Intermediate Beginner - on Right Track?

[pastthepost 10]

Am I on the right track?

 

Years ago, I spent several months reading and trying to get into trading but eventually gave up out of frustration and distraction. Nonetheless, I learnt a bit and got an idea of the general overview of trading. I'm a bit longer in the tooth now and need to think a bit more conservatively about the future.

 

Anyway, I'll give an overview of how far I managed to progress.

 

I started off learning esignal, which I'm sure is familiar to some on here. They had a feature on their software called the 'Rally Scan', which basically compiled a list of the day's biggest stock movers in the morning on the main indices with a view to riding the trend for the day ('Trend is Your Friend').

 

There was another website, which I think was run by some English speaking Chinese, which focused specifically on analysing volume data with regard to trades. Obviously, understanding volume is crucial to successful trading.

 

I eventually came across this site http://www.programtrading.com/index.html which gave advice on the Emini (ES) and the PREM (program trading) though I never really figured out how to use this information aside from the fact it's just a historical analysis of stock movements day by day depending on the time of year.

 

I have a basic understanding of the indicators but have not really practised with them.

 

I also understand the long/short positions on futures are supposed to be used as an indicator of bullish feeling on a stock.

 

I mean, if the trend is your friend, let's suppose I pick a stock in the morning that's moved up a few % at the start of the day. I look at the stock and decide either to place a stop a bit below the start of the day but then I let the position run and move the stop to a trailing stop. I look at the indicators to gauge bullishness. Eventually I let the position run for the day where I either get stopped out (at a profit) or close the position at the end of the day for a profit. Obviously, I can apply the same logic to short positions, and other instruments like the Emini or Forex.

 

This all sounds good in theory but I've not yet done it.

 

I want to develop a day trading style which is mechanical so that I know where I stand inasmuch as the market will allow it. I don't want to have positions lingering overnight.

 

I'm starting off using NinjaTrader because it's free. Obviously, I want to practice what I'm preaching before I commit any real money.

 

Anyway, maybe my head is way in the clouds and I'm trying to run before I can walk but then someone can bring me back down to earth...

[mitsubishi 24]

Intermediate Beginner - on Right Track?

 

--------------------------------------------------------------------------------

Am I on the right track?

 

Sure... If your destination is nowhere then you've already proved you're on the right track..

 

' Obviously, understanding volume is crucial to successful trading.'

 

You need to be careful when stating something is an indisputable fact that you don't overlook what actually is an indisputable fact.

 

".I have a basic understanding of the indicators but have not really practised with them"

 

I don't use volume. I don't use indicators. I'll give my reasons-

 

1- Nobody during the course of my research (several years full time) ever provided an explanation how volume could be used as any kind of edge. I, like you and many others, occasionally came across theories that sounded promising, based on reasonable logic. None of these back/forward tested as described.

 

2- It's obvious why when you think about it. If volume was an edge they wouldn't allow you to see it. and.. Dark pools aren't designed to outwit retail traders.

 

3- Nobody during the course of my research (several years full time) ever provided an explanation how indicators could be used as any kind of edge. I, like you and many others, occasionally came across theories that sounded promising, based on reasonable logic. None of these back/forward tested as described.

 

4--t's obvious why when you think about it. If indicators had any edge they wouldn't give them to you for free.

 

You're at that point... the point where you need to scrap everything. Junk the lot, wipe the slate clean. Good news is 2 things. You can spend the time more productively and you haven't lost money yet.

 

When you dump all the usual shite that losing traders waste their time with the real journey can begin.

 

Start here-

 

Ask yourself questions like - "what can I write down on paper that are indisputable facts about the market"?

 

Obviously,... "understanding volume is crucial to successful trading" won't be on that paper.

[pastthepost 10]

what can I write down on paper that are indisputable facts about the market?

 

Well, I know the markets are artificially manipulated. One example is the UK FTSE index going up post-Brexit in spite of the GBP £ going down since the Brexit.

 

I try to take the view though that the 'trend is your friend'. I mean what other measure for a stock can there be than its price, its range of movement (technical indicators), and the possible future movement (futures?).

 

I remember years ago, I was at an introductory trading course and I met a guy who was throwing money at trading. He was desperate and seemed to have lost all perspective and common sense. It occurred to me then that if he's in that frame of mind he must be doing something seriously wrong and that if I'm uncertain about what the market will do, then I'm doing something wrong. Obviously controlling risk through stops is the solution. Getting good at it obviously requires experience of the market, which I've already stated I don't have.

[zdo 20]

Dang Mits you are being too honest.

You musta not got the memo - Truth in these times is not cool. :rofl:

 

Fwiw, I would temper your volume position a little bit...

ie - one man’s volume is not another man’s volume.

It’s a big ‘voice of trading’ myth that volume is VERY objective data... particularly since most proponents and teachers cannot even acknowledge, let alone build workable frameworks for, multiple simultaneous auctions.

 

These teachers also assume their own vantage of volume (or whatever method) is ubiquitously transferable to everyone and anyone... when in reality only a tiny few students could ever benefit from / apply their perspective...

 

Each trader must align himself to the methods most compatible to his (or her) own nature....

Some methods ... like those closer to the tape... absolutely require working with volume. Other methods, as you so succinctly described, are not helped at all by inclusion of volume data.

 

fwiw, Long ago DBP used to advise traders to learn to identify precise situations (patterns ) when to use volume and to ignore it the rest of the time.

 

A 'one man’s volume is not another man’s volume' example: I get big edges in automated index trading segging out 'market order' volume data... but I got better sense now than to try to teach / sell that to anyone else...

[zdo 20]

Past,

 

(I’ll leave out the discouragement and jump directly into encouragement :rofl: )

 

... Long ago I transitioned to working with those on the 2nd cusp but I still give about 5 minutes a day to 1st cusp traders (mostly via TL). Anyways, way back when I probably worked with about a dozen traders with near equivalent vignettes - basically =

gave up,

now coming back,

using methods ___, ___, and ___...

 

Guess what? The issues initially reported never turned out to be the real issues. The small percentage who dug for the real issues were the only ones who stood a chance. The rest did same things over... got back into the same old internal oscillation patterns ... in just at a new and different time... so

 

What are your real issues?

 

Sincerely wishing you all the best.

 

zdo

[jpennybags 11]

"Am I on the right track?"...

 

In some regards, if you have to ask, then probably not. The first thing that comes to mind is in your language and the use of axioms and platitudes. This leaves the impression that you are not mature in your thinking. At this stage, no one would expect it to be any different... you are what you are at this point in time.

 

I like "Mitsu" (the prior person to address your post) are discretionary traders who don't use indicators in our trading. I won't make the argument either way as to what I do over someone else (just not my thing) and my thoughts on the matter should be taken in that context.

 

Whatever tools you choose to use need to be applied in context with market conditions, and what has just occurred. This kind of mastery over tools can only come with experience. It seems to me that you are not anywhere near that stage. The other item that comes to mind, is that there are two sides to successful trading: "method and madness". Method is actually the easy part of the equation, as any tool properly understood and applied will bring satisfactory results. Madness (your own bullshit and attitudes) is the tough nut to crack, and that solution(s) won't be found in simulation (for most people).

 

So, in short: are you on the right track? You tell me.

[mitsubishi 24]

The problem for the OP is he came on a public forum asking for advoice and the forum gave him a new vice.

 

Searching my entire posting history here will confirm that I have never once asked another member for advice. Because if you ask a bunch of losers to give you their opinion many of them will happily give it to you with the obvious dangerous implications that could result from that.

 

Not overybody here is a loser, but if you have to ask the most basic of questions you won't know who's worth listening to.Which means the long and winding road has very few short cuts.. Feel free to hate the messenger who didn't get the memo.(zdo etc excluded)

 

Simply, if you assume everyone here is a loser until proved otherwise, statistics say you'll have a higher than 80% success rate identifying them..

 

Turns out truth is not cool, it's positively obnoxious in my hands :rofl:

 

No ,the bigger issue is the generally stated intent that most trading forums preach, which is that they are a source of useful information. Of course, nothing could be closer to the Ministry of Truth.

 

If they could make chit chat the largest section and relegate TA to the bottom of the list it might actually draw more real traders and weed out the pretenders.

 

So there you go OP zdo uses vol and I doesn't- take your pick, should leave you exactly where you started from (which is usually the wrong place)

 

I'll state it again in different words. Decide for yourself what is "crucial to successful trading" rather than having it stated to you repeatedly by a bunch of strangers who almost certainly don't trade successfully.

 

Currently I'm mainly eating Jaffa cakes and vanilla ice cream- exclusively.

[Patuca 13]

For Mit...

 

1) Do you think the amount of money put into an equation has any connection to supply and demand at all?

 

2) Define supply and demand. What creates it?

 

3) Does supply and demand have anything to do with price? If so how?

 

Thanks! Good to see you back. I been have been gone a long time.

[barako 10]

the topic is a year old but from the looks of it and i would say this in relief, you are still trading, yeah lots of things can affect ones trading from manipulation on a large scale etc, which honestly it does happen, nothing is impossible anymore especially in the hands of those who can actually do it, but anyway, we move to where we are at, small scale traders, r retials traders, and try to contain the facts/situation where it is to our advantage, make the best of what info we hae and try to squeeze in a couple of pips profit along the way, and one way or another it should work just fine. we adjust, we move on

[JoelDarr 10]

the topic is a year old but from the looks of it and i would say this in relief, you are still trading, yeah lots of things can affect ones trading from manipulation on a large scale etc, which honestly it does happen, nothing is impossible anymore especially in the hands of those who can actually do it, but anyway, we move to where we are at, small scale traders, r retials traders, and try to contain the facts/situation where it is to our advantage, make the best of what info we hae and try to squeeze in a couple of pips profit along the way, and one way or another it should work just fine. we adjust, we move on

 

I'd say that he is still trading DESPITE reading this thread

[mitsubishi 24]

For Mit...

 

1) Do you think the amount of money put into an equation has any connection to supply and demand at all?

 

2) Define supply and demand. What creates it?

 

3) Does supply and demand have anything to do with price? If so how?

 

Thanks! Good to see you back. I been have been gone a long time.

 

 

Somehow I missed your post- apologies for the late reply.

 

1) I assume you use Vol to gauge which side of the market 'they' are on. I can read a market without using Vol.

 

2) Fear and Greed.

 

2) (what creates it) Suppose 'they' are short and we are in a sideways range and there is a gap up out of that range. Do you really think you have an edge about what the intent is here from reading volume? Do you think volume will tell you that this is a false break if:

 

 

The shorts are gonna cover = buy vol

Breakout traders are gonna buy= buy vol

Some traders will try shorting back into the gap= short vol

Some longs are holding

Some longs are adding= buy vol

Some are hedging

Some are rotating multi contract positions.

 

Can you read all that in the vol? Can you tell who is doing what? If so, please start a thread

 

Now it drops into the range again and breaks support and goes into a multi day down trend.

 

I can't read vol but I know a trap when I see one.

 

 

3) I'll make you a deal. Start a thread and show me how you 'predicted' the above scenario using volume and I'll show you how I 'predicted' it not using it.

[aimhi 10]

I'd say that he is still trading DESPITE reading this thread

 

Yes, or maybe he might be among those who usually fail in the start and left trading.. !