[Tams]

Originally Posted by JohnnySDG »

... If Eric clapton gave you 2 years of guitar lessons you still wouldn't be Eric Clapton.
...

.......... that's a good one !

[Bam-Bam]

Each market has its particular characteristics and nuances. As a beginner, it takes awhile to pick up on them. They have different turning points, different trading hours, different news reactions. Trying to master market understanding while mastering one’s own behavior adds a few more levels of complexity to the learning process.

Rather than trying to trade several markets concurrently, spend a few weeks paper trading each market. Spend a couple of weeks trading indexes, a couple of weeks trading metals, a couple of weeks trading interest rates, etc. When you find one that seems to gel with your personality and strategies, stay there for a month or so. Instead of following the worn out path of learning with indexes, you may have a better experience with a different market.

That’s one thing I wish I had done as a beginner futures trader. I spent a year and a half losing money in indexes but didn’t move to anything else because I thought I needed to master “simple” index trading first. Then one day I heard somebody say, “If you’re struggling trading indexes, maybe they’re not your thing. Try trading something that trends better.” So I moved to Euro Futures, and it was like flipping a light switch. The setups were prettier, results better, and my anxiety level went way down. I still get drawn back to indexes every now and then because of the incredible liquidity, but ten out ten massive account draw downs is the usual result. I'm still learning my lesson the hard way.

With regard to starting trading with Crude futures, I can think of very few trading experiences that would be as painful as learning to trade with Crude. The volatility is nice and the trade setups are clean, but unless you are truly on top of your game, you risk getting your head torn off. A good example is this morning’s price action. Within an hour, Crude rallied from 76.00+/- to 78.00+/- from 8:45am to 9:50am Eastern. That’s a $2,000 move per contract. There are so many other facets of trading that a beginner trader struggles with that you would be poorly serving yourself to start this way.

Trying to learn by trading the DAX might be a comparable experience.


May all your fills be full and your exits timely,

Bam
Bam
Bam-Bam

[MadMarketScientist]

The key advice below is to not try and scalp as a beginner. Cannot agree more. It is a great way to get your brokers mortgage paid but not yours. Between slippage, mistakes, commission and fatigue it rarely works out for the beginner.

And if you want to know more why you will never be Eric Clapton the book Outliers from Malcolm Gladwell is a great one and explains it.

Originally Posted by JohnnySDG »

Metatron, scalping is a receipe for disaster.

Slippage and commissions will melt your capital like a snowball in Miami.

Newbies have to remember 1 thing - Not only do >95% of all people lose money trading....but that 95% includes the people that claim to make money.

I said this in another thread and I'll repeat it here. This "full time trader" idea is a fantasy. Its like playing pro sports, some will but most wont.

Figure out a way to make a return on your capital.

I'm willing to help out those who ask me. I don't sell anything and I ask for nothing in return. I've been trading over 20 years and find the "I don't give out my secrets" line to be a pile of crap. Trading is mostly about money management more than some "secrets of the pros".
Fact is most people would lose money even if the best traders in world sat next to them and taught them for six months. If Eric clapton gave you 2 years of guitar lessons you still wouldn't be Eric Clapton.

Now, with all that said, It is possible to make a good return on your capital. If you still think you can become rich trading full time then good luck. But, if you want to learn some trading reality I'm happy to help.

[JohnnySDG]

The last two posts offer great advice.

I'm an options trader. I just can't trade futures. Options I can trade in my sleep, its just second nature.

Study the different markets and see what you like best and fits your style.

To use another Eric Clapton example - Eric's not playing the drums!

[MadMarketScientist]

JohnnySDG

I do agree. In a former life when I was doing some training everyone would come into the training with a preconceived notion that they should be an S&P e--mini trader, or they were an options spread trader, or they only traded stocks. Usually maybe what they read or saw out there and felt they should be that to.

Virtually without exception I'd tell them that in 90 days you'll be trading something completely different than you are now, and it won't even be something you are even thinking as a possibility today.

For the exact reason that there is a real "fit" issue. I might personally love trading a certain market like Crude or the Dax, and the next guy might totally hate the pace, and the hours and the style and wouldn't even consider it.

So many criteria but a good start is to decide what your risk capital is. That will exclude/include a number of markets right away. Determine what hours of the day or night you can trade. This will rule out many markets, and rule some in. Decide if you want to have to "watch" your trades or set and forget. Decide if you are going to day or swing trade. And of course once you know your time of day you have, how much time you can give it. Finally, decide on a circuit breaker that if you equity gets down to a certain level you'll stop and reassess. If you go through just these few questions you will end up with a very small list of markets to trade -- but it will be highly personal to you.

[JohnnySDG]

Well said MadMarketScientist!

It is what fits you best. You can't make it fit.

I would also like to add that some people are just never going to be able to do it. That is just the facts.


Johnny

[electroniclocal]

Sorry guys, I completely disagree with most of what is said above apart from "trade one market on one chart". I am delivering a training course at the moment to convert a group of 25 previously unprofitable traders into consistently profitable ones. Its not just what is taught but how it is taught.

Comparing trading to Eric Clapton's talent of guitar playing (which he was born with) to teaching someone to ideantify order flow and react to it, is a ridiculous comparison. It may sound like a nice sound bite but is so far from reality and doesn't make sense.

Trading can and is capable of being taught. Just because you haven't been taught or you can't teach it doesn't mean it can't be done. 10% who have learned to trade and they certainly aren't all geniuses. It can be done with a group of traders at a time.

EL

[SIUYA]

Trading like anything can be taught, its just that some people will be ok at it which usually means break even after commissions, some will make a reasonable living, and a very small few will really succeed.
As has been mentioned that you need to fit your personality and style, I am sure that not every market or style suits someone, and hence there will always be some wrong turns in the journey.
There are always too many preconceived notions that first need to be eliminated as has been pointed out. There are plenty of trained lawyers out there who are not practicing law and I reckon a few of them found out that its largely a pencil pushing job rather than the high flying court room dramas they initially believe.
(Electronic local - I have loosely followed your blog, and one great point you make is about consistent profitability for day trading....lots of people miss this in many teachings. I also think that stops should not really be called "stop losses" but 'stop account crippling drawdowns" or "stop blowups".)

I always wondered about the 95% statistic....where does it come from?
At a guess I think that if its based on closed accounts, then there must be a lot of traders in there who either;
1, are undercapitalised, and hence close an account
2, get bored, loose interest, become too frustrated to continue
3, close a few accounts, and yet ultimately become profitable with one account
4, dont like their broker and hence close an account.
5, change their trading styles over time and either it does not work or they disappear through boredom.