Support and Resistance Trading Forum

Re: Mature newbie
By:Erich
Date: 11/26/2009, 1:36 am
In Response To: Mature newbie (Marco)

Hi Marco, you're asking some very good questions.

1. Trading for free - this is a good idea, but you have to be honest and try to simulate your account size and emotion when you're papertrading. The account size is the easy part, but getting the emotions right with play money is difficult. You might consider trading a real money account in a very "tame" market to get a handle on the adrenaline rush when you do it for real (ie. 5 year note, Canola, mini-Corn), but I'll leave that up to you.

To answer your question, most brokers will give you a papertrading account for free if they think you're serious about opening an account with them. Richard Dank at Proactive Futures (http://www.proactivefutures.com) is very good like this (feel free to mention my name). Other brokers will make you deposit some money with them before they give you a demo account - which is fair because they have to pay for your pretend data feed - so they like to know there is a commission light at the end of the tunnel for them.

2. Way to trade properly - YES! You have to make money!

I know my response sounds flippant, but it's not. Trading can be as simple or as complicated as you choose to make it. Personally I lean towards easy, but that's me. You might be more comfy with a bunch of indicators and monitors. If that's what it takes for you to turn a profit, then so be it. There is no one answer that is right for everyone. You have to find what is right for you.

On that note I have a couple of suggestions for you. I came by these the hard way, after many years of trading, so I hope you're paying attention. The easiest way for you to get started trading is to pick a signal (or two) and stick with it. Avoid the temptation to add too many things to your trading when you're starting out. I don't care if you choose a morning/evening star, inside bars, outside bars, hammers/gravestones... it doesn't really matter, just pick one or two and then wait for those signals to come up and trade them EVERY SINGLE TIME.

This sounds easier than it is. Trading this way will severely try your patience and discipline, two things almost all losing traders lack, which is probably a major contributor to why they are losing traders. I will warn you - it is boring waiting for just one or two signals to form, but in my experience, most people can not watch a chart successfully looking for 8 or 10 signals. Following just one or two signals will really help you learn how your chosen signal works. After a while you might even develop an intuition about which signals are a better than others. You may not be able to explain it, but something leading up to your signal will look familiar and you'll begin to recognize the quality of your signal. It's tough to explain, but you'll know it when it happens.

By the way, all the signals I mentioned to you are quality signals. If you're lost for a signal to follow, pick any combination of those. The other thing you'll need is a way to define trend. You can use a moving average line, a trendline or just higher higher/higher lows (uptrend); lower highs/lower lows (downtrend).

The last thing you'll need is a quick lesson in profit. Remember how I said at the beginning the way to trade properly is to make money? The easiest, most reliable way to make money is to take quick profit. Yes, I know this might seem counter-intuitive, but it's not. It's another one of those lessons I came across the hard way. Taking small profit, when you have it, is the best way to make money trading. Consistency is everything. Once you have consistency you can add multiple contracts to add a lot of punch to your trading.

3. Must have site/book? - I like reading trading stuff as much as the next trader; however too much trading stuff with lead you to confusion (this is only true in the early part of your trading career, once you start making money you'll read the other stuff more for fun than to learn any "secrets" of which there are none).

There are only two sites that I personally know of which give you the straight goods on how to trade: modesty aside, my site (http://www.supportandresistance.com) and Rob's (http://www.oncoursetrading.com)

---

I hope that helps your quest. I'm glad to hear you have an alternate source of income while you learn to trade. My personal favourite alternate source has always been a working spouse. ;-)

By the way, were you looking to day trade or position trade?

Erich

Responses To This Message

Re: Mature newbie
Marco -- 11/27/2009, 2:43 pm
ONLINE COMMODITIES TRADING