a parasite.

 

I benefit at the expense of the others.

 

Unlike a predator, I am small. Nobody can see me, or care about my existence.

 

Unlike a predator, I do not control my prey, I tag along for the ride.

 

I am a parasite. I suck blood.

 

You're funny. A parasite with humor. :rofl:

Share this post


Link to post
Share on other sites
How do ya know you're "trading well" if you're not making any money?

 

Just curious...

 

 

Luv,

Phantom

 

Good point! :rofl: I guess if someone was following their strategy with absolute perfect discipline, and was loosing money, they could say they were trading well, but their strategy is garbage.

Share this post


Link to post
Share on other sites

Forex is too complicated! Autotrading is more easy but even for this forex knowledge is needed. I use Zulutrade for receiving entry signals and seems to be the easiest thing BUT...

if I had set wrong settings for my signal providers or did not know anything from risk management?

My equity would be only 1$.

Always remember to review your trades to realize what went wrong and avoid it in the future.

Share this post


Link to post
Share on other sites

Traders lose because they are willing to trade systems based on blind faith instead of rigorously testing the system. In particular, the system must be tested on a large data set it has never seen before during it's development. If it passes that test the system should be tested live on simulator. If it still looks good it should be traded with real money with very small positions. If it still looks good it should be traded live with positions sized to the traders comfort level anticipating drawdown levels approached in the testing phase.

Share this post


Link to post
Share on other sites

Of course we are all in the game to make money. However, I think too many new traders place too many trades. Patience is something that must be learned. Follow the trend - don't fight it- or you will always lose. I have waited months to get in on a great stock on a dip, and have always made money in doing so. Read as much as possible and follow your gut. And when I followed the advice of friends, relatives and brokers, I've had to wait a very long time to cash in on any profits. It's your hard earned money...so gain all the knowledge you can before investing.

Share this post


Link to post
Share on other sites
If you're a beginner, one good advice that I have learn over the years is to only invest on something that you can afford to lose. vbulletin-smile.gif

 

Yes, i also think so. we should invest on something that we can afford to lose. Here no guaranty...

Share this post


Link to post
Share on other sites
Yes, i also think so. we should invest on something that we can afford to lose. Here no guaranty...

how bout invest with learning, it;s highly guaranteed of earning. there's no such affraid to lose while we stay focus on learning process.

Share this post


Link to post
Share on other sites

I am trading from last 2 years. I am not too senior here. But i would like to share with you friends about my trading system. When i start use some indicator but unfortunately i don`t get big benefits from that. then i come to know about Price Action System and join The Forex Guy - Learn Forex Price Action Trading Strategies learn from there and at this time make profit. though it`s not much but day by day it`s increase. If any traders want to learn about trading with price action and good money management then have a look at PRICE ACTION TRADING WITH THE FOREX GUY

Share this post


Link to post
Share on other sites
10 – Fast Deposits/Withdrawals

With us account funding and withdrawals are a flawless experience: we offer our clients more than 14 ways to deposit instantly and withdraw funds to their trading accounts. With zero fees, and without hidden commissions.

 

I hope that one will be as true as advertised. vbulletin-smile.gif

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 29th March 2024. GBPUSD Analysis: The Pound Trades Higher But For How Long? The global Stocks Markets are closed due to Easter Friday (Good Friday). The NASDAQ continued to follow the sideways trend while other indices again rose. The SNP500 reaches an all-time high, but the NASDAQ remains under pressure from Tesla, Meta and Apple. The Euro continues to trade lower against all major currencies including the US Dollar, Euro and Japanese Yen. The British Pound is the best performing currency during this morning’s Asian session. However, investors are largely fixing their attention on this afternoon’s Core PCE Price Index. GBPUSD – The Pound Trades Higher but For How Long? The GBPUSD is slightly higher than the day’s open and is primary due to the Pound’s strong performance. At the moment, the British Pound is increasing in value against all major currencies. However, the US Dollar Index is also trading 0.10% higher and for this reason there is a slight conflict here. If investors wish to avoid this conflict, the EURUSD is a better option. This is because, the Euro depreciating against the whole currency market avoiding the “tug-of-war” scenario. The GBPUSD is trading slightly lower than the 2-month’s average price and is trading at 49.10 on the RSI. For this reason, the price of the exchange is at a “neutral” level and is signalling neither a buy nor a sell. The day’s price action and future signals are possibly likely to be triggered by this afternoon’s Core PCE Price Index. Analysts expect the Core PCE Price Index to read 0.3% which is slightly lower than the previous month but will result in the annual figure remaining at 2.85%. The PCE rate is different to the inflation rate and the Fed aims for a rate between 1.5% to 2.00%. Therefore, even if the annual rate remains at 2.85%, as analysts expect, it would be too high for the Fed. If the rate increases, even if only slightly, the US Dollar can again renew bullish momentum and the stock market can come under pressure. This includes the SNP500. Investors are focused on the publication of data on the UK’s gross domestic product (GDP) for the last quarter of 2023: the quarterly figures decreased by 0.3%, and 0.2% over the past 12-months. This confirms the state of a shallow recession and the need for stimulation. The data, combined with a cooling labor market and a steady decline in inflation, increase the likelihood that the Bank of England will soon begin interest rate cuts. In the latest meeting the Bank of England representatives did not see any members vote for a hike. USA500 – The SNP500 Rises to New Highs, But Cannot Hold Onto Gains! The price of the SNP500 rises to an all-time high, before correcting 0.33% and ending the day slightly lower than the open price. Nonetheless, the index performs better than the NASDAQ which came under pressure from Tesla, Meta and Apple which hold a higher weight compared to the SNP500. For the SNP500, these 3 stocks hold a weight of 9.25%, whereas the 3 stocks make up 14.63% of the NASDAQ. The SNP500 is also supported by ExxonMobil’s gains due to higher energy prices. The market will remain closed on Friday due to Easter. However, the market will reopen on Monday for the US and investors can expect high volatility. Investors will also need to take into consideration how the PCE Price Index and the changed value of the US Dollar is likely to affect the stock market next week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • MT4 is good and will be good until their parent company keep updating the software, later mt4 users will have to switch to mt5.
    • $SOUN SoundHound AI stock at 5.91 support area , see https://stockconsultant.com/?SOUN
    • $ELEV Elevation Oncology stock bull flag breakout watch , see https://stockconsultant.com/?ELEV
    • $AVDX AvidXchange stock narrow range breakout watch above 13.32 , see https://stockconsultant.com/?AVDX
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.