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RTs:
I just penned a quick note to John Boggio about the RTs focus, which is the
reason I am starting this topic.
Can people share their advice for beginning traders. I will quote from my
earlier post:
>The things I wish I'd known at the beginning were:
>A: the "classic texts" (Murphy, Edwards & Magee etc.)
>B: capitalization
>C: risk management
>D: "don't quit your day job"
>E: psychology
>
>I was lucky enough to find an honest and supportive broker.
>
>I found it an important fact that large funds, big traders and small
traders all >use different methodologies. They can all be successful.
Discretionary intraday >swing trading, well capitalized mechnical trading,
"tape-reading" (i.e. Bill) etc. >etc.
>
>I think a set of E.O.D. charts and some good books that you study in the
evening >after work are probably the most cost effective and sensible tools
to use until >you become profitable. Trendlines, 1-2-3 bottoms and patience...
>
>The most daunting aspect of daytrading, whether using R-Mesa or Bill's
>approach, is that it's a full time endeavour. You cannot work another job.
Any >beginner who tries to go full time.. well, another futures casualty is
likely. >Believe me, I know from experience - as some RTs may remember.
>
>PG
Here too, is Essan Soobratty's post from 7/16/98. He's a full-time trader
who worked for institutions and now trades privately. He owns his cars, his
house and supports his wife and himself. It's called:
'"Learning how to trade and paying people to divulge their "knowhow"'
It amazes me how many people once they have "decided" that they want to
trade will then fork out many $$ in an attempt to learn various
techniques.
Some food for thought: Take a step back and look around you. All the
successful people in all avenues of business per se, did they pay
someone to teach them? Usually the answer is no.
As with all walks of business the only way to learn is to:
(1) do it with a make or break attitude,
(2) go work with someone or a group of people for an extended period of
time, watching, learning and doing before going out on your own.
You cannot pay $$$, spend one week looking over the shoulder of a
"master trader", read some material and then go out on your own - it
does not work that way!! Its not that easy!! Same with the homestudy
trading courses. The best case scenario is that you come away "too
confident" without the necessary experience and heartache that must be
experienced before you can trade with confidence. What makes you think
that you can let someone else endure the years or hardwork, perspiration
and sickly feeling at the bottom of their stomache.The sleepless
nights. The loss of appetite. The feeling of having failed.... pay
them a few $$ and expect to buy the end result of their hardwork and
think you can make it work for you. It doesn't work that way dude! If
you want the results you must pay the price and the cost is not just
measured in $$ terms. If you really must learn from someone else (as I
did) then go work for them for a few years. Thats the only way. I am
sorry if I have burst someone's bubble but thats the cold hard truth.
Sure there are exceptions. There are people who can take short cuts and
succeed, but they are exceptions and are far and few between.
So if you are serious about trading and are commited at making a living
out of it and are still young. Go work for a bank or other institution
that has a trading desk. Or if you have the capital, and I am not
talking about $5,000 to spare, put aside the books, magazine and
courses, formulate some ideas of your own and trade the hell out it to
see what happens.
I remember when then head of a desk I used to work for decided that he
wanted to break into the Italian swaps market in the early 90's when it
was just beginning. Do you think he rushed out to buy the latest copy
of ABC magazine or the lastest book from Joe Bloggs or maybe he surfed
the web looking for a guru to teach him the art? No. He said, lets
risk $xx, take a few positions and see what happens. We lost big time
for the first couple of months until we figured out what we were doing
wrong. Then we started making.
As long as your are disciplined and know when to admit you are wrong and
have the guts to jump right back on top of the horse then you'll do just
fine.
When I started trading for myself in addition to working full time I
remember my first trade. I studied the Euro$ in such fine detail (in
the early 90's euro's used to move a lot more than they do now!).
Looked at so many indicators. Result. Confused. They guy I sat next
to saw what I was doing as I was using the desks bloomberg terminal.
Over a couple of beers at lunch he made me realise that I didn't do that
kind of analysis when trading the banks money and I was doing okay. Why
then should trading my own cash require a different approach. That
evening I pulled up a chart of just the euro$ without any indicators and
sure enough prices were heading up bigtime. I bought a couple of
contracts. Prices went down the next day. I panicked. Sold. Prices
continued down. Went short 3 contracts. Weak ecomonic fig. Prices
started going back up again. Reversed and went long. I held that
position for many months and made some good cash.
Don't get so worked up about learning the new fad or secret approach to
markets. Relax. Prices can either go up or go down or maybe stay the
same. I bet when you play poker and you have a couple of Cohiba's in
your pocket to help digest a good meal you are relaxed. Why not as
relaxed when trading. What's the difference.
Trading is as difficult as you want it to be.
E.
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