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Bizarre.
Two threads with same heading....
Two threads with same heading....
Currently learning on my own
- Thread starter luketurner13
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Following up on your additional info you mentioned swing trading (a trading style) and options (a financial instrument). You can swing trade using options but you've got a lot of education and work to do before you're going to be ready. This work isn't done by 90% of wannabe traders and that's why they're not profitable in the long term. This implies that the odds are, you won't do enough work either.
Let me try to elaborate on why I think it's a lot of work. Swing trading requires one to have a good understanding of how the market moves most of the time. You have to learn to work with probabilities. This is a difficult concept for many traders to fully accept. I group my swing trading strategies into break-outs, pull-backs and reversals. I learned to master break-outs first because the market was bullish at the time. Once the market turned bearish the BOs dried up (as we'd expect) and I learned how to master reversals. Pull-backs are the trickiest to master because a simple PB can turn into a complex PB. The failure of the simple PB means we lose and probably won't see the excellent opportunity that the complex PB provides because we're still spewing about the first loss. Options work very well when trading PBs because options can give the trade a little more time to work out so we may still be in the trade as the simple PB morphs into a complex PB.
What I'm trying to point out is that in order to swing trade well, you have to have a solid belief in a price structure of some kind. This is so you can identify the trade opportunities with the highest probability. Classic market structure theories have been postulated by RN Elliott (wave theory), Gann, Fibonacci swings, R Wyckoff, Edwards&Magee. There are lots of others. Without a belief on a structure you'll just be guessing.
It's going to take a lot of time developing some beliefs on price structure. Options are an extremely versatile financial instrument. In order to get the best from using options you need to select the right strategy for the current market conditions. You need to be able to read the current market conditions and plan for what they maybe in the future (before option expiry). Options provide many ways to do the same thing but there will be huge differences in the capital required to apply the strategy. There's a huge learning curve here also.
You want to use both swing trading and options. That's two hills to get over before you tackle the mountain.
over9k
So I didn't tell my wife, but I...
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This is not an oversimplification. Buy everything, and hold it forever. Do you know what ETF's are? There are ETF's that allow you to buy into the entire market in one trade. You buy them, and you just keep buying them.
DrBourse
If you don't Ask, you don't Get.
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This post is for the “Wanna-be” Newbie Share Traders…..
The following may seem harsh to you, but I'm trying to stop you losing money….
Basically there is a lot to learn about this industry, but IMO you HAVE started off with the correct approach, by asking questions….
Here are a few suggestions for you to contemplate…
These are in no particular order…..
I’m just going to drop suggestions one after the other as they come to me…
What Tier Data Provider do you use, Tier 1, 2, 3 or 4 - depending on your trading time frames, some of us could have bought and sold the share you want to buy, 2 or 3 times before you get your data, so be careful what Share Trading Platform you use….
You need to know what certain “external events” have on stocks, particularly when they happen outside Trading Hours – for example how do stocks react to Interest Rate Changes, or to Commodity Price changes – for example a Mining Stock may rise or fall when Iron Ore or Gold prices change, but Health Funds may not react….
How will you identify a Positive History – Companies only issue Financials periodically through the year – any Financial or Rumour effects on a Companies Financials are interpreted differently by various analysts – which one will you believe – or are you able to dissect a Balance Sheet.
A Stocks History over 12 mths is irrelevant… A Stocks History is normally 5 to 10 years….Which of the approx 50 Ratios and/or 30 Margins of Safety would you be looking at to help evaluate a Positive History??..Which of these Buffett style calculations would you be using to help your evaluation of a stock:- DDM, DDMF, GIVF, PRESVAL, RIV, ERI, NCAV, PAYBACK, PEG, PEGY, STRET, STRETD, TARG, TARGD, EGROWTH, ESAFETY, PESAFETY, (there are several others)….
Do you know what the overnight “ASX SPI” is, and how it will effect todays Share Prices….
Do you understand how Stocks react to certain Political Decisions....
Do you know what time the Economic Clock is ATM....
Do you understand the S&P Credit Rating System for Companies (AAA, BBB, etc), and what those ratings mean to a Company….
Do you know what ‘Minor Irritants’ such as Algorithmic Traders, Swing Traders and Option Traders do and how they effect a companies share price…
Do you know IF your chosen Stock CAN be Shorted…
Do you understand how Short Selling effects your chosen Stock….
Do you calculate your own “Intrinsic Values” – if not why not??..
Do you know what Australian ADR Stocks are - do you know how they effect their Australian equivalent....
Do you check Overseas Exchanges to see how Australian Dual Listed Stocks performed yesterday, their + or – for the day is usually reflected here in Aust…
Check out the NCM Stocks on the Dow Jones – Start by searching for NCMGF and NCMGY…
Don’t Trade too many stocks at the same time, it is not easy, while you are winning and watching your profits grow on say 2 or 3 of them, the others can quickly reverse and obliterate any profit you thought you may have had….
Why not trade 2 or 3, have all 3 charts and all 3 Market Depths on multiple screens at the same time, and watch them “like a hawk”….
Don't take tips on face value…
Be careful of forums like Hot Copper (BS could be a better abbreviation for some posts there). There is gold to be found in all stock forums but sometimes you have to sift through a lot of less desirable gold coloured material to find it!....
Paper trade for 6 months to prove you are not going to lose your money….
Don't gear your investments with products like CFD's unless you really know what you are doing. My recommendation is don't gear - full stop…..
Get some education in trading so you can do your own research and not become a lemming (ie follow someone else over a cliff)…..
Beware if trading a performing sector, as it is more likely to become an underperforming sector much sooner than most of us expect….most of us are already in those “performing sectors”, we are just waiting to sell our holdings to you….We have already used our Tools of Trade to get into performing sectors before they started to rise in value, we have also used those tools to evaluate an approximate “Exit Point”….
Be careful if you decide to trade for “Dividends Only”, The ATO likes Traders/Investors with that approach…
What timeframe are you looking at to carry out your Technical &/or Financial Analysis over….
For Technical Analysis what do you know about Charts, or Chart Indicators, or Candlesticks etc…..
For Financial Analysis what do you know about Ratios, or Margins of Safety….
Do you understand Balance Sheets, can you correctly interpret the figures they quote…..
What type of charts are you using, Linear, Log or Arithmetic, Each Chart Type produces slightly different outcomes when conducting Chart Analysis…..
Do you understand Technical Analysis Tools like Charts & Indicators, do you understand how to read them, do you understand what they are telling you…?
Do you use any other indicator over or on top of your Chart or Basic Indicators – if not, why not…
Personally, I use several indicators on all my charts, IMO that gives me several different points of view on the Technical Merit of a stock – why would you only rely on one….
IMO, Traders should not get too involved with STOP LOSS points - I do not use a Conventionally Accepted STOP LOSS or TRAILING STOP LOSS System….I feel that those systems belong to the Longer Term Investors….Once I have in my opinion, enough Signals/Signs from my Tools of Trade, I will act immediately….For example if a Bearish Candle Pattern and/or my Indicators suggest that a pullback or downtrend is imminent I will follow those signals and exit the Trade immediately....If I were to use a % Stop Loss System (of say 2%) and my Tools of Trade gave me enough signals to exit for say 0.5%, I would be crazy to hold and watch any small loss be increased just because that “% Stop Loss System” told me I had to wait till my losses reached that magical 2% - it would be easier to just give some money away....Admittedly I sometimes exit a trade early – but I prefer to be cautious – and if my Tools of Trade suggest continued uptrend then I can easily re-enter the Trade....- the idea is to trade when there is a trade to be made, and even then you should 'Play the Trade' (like playing a Fish), you should not trade the $$$'s - get the trades right and the $$$'s will automatically follow…
Do you know what the “ASX staggered Open Times are”.
Do you know what the “ASX Pre-CSPA Times are”.
Try this site Cash market trading hours (asx.com.au) .
Do you know what Candle Construction is and how to interpret it…?
Do you know what Tick and Intraday Charts are and how they relate to Daily Charts……?
Emotion and Intuition are very useful in this industry – do not disregard either one...
Experienced traders do NOT make money off fellow Traders – We profit from mistakes made by Newbies…
Let me know when you master all of the above aspects of this profession – I will then post the more complicated 10 pages of “what you need to know” if you are going to dabble in this Sand Pit.
Good Luck...
DrB.
The following may seem harsh to you, but I'm trying to stop you losing money….
Basically there is a lot to learn about this industry, but IMO you HAVE started off with the correct approach, by asking questions….
Here are a few suggestions for you to contemplate…
These are in no particular order…..
I’m just going to drop suggestions one after the other as they come to me…
What Tier Data Provider do you use, Tier 1, 2, 3 or 4 - depending on your trading time frames, some of us could have bought and sold the share you want to buy, 2 or 3 times before you get your data, so be careful what Share Trading Platform you use….
You need to know what certain “external events” have on stocks, particularly when they happen outside Trading Hours – for example how do stocks react to Interest Rate Changes, or to Commodity Price changes – for example a Mining Stock may rise or fall when Iron Ore or Gold prices change, but Health Funds may not react….
How will you identify a Positive History – Companies only issue Financials periodically through the year – any Financial or Rumour effects on a Companies Financials are interpreted differently by various analysts – which one will you believe – or are you able to dissect a Balance Sheet.
A Stocks History over 12 mths is irrelevant… A Stocks History is normally 5 to 10 years….Which of the approx 50 Ratios and/or 30 Margins of Safety would you be looking at to help evaluate a Positive History??..Which of these Buffett style calculations would you be using to help your evaluation of a stock:- DDM, DDMF, GIVF, PRESVAL, RIV, ERI, NCAV, PAYBACK, PEG, PEGY, STRET, STRETD, TARG, TARGD, EGROWTH, ESAFETY, PESAFETY, (there are several others)….
Do you know what the overnight “ASX SPI” is, and how it will effect todays Share Prices….
Do you understand how Stocks react to certain Political Decisions....
Do you know what time the Economic Clock is ATM....
Do you understand the S&P Credit Rating System for Companies (AAA, BBB, etc), and what those ratings mean to a Company….
Do you know what ‘Minor Irritants’ such as Algorithmic Traders, Swing Traders and Option Traders do and how they effect a companies share price…
Do you know IF your chosen Stock CAN be Shorted…
Do you understand how Short Selling effects your chosen Stock….
Do you calculate your own “Intrinsic Values” – if not why not??..
Do you know what Australian ADR Stocks are - do you know how they effect their Australian equivalent....
Do you check Overseas Exchanges to see how Australian Dual Listed Stocks performed yesterday, their + or – for the day is usually reflected here in Aust…
Check out the NCM Stocks on the Dow Jones – Start by searching for NCMGF and NCMGY…
Don’t Trade too many stocks at the same time, it is not easy, while you are winning and watching your profits grow on say 2 or 3 of them, the others can quickly reverse and obliterate any profit you thought you may have had….
Why not trade 2 or 3, have all 3 charts and all 3 Market Depths on multiple screens at the same time, and watch them “like a hawk”….
Don't take tips on face value…
Be careful of forums like Hot Copper (BS could be a better abbreviation for some posts there). There is gold to be found in all stock forums but sometimes you have to sift through a lot of less desirable gold coloured material to find it!....
Paper trade for 6 months to prove you are not going to lose your money….
Don't gear your investments with products like CFD's unless you really know what you are doing. My recommendation is don't gear - full stop…..
Get some education in trading so you can do your own research and not become a lemming (ie follow someone else over a cliff)…..
Beware if trading a performing sector, as it is more likely to become an underperforming sector much sooner than most of us expect….most of us are already in those “performing sectors”, we are just waiting to sell our holdings to you….We have already used our Tools of Trade to get into performing sectors before they started to rise in value, we have also used those tools to evaluate an approximate “Exit Point”….
Be careful if you decide to trade for “Dividends Only”, The ATO likes Traders/Investors with that approach…
What timeframe are you looking at to carry out your Technical &/or Financial Analysis over….
For Technical Analysis what do you know about Charts, or Chart Indicators, or Candlesticks etc…..
For Financial Analysis what do you know about Ratios, or Margins of Safety….
Do you understand Balance Sheets, can you correctly interpret the figures they quote…..
What type of charts are you using, Linear, Log or Arithmetic, Each Chart Type produces slightly different outcomes when conducting Chart Analysis…..
Do you understand Technical Analysis Tools like Charts & Indicators, do you understand how to read them, do you understand what they are telling you…?
Do you use any other indicator over or on top of your Chart or Basic Indicators – if not, why not…
Personally, I use several indicators on all my charts, IMO that gives me several different points of view on the Technical Merit of a stock – why would you only rely on one….
IMO, Traders should not get too involved with STOP LOSS points - I do not use a Conventionally Accepted STOP LOSS or TRAILING STOP LOSS System….I feel that those systems belong to the Longer Term Investors….Once I have in my opinion, enough Signals/Signs from my Tools of Trade, I will act immediately….For example if a Bearish Candle Pattern and/or my Indicators suggest that a pullback or downtrend is imminent I will follow those signals and exit the Trade immediately....If I were to use a % Stop Loss System (of say 2%) and my Tools of Trade gave me enough signals to exit for say 0.5%, I would be crazy to hold and watch any small loss be increased just because that “% Stop Loss System” told me I had to wait till my losses reached that magical 2% - it would be easier to just give some money away....Admittedly I sometimes exit a trade early – but I prefer to be cautious – and if my Tools of Trade suggest continued uptrend then I can easily re-enter the Trade....- the idea is to trade when there is a trade to be made, and even then you should 'Play the Trade' (like playing a Fish), you should not trade the $$$'s - get the trades right and the $$$'s will automatically follow…
Do you know what the “ASX staggered Open Times are”.
Do you know what the “ASX Pre-CSPA Times are”.
Try this site Cash market trading hours (asx.com.au) .
Do you know what Candle Construction is and how to interpret it…?
Do you know what Tick and Intraday Charts are and how they relate to Daily Charts……?
Emotion and Intuition are very useful in this industry – do not disregard either one...
Experienced traders do NOT make money off fellow Traders – We profit from mistakes made by Newbies…
Let me know when you master all of the above aspects of this profession – I will then post the more complicated 10 pages of “what you need to know” if you are going to dabble in this Sand Pit.
Good Luck...
DrB.
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Abit harsh sounding when read,but it is so true.and then if you obviously do not know all of these, how do you start small? Can you dovide to conquer?
I personally try to narrow on an area technical analysis,system trading,weeklythen daily etc.. otherwise the task is overwhelming when starting from scratch.even so,after 3 years of relative strong dedication and hours of reading learning, i am still so novice.
But yes narrow and deepen knowledge on a niche area to start would be my advice
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A couple of random points:
1. Regardless of the timeframe on the chart, make sure it matches how you're using it. Trying to get daily signals from a weekly chart, or hourly signals from a daily chart, is asking for trouble unless you're using it in a manner such that the incomplete latest data point isn't a problem.
If you want hourly charts then look at hourly charts. Etc.
2. Any mechanical trading system only works if you can and do actually follow it in the manner it was designed and tested to work.
Eg if your system is based around weekly charts and buying or selling on the Monday (or on the first trading day of the week if Monday is a non-trading day) then it's only going to work if you do in fact look at weekly charts, you look at them sometime after the Friday close and before the Monday open, and you do in fact take the action you've determined as required.
Start trying to second guess it, eg looking at the chart on Wednesday and thinking you'll get in early, or alternatively start getting lazy and not bothering to action the buys or sells until later in the week and you're no longer trading the system you designed and tested. That being so, it's anyone's guess if what you're actually doing will be profitable.
3. Leverage is the financial equivalent of turning up the speed, temperature, voltage, pressure or whatever in some physical situation. It amplifies the benefits if it goes right and it also amplifies the destruction if it goes wrong. Leave leverage right out of it in my view at least until you have a proven profitable system.
4. Your own personality is definitely relevant. Don't underestimate the importance of this as there's no point in coming up with a trading method and system that your own personality finds impossible to adhere to.
1. Regardless of the timeframe on the chart, make sure it matches how you're using it. Trying to get daily signals from a weekly chart, or hourly signals from a daily chart, is asking for trouble unless you're using it in a manner such that the incomplete latest data point isn't a problem.
If you want hourly charts then look at hourly charts. Etc.
2. Any mechanical trading system only works if you can and do actually follow it in the manner it was designed and tested to work.
Eg if your system is based around weekly charts and buying or selling on the Monday (or on the first trading day of the week if Monday is a non-trading day) then it's only going to work if you do in fact look at weekly charts, you look at them sometime after the Friday close and before the Monday open, and you do in fact take the action you've determined as required.
Start trying to second guess it, eg looking at the chart on Wednesday and thinking you'll get in early, or alternatively start getting lazy and not bothering to action the buys or sells until later in the week and you're no longer trading the system you designed and tested. That being so, it's anyone's guess if what you're actually doing will be profitable.
3. Leverage is the financial equivalent of turning up the speed, temperature, voltage, pressure or whatever in some physical situation. It amplifies the benefits if it goes right and it also amplifies the destruction if it goes wrong. Leave leverage right out of it in my view at least until you have a proven profitable system.
4. Your own personality is definitely relevant. Don't underestimate the importance of this as there's no point in coming up with a trading method and system that your own personality finds impossible to adhere to.
Last edited:
tech/a
No Ordinary Duck
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Some good points Smurf and Froggy
id just like to add 2 areas often glossed over
(1) smurf touched on system trade management but for those not trading systems trade management is much more important as it is much more involved but in my view should be focused on Reward for Risk
which brings me to
(2) Risk Reward
Here is the crux of profitable trading
getting risk lower and reward higher.
Pete 2 shows this time and again.
There are 3 ways to ensure profit
(1) More wins with an accumulated profit
More than accumulated losses.
(2) Much larger wins than losers.
(3) A combination of both (1) and (2)
If you can’t achieve any of or better still all of the above
you DONT have a trading edge.
id just like to add 2 areas often glossed over
(1) smurf touched on system trade management but for those not trading systems trade management is much more important as it is much more involved but in my view should be focused on Reward for Risk
which brings me to
(2) Risk Reward
Here is the crux of profitable trading
getting risk lower and reward higher.
Pete 2 shows this time and again.
There are 3 ways to ensure profit
(1) More wins with an accumulated profit
More than accumulated losses.
(2) Much larger wins than losers.
(3) A combination of both (1) and (2)
If you can’t achieve any of or better still all of the above
you DONT have a trading edge.
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Hi Luke, I just joined this forum and your post caught my attention.
I like your attitude, it reflects my own. I've been at this for many years, first time trading futures then a break and now back to trade stocks and ETF's using options. I may be able to help you on your journey with some concepts that took me quite a while to understand. For me understanding has been my key to moving forward, I was the kid that pestered his parents always saying 'but why'.
I'm not familiar with the forum yet so I don't how to message you but if you want to contact me I can explain some concepts, tell you some places where I've learnt things and give you some documentation to read.
Regards, Dave
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To private message someone, just hover your mouse pointer over their user name and a Member Card will pop up with an option "Start conversation" that you can click to send them a message.
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Good luck Luke and Dave and good to see you are reading and learing as much as you can. Education is the greatest asset you can have in trading. Most investors gain that education just by doing and learning the hard way so anything you can pick up without putting your money at risk is good. No matter how much study you do (I did a couple of formal trading courses over 2 years fulltime which cost about $20K - so not for everyone). Those courses really helped but when you start to put theory into practice you often find the market hasn't read the text books and often comes back to bite you in the rear. I chose technical analysis (charting) as my preferred way of picking trades rather than fundamental analysis. Both work but for a range of reasons charting gets my vote every time as it allows you to quickly asses a large number of companies quite quickly when looking for new trades. The downside is that charting is much more work to learn and understand, and as such it is certainly not for everyone.
I was on another forum which closed recently and new members always had the same set of questions and I made a video that set out a few things I think new traders should keep in mind. It's here if you want a look https://sharecharting.com.au/stock-commentary-blog/227-some-answers-for-those-new-to-the-market
You'll find a few other videos and a range of share charts and past analysis there that I've posted over the past 3 months as well as a weekly market blog. The blog and most newcharts will be posted on ASF going forward as well but as I've only just moved here you won't find much history for me on ASF yet.
Good luck with your trading and if you have any questions feel free to ask - as they say there is no such thing as a stupid question just stupid answers (and I try not to provide too many of those). Oh and above all remember that my comments are only my view and (unfortunately) not guaranteed - and you always need to make trading descisions based on your research.
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Mate this is exactly where I am at too, however I am a 40yo Horticulturalist! All the best in your learning, so much information to absorb and understand just to find out what you dont want, and what you do want to pursue as another poster stated.
over9k
So I didn't tell my wife, but I...
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There's quite a few guys on this forum that have written guides or run market analysis threads etc, myself included.
Here's a basic charting guide I wrote: https://www.aussiestockforums.com/t...alysis-chart-reading-101-for-beginners.36157/
And here's a more advanced one by @tech/a https://www.aussiestockforums.com/t...invest-profitably-without-the-bullsh-t.36033/
I also do a lot of posting on U.S markets in this thread: https://www.aussiestockforums.com/t...of-a-sars-coronavirus-outbreak.35169/page-261
I know there's others.
I also know that pretty much everyone are more than happy to help out with any questions you might have if you post them up in their respective threads
Here's a basic charting guide I wrote: https://www.aussiestockforums.com/t...alysis-chart-reading-101-for-beginners.36157/
And here's a more advanced one by @tech/a https://www.aussiestockforums.com/t...invest-profitably-without-the-bullsh-t.36033/
I also do a lot of posting on U.S markets in this thread: https://www.aussiestockforums.com/t...of-a-sars-coronavirus-outbreak.35169/page-261
I know there's others.
I also know that pretty much everyone are more than happy to help out with any questions you might have if you post them up in their respective threads
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Hi Ben, learning to trade can take a long time and is ongoing. I’ve had years of experience and I’m still learning. There are so many different styles of trading, and I’m not just talking about time frames, I mean completely different approaches.
In my opinion it’s important how you think about the task of learning to trade. You are going to build a machine that you feed the input with money and the machine spits out a larger amount of money from the output.
Think about all the indicators, chart patterns, characteristics of price movement, trader tricks and fundamentals as tools that you will use to build your machine. As tools you will need to learn what they do and how to use them but the more important thing to learn is the concepts of how your machine will work.
Only after you decide what type of machine that you want can you begin to build it. Don’t forget to consider how complicated it will be to operate the machine. It should be safe to operate, you don’t want it breaking down on you or blowing up in your face.
My final tip is to have a big-picture master plan so you can see all individual bits that you have do in order to design, build and test your machine.
Modest
It's in the chart
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Presuming you’re heading down the technical analysis path and not funnymentals then below is all you need to know/study.
1. Support and Resistance
2. Wyckoff Theory (Accumulation and Distribution.
3. Price Action
No indicators required, not even a MA. Some people love to over complicate this because they don’t believe it can be so simple. You can blame all the so called “gurus” online and snake oil salesman/ nik sykes types
Check out the micro CME instruments when you’re ready to dip your toes. $1.25 USD per tick $MES and very liquid
1. Support and Resistance
2. Wyckoff Theory (Accumulation and Distribution.
3. Price Action
No indicators required, not even a MA. Some people love to over complicate this because they don’t believe it can be so simple. You can blame all the so called “gurus” online and snake oil salesman/ nik sykes types
Check out the micro CME instruments when you’re ready to dip your toes. $1.25 USD per tick $MES and very liquid
