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supereme

How to Be a Good Trader?

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hey guys i am interested in trading and for this i want to learn first .what would you recommend me ? what is the sequence in learning. some ppl were recommending japanese candlestick by Nison , TA by Murphy or trading in the zone. so what would you recommend to start with as i m really a noob in stocks.should i just read books or keep an eye on other factors? i decided to learn atleast one year befor entring into trading .any advice will be helpfull. thanks

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Welcome, supereme! There is no one right way of doing things but there are 2 categories know need to strengthen or be very well knowledgeable in, learn price action (via candlesticks, etc) and psychology. One cannot be successful without the other. Set up a system to develop these 2 areas (screen time, back test, psych tests and tools, journals, etc). Read as much as you can, but remember, they will confuse you so have to monitor what's influencing you in a positive or negative way. Learn to extract what you need only. Good luck with your journey!

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http://www.investopedia.com

 

Check out the beginners stuff here, and the psychology threads. DO NOT pick a style of trading yet, explore a few then pick which one works for your personality. I say that because if you pick the wrong one first you are more likely to keep looking for the holy grail (which will happen). But as Torero said, you need to study price action and pyschology. There are tons of different ways to do this, but I would suggest getting the basics of TA down then look a little deeper into the different styles and find one that best fits your personality. For me it's candlesticks, for others its VSA or Market Profile, or it could be a mixture of several things.

 

Murphy has some great TA books, and you might want to get one to store in your library (make sure you have a good sized bookshelf as it will fill :o) . But at the end of the day, experience will count more than anything.

 

Stay away from elitetraders.com

 

Go to http://www.stockcharts.com so you can view charts for free, it's a good alternative and you can learn a lot about charts there as well. In fact, it's murphys website so I definitely recommend it.

 

Honestly I would say focus a lot of your time on learning how to read charts. If you want to trade, the fundamentals are nice for a casual discussion but typically have little to do with the style of trading most of us do.

 

Mark Douglas has a great book, but it might be too much for you now. You can read it, but I doubt it will hit home for you. You need to go through the experience yourself before it really makes sense. At least that's my .02 cents.

 

Check out this article, it is a great one. Hopefully you will understand the journey ahead of you.

 

If you want to succeed then this will become an obsessive passion for you. You will learn more about yourself in the next years (if you stick with it) then you would doing anything else. It's not easy, but it's too lucrative to pass up even trying. So good luck, and if you have questions feel free to ask.

 

Hope it helps.

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The Trading Journal post to my Blog may also be of help: The Trading Journal. And while I agree that learning to read charts is essential, I do NOT recommend that any beginner get into Murphy (by the way, stockcharts does not belong to Murphy; it belongs to Chip Anderson :)). Indicators are a detour to learning how to read price action, and it can take years to find one's way back to the main road. (Also avoid Elder, Pring, Farley, and the rest of the usual suspects.)

 

I suggest beginning at the beginning, with the nature of demand and supply and of buying and selling. The Wyckoff material posted to my Blog is one place. If the trader doesn't understand demand and supply, the rest of it will be a mystery.

Edited by DbPhoenix

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If you want to succeed then this will become an obsessive passion for you.
Very true. If you aren't dreaming about this stuff at night than you aren't studying enough. :o

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I thought stockcharts was owned by Murphy? Maybe it's because he's plastered all over their site :o

 

I personally thought The Visual Investor was an easy book to read when I was new. But to each their own.

 

One guy who hasn't been mentioned and I think should, is O'Neil. While not many of us trade stocks, I think he has a lot of good stuff for beginners. That's basically how I started when I got serious a few years ago. While I don't think you should go out and sign up for Investors Business Daily, I do think his books do a good job of explaining charts in a basic form. Like Db said, you need a solid understanding of supply and demand first.

 

Everyone has their own journey and starts and ends in different places. Just make sure you stick to what works for you. Just because we recommend something doesn't mean it will work for you, thats for you to find out on your own.

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I thought The Visual Investor was a good introduction as well, until I was introduced to Wyckoff, who approaches charts the same way, without the indicators. Having gone through and past my indicator period, I'd suggest Schabacker.

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Thanks for all you advices, i just stated reading the japanes candlestick by Nison, which i found it on net although its 1991 edition but a very good book. i think it wil help me to get start in TA. once again i thank all of you guys who replied to my post .

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Dr Brett just did a great webinar I would highly recommend watching and absorbing the parts up until he starts talking about specific patterns.

http://ioamt.com/media/videos/brett/brettapril24/brettapril24.html

 

His advice is to start out by simply looking at tons of charts and learning to idenity a range. Then use the common tools(price/volume, candle sticks, whatever) to either trade breakouts from a range or to fade a reversion from the top/bottom of a range.

 

If I had to start over again I would start from the beginning of his blog and read all 1500 posts in order, googling what you don't understand along the way. Then maybe half way through read Enhancing Trader Performance.

http://traderfeed.blogspot.com/search?updated-min=2005-01-01T00%3A00%3A00-06%3A00&updated-max=2006-01-01T00%3A00%3A00-06%3A00&max-results=33

 

At some point spend 50 a month on a DTN iq feed and use Ninja Trader to paper trade SPY. Put on paper trades in 100 trade blocks of various techniques until you find one that works for you. Once you find one that seems to work put on another 500 paper trades to make sure it wasn't just luck. Keep detailed metrics/journal of each trade and figure out what went wrong or right.

 

The biggest thing though I think is if you can't envision yourself trading for your main income in 5-10 years then your just wasting your time. You will get knocked down and if you don't have those kind of goals one of the knock downs will KO you.

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I think it's best to take a top down approach.

 

1) get some charting software & a good trading simulator. E.g. Ensign & Bracket Trader plugin. Low costs. Total costs = 49.95/month.

 

2) Just study and watch the market. Write down the things you don't understand & lose money from, and research them.

 

I've seen plenty of new traders come into the office, given a 2 week "101 of what markets are", and then just study price action on the sim, before making money.

 

We buy software/books because we underestimate our own ability to figure it out.

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I think it's best to take a top down approach.

 

1) get some charting software & a good trading simulator. E.g. Ensign & Bracket Trader plugin. Low costs. Total costs = 49.95/month.

 

2) Just study and watch the market. Write down the things you don't understand & lose money from, and research them.

 

I've seen plenty of new traders come into the office, given a 2 week "101 of what markets are", and then just study price action on the sim, before making money.

 

We buy software/books because we underestimate our own ability to figure it out.

 

Best post ever on TL

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Yep, too often we look for everyone else's solution instead of creating our own. ;)

 

wow - clearly someone smart, attractive, popular, sophisticated & good with ladies thought of that sentence! :roll eyes::rofl:

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wow - clearly someone smart, attractive, popular, sophisticated & good with ladies thought of that sentence! :roll eyes::rofl:
Hey now, half of that is my own words. So...I will take smart and sophisticated. You can have popular and good with the ladies since I already have an awesome wife. I guess we can share attractive. ;)

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