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If you have questions or helpful comments we would love to hear from you.
Yes.
How do I know this? Outside of my own experience, I have spent time with several successful traders. When I first began I watched Linda Raschke make excellent trades repeatedly. I sat next to Mark Cook and watched him make $10,000 daily on a one million dollar account. He would then quit, no matter the time of day. I have seen Ali Moin Sharif make great scalp trades repeatedly, and I have traded with others who made money on a regular basis.
What did these good traders have in common? They were all dedicated to the point of obsession, and at the time that I was with them, none were in dire need of money.
Yes.
Diligence, perseverance and attention to detail. I will never forget trading with Mark Cook. Mark was an excellent trader, having won the U.S. trading championships, but I watched him seemingly violate his own rules . We traded in a small farm cabin in Ohio, and one day when he again seemed not to follow his own rules I asked him why?
Leaving his computer he walked me to a nearby wall and pointed to shelves lined with small green notebooks standing side by side. Grabbing and opening one, he read from notes written many years prior. “Trading”, he said, “Can’t always be defined by clearly definable rules. You can start that way, but in the end your trading will be defined by your cumulative experiences. Those experiences become ingrained by studying wins and losses, taking notes, and learning from each day you trade.
The most important characteristic of a successful trader is having a process that clearly delineates strategy and tactics, sticking to that process, and understanding that even though he may be assured of winning in the long run, no single trade is ever a sure thing.
Trading is DEFINITELY not easy money, and success takes a long, long time
Choosing the best brokerage firm is purely a matter of taste. Interactive Brokers is very inexpensive, but does not seem interested in updating and improving their trading platform. Initially, they were much, much less expensive than other major brokerages but that has changed. Review different platforms. Try them out. See which ones make you the most comfortable.
No matter which one you choose remember this. Problems will occur with any brokerage including errors in orders, errors in quotes and fills, errors in connectivity, giving you erroneous information on your end (what you own and how much). You must be prepared for this. You must:-
Keep up with your trades.
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Know your position and if you see other information, get out of your trade (by hitting “close your position”) then contact your broker.
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Always have a back up connection like a phone connection, a laptop, a quick connect phone number, etc.
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Yes.
When you set up your brokerage account you will sign agreements stating that you are responsible for almost anything that happens. Never leave your trading platform open when you are not around. Never share log in information.
To protect traders from risking, and losing, too much. European brokers are mandated to release the percent of retail investors who lose money trading. The numbers are staggering with some brokerages having almost 90% losers.
No.
New traders view trades always as “this could make me this much money.” They should view trades as “if I am wrong, I can lose this much money”. See previous question.You have to know the answer to this question. Traders think that the most they can lose is the entire value of their trading account, but this is not true. You can lose more than you have in the account if you are margined and a trade goes against you sharply before the broker can liquidate your position.
This too is a matter of preference. There are many types of charts:
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Line
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Open, high, low, close
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Candlestick
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Market Profile
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Volume
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Tick
You can trade off of any of these as long as you are familiar with that type of chart.
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No.
You can buy books on Candlestick charting and study them day after day as if there was some spiritual presence in the candle which would impart knowledge, if only you knew the pattern. But that won’t matter. No matter which charting method you use, the thing that is most important is CONTEXT. What has happened before? Where are we in relation to major levels, both recent and long term.
No.
Trading is a game of probability. You win more than you lose. Your job is to define the probabilities you wish to incorporate in your trading, while understanding that any trade can go against you. “Anything can happen” as detailed in Trading in the zone
Trend indicators, momentum indicators, volatility, volume, There are countless indicators that can be used. All of these have in common that they are derivatives of price/volume action trying to predict future price action.
The best traders I have known used moving averages and tick. Too many indicators can be confusing.
Understanding ABCD.
Markets often reverse positions by this time of day EST. If not, the market will likely continue in the direction it has been going.
Much longer than you think. But it can be done.
