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TheNegotiator

How Did You Find Your Style And/or Market?

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So when we first start to trade we are told to find a market and a method which "suit" our personalities. First off, how do you do this with no prior experience of trading or guidance from someone who does? But if you have a sound methodology does it really matter anyway? Does the personality aspect of finding a method and market have more to do with the current market phase of an individual product rather than the product itself? Are you a great trend trader or do you prefer bracketing markets?

 

My question is therefore, have you found your method/product? If you have, how did it happen? Through careful planning and understanding of your particular needs or by sheer chance? If you haven't, what are the dead ends you have been down searching for an answer?

 

Or, do you disagree with the sentiment entirely and believe that you should be able to use any method in any market if you are good enough?

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I personally had some guidance in that I began trading at a prop firm. I was lucky enough to have found some success in the products I traded although they never felt quite right. I knew that I was always going to want to understand what was going on technically and why the market was trading in the way it did. I was able to experiment with small size in various different products until I found one which I felt more comfortable with. That happened to be the ES. Many traders I realise, get sucked into trading a big and liquid market with low margins and high hopes. That was not where I came from. I just got it(well not always!!). I'm not sure how I personally would have chosen a market if I'd started as a retail trader.

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Hi Negotiator. I started with ES, learning on my own, then a prop firm, that prop. firm never added anything to my knowledge. BUt anyways.

 

CUrrently I am looking at YM to see if i can get better tick value.

 

PS: which method do you use and which prop firm did you go to. If it can be commented

 

Thanks

 

Dan

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I started with equities and found that I was not very good at it...by chance I was introduced to Dr. Ari Kiev. He suggested some simple things that have worked well for me...First he suggested that I build on what I know best (I am an Engineer by training)...So I started to look at Energy, and Oil Services...He also suggested that I specialize or concentrate my efforts in one area. In his opinion if you become an expert at some element of business or technology, you may find that people will pay for your expertise, or that you can parlay that expertise into a better job or make money by learning to apply that expertise to trading. I stayed with Energy and Oil Services for almost 10 years before branching out to other things.

 

As for my approach, again I had no real idea of what to do...like most I tried all the obvious avenues and to no avail...again Dr. Kiev suggested "you know some of the best traders I know use Market and Volume Profile".... He introduced me to a couple of gentlemen at a brokerage firm called Gelderman and for the first time I saw people using Market Profile and Volume Profile consistently. After that I began investigating the idea of identifying areas of Supply and Demand on standard candlestick charts. About a year later it occurred to me that if I were to combine the two approaches the result might be a more accurate initial entry for my trades. I have been using the concept of "confluence" successfully for quite a while now...the idea being that if you have multiple signals occuring at or near the same price, you have a bigger audience of traders willing to take action at that price.

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I wanted to manage my own retirement account. I signed up for the Motley Fool newsletters and got onto their website. I learned that there were retail brokers and trading platforms that I never even knew existed. I transferred my retirement account from one broker to another, looking for a better trading platform. I started reading about candlestick patterns, and all the other stuff that is easily found on the internet. I searched the internet for what seems like hundreds of hours, trying to find out information about trading. All of seemed like garbage. I probably spent at least a year of full time work just finding out very basic information about trading.

 

I spent months learning how to operate a trading platform, and going through indicator after indicator. Nothing seemed to really give me what I wanted. It all seemed like a very confused and convoluted mess that had no real basis in telling me why the market does what it does.

 

I had spent a lot of time trying to figure out how I could gain an advantage trading stocks. I looked into news services, and tried reading earnings reports. I even broke down all the parts of an earnings report into it's accounting categories, and wrote a program that would calculate what the relative impact of all the different variables would be. But monitoring many different stocks, reading earnings reports, monitoring news and trying to make sense of why the market was doing what it was doing seemed like a game that just could not be won. (At least for short term trading, which is what I wanted to do)

 

I figured out that trading penny stocks was a highly leveraged way to make a lot of money very fast. I bought a penny stock, made some money very quickly, and what seemed like very easily, and thought it was going to be easy. I decided that I could trade for a living, having absolutely no idea what it really took to make money trading. I didn't know the failure rate, or anything about the market. I wouldn't learn that until well after I was deep into wanting to trade for a living.

 

After going down quite a few paths, I decided that I couldn't really trust anyone else to give me a trading edge and that I'd have to figure it out myself. I had a little bit of programing experience, so thought I'd customize some studies. I joined a programing group, and was disappointed with the group and the lack of good answers. I found an answer myself, and posted it. As I learned things I posted what I had learned. I started answering questions if I knew the answer. As it turned out, I became one of the biggest contributors to that programing group. Through that group I met a couple of people. They gave me some very basic information about trading, and told me about the futures market.

 

I felt like there had to be something that other people knew that I just didn't know. I thought, "Somebody is making money, so there must be a way to know what the market was going to do." I tried looking at correlations between what volume was doing, and what price was doing. I programed studies and looked for trends and patterns. Nothing seemed to give me an "edge". There were patterns that worked, but they only seemed to work 50% of the time. Nothing seemed to give me more than a flip of the coin would give me.

 

Every once in a while, I'd watch a free webinar or seminar, trying to pick up something, anything that would give me some valuable information. Then I somehow found out about market internals. I noticed that the SP emini seemed to follow the NYSE Advancers minus the NYSE Decliners very closely. So I started analyzing that data every way I could.

 

Right now I use the NYSE TICK, NYSE Advancers, and the NYSE Decliners as the basis for my trading strategy. I've spent a lot of time documenting all my observations. I have word documents and even a database of all my observations. Today I spent time saving screen shots of different trading "set-ups" that I need to print out, and put into my trading notebook. Then I'll go through them, study them and memorize all the trade set-ups.

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