Dump it Here

[ducati916]

When I was new to trading I'd heard people saying that you need a trading plan but I was unsure about how to create one. These days you can get info on just about anything if you just google it. My advice is to break up the parts of your trading plan into blocks and research each block to gain a workable level of knowledge in that area, then when you have your blocks of knowledge then you work on the best way to integrate the blocks to come up with your first trading plan.

Most importantly, don't forget the first block in your plan, that is the selection of what you will be trading. What you trade will also influence how you will trade it. Keep in mind your personality and your lifestyle when selecting what and how to trade. Hope this may help some that, like me, were a little unsure about how to go about this thing that everyone keeps talking about.

For your personality: https://www.thepersonalitylab.org/m...2IUEcBfE8t3xBK1PMfABrGspxA2couwxoCZPAQAvD_BwE



jog on
duc

 

[Skate]

For your personality: https://www.thepersonalitylab.org/m...2IUEcBfE8t3xBK1PMfABrGspxA2couwxoCZPAQAvD_BwE



jog on
duc

Personality Test
I recently took a personality test that @ducati916 hyperlinked to and discovered that I am a Defender/Protector archetype. Individuals with these characteristics are typically associated with caring, empathy, dependability, and a strong desire to help and protect others. People that exhibit these traits are known for their hard work, dependability, and dedication. They find fulfilment in contributing to the well-being of others around them.

While personality tests can provide useful information about our tendencies and capabilities, it is crucial to realise that they are not conclusive or absolute. Learning more about the Defender/Protector archetype and how it relates to my own characteristics, on the other hand, has been a fun exercise. It's also worth mentioning that, while such tests can be entertaining and educational, they frequently come at a cost.



Skate.

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

35. Creating a trading plan
To stay in this game and achieve long-term trading success you will need a well-defined trading plan that can help you manage risk and several other crucial factors.

When creating a trading plan, you first need to set realistic expectations by understanding how you will react when trading doesn’t go your way based on your risk tolerance. It is also necessary to decide what market you will trade, and the technical indicators you will use to identify trade opportunities and to manage risk when trading goes against you.

There are several crucial factors to consider while developing a complete trading plan. To begin, you will need to decide how much money you'll set aside for trading, "money that you can afford to lose" and the formula you will use to allocate that money to each and every trade. This will help you reduce risk by stopping you from committing too much money to a single trade.

Second, in addition to a trading plan, it must include your trading strategy. This involves deciding what to trade, which index to trade, and which time frames to use. In addition, you should precisely define your entry condition and the indicators and analysis tools you will use to make those trading decisions.

Another important consideration is when you will not act on a trading signal or buy a position. This could be due to market factors like excessive volatility or a lack of liquidity, or it could be due to fundamental reasons like changes in a company's management or financial performance.

It's also important to have a plan in place for unexpected events, such as takeovers or the execution of a deed of arrangement. This should include any activities you intend to take in such instances to manage your positions to minimise your losses.

It's also critical to document every step of your trading plan and strategy, including your buy condition, exit strategy, filters, parameters, and risk management measures, to decide when you will and won't action buy and sell signals. This will assist you in being focused and disciplined during your trading operations.

Furthermore, identify what you will do when you are on a winning streak, such as taking profits or raising your position size, and what you will do when you are on an extended losing streak, such as decreasing your losses or taking a break from trading to evaluate your strategy.

Successful traders understand the need of examining market data to identify trends, patterns, and other indicators that can assist them in making informed decisions. Regularly monitoring the market and establishing a deep understanding of the underlying data can help you identify opportunities and manage risk. In this context, technical analysis, quantitative modelling, and other data-driven indicators might be useful tools.

Risk management is an important aspect of trading, and controlling the risk is so important by utilising methods at your disposal such as buy filters, trailing stops, stale stops, and position size, which is critical in risk management and loss limitation. To limit risk and maximise returns, you should also specify a take-profit stop level.

Once you've created a trading plan, write it down so you may refer to it on a frequent basis. Backtest your trading strategy using historical data to see how it performs and make changes as needed. Finally, put your trading strategy into action and stick to it. Regularly monitor and examine your performance to identify opportunities for improvement.

To summarise, by following these steps, you can develop a clear and well-defined trading plan that will help you achieve your trading objectives, manage risk, and improve your long-term trading success, while also considering the importance of market data analysis, risk management techniques, entry and exit points, trading psychology, and regularly monitoring and analysing your trading results.

Skate.

 

[ducati916]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

35. Creating a trading plan
To stay in this game and achieve long-term trading success you will need a well-defined trading plan that can help you manage risk and several other crucial factors.

When creating a trading plan, you first need to set realistic expectations by understanding how you will react when trading doesn’t go your way based on your risk tolerance. It is also necessary to decide what market you will trade, and the technical indicators you will use to identify trade opportunities and to manage risk when trading goes against you.

There are several crucial factors to consider while developing a complete trading plan. To begin, you will need to decide how much money you'll set aside for trading, "money that you can afford to lose" and the formula you will use to allocate that money to each and every trade. This will help you reduce risk by stopping you from committing too much money to a single trade.

Second, in addition to a trading plan, it must include your trading strategy. This involves deciding what to trade, which index to trade, and which time frames to use. In addition, you should precisely define your entry condition and the indicators and analysis tools you will use to make those trading decisions.

Another important consideration is when you will not act on a trading signal or buy a position. This could be due to market factors like excessive volatility or a lack of liquidity, or it could be due to fundamental reasons like changes in a company's management or financial performance.

It's also important to have a plan in place for unexpected events, such as takeovers or the execution of a deed of arrangement. This should include any activities you intend to take in such instances to manage your positions to minimise your losses.

It's also critical to document every step of your trading plan and strategy, including your buy condition, exit strategy, filters, parameters, and risk management measures, to decide when you will and won't action buy and sell signals. This will assist you in being focused and disciplined during your trading operations.

Furthermore, identify what you will do when you are on a winning streak, such as taking profits or raising your position size, and what you will do when you are on an extended losing streak, such as decreasing your losses or taking a break from trading to evaluate your strategy.

Successful traders understand the need of examining market data to identify trends, patterns, and other indicators that can assist them in making informed decisions. Regularly monitoring the market and establishing a deep understanding of the underlying data can help you identify opportunities and manage risk. In this context, technical analysis, quantitative modelling, and other data-driven indicators might be useful tools.

Risk management is an important aspect of trading, and controlling the risk is so important by utilising methods at your disposal such as buy filters, trailing stops, stale stops, and position size, which is critical in risk management and loss limitation. To limit risk and maximise returns, you should also specify a take-profit stop level.

Once you've created a trading plan, write it down so you may refer to it on a frequent basis. Backtest your trading strategy using historical data to see how it performs and make changes as needed. Finally, put your trading strategy into action and stick to it. Regularly monitor and examine your performance to identify opportunities for improvement.

To summarise, by following these steps, you can develop a clear and well-defined trading plan that will help you achieve your trading objectives, manage risk, and improve your long-term trading success, while also considering the importance of market data analysis, risk management techniques, entry and exit points, trading psychology, and regularly monitoring and analysing your trading results.

Skate.

Lots of information. Your starting point:

1. Determine your risk tolerance. You will almost certainly overestimate it. If your starting capital is say $100K then put $75K back in the bank and trade $25K. Risk no more than 5% as a max loss on any 1 position of that $25K.

2. Determine your broad strategy. Are you (a) long only? (b) Long or short? Or (c) long/short/sideways? Only (c) is a diversified strategy. (a) is a very concentrated strategy.

3. What are you actually trading? Stocks, Bonds, Futures, Options, Currencies?

4. What is your edge? If you cannot define your edge in 1 sentence, you do not have an edge.

jog on
duc

 

[DaveTrade]

To stay in this game and achieve long-term trading success you will need a well-defined trading plan that can help you manage risk and several other crucial factors.

A well-defined trading plan can take you a while to achieve, don't expect your first attempt to be a complete success. there are common elements with all trading plans but as there are many ways to trade there are also many very different trading plans. View your first trading plan as something to test and learn from, not as the holy grail of trading.

Lots of information. Your starting point:

1. Determine your risk tolerance. You will almost certainly overestimate it. If your starting capital is say $100K then put $75K back in the bank and trade $25K. Risk no more than 5% as a max loss on any 1 position of that $25K.

2. Determine your broad strategy. Are you (a) long only? (b) Long or short? Or (c) long/short/sideways? Only (c) is a diversified strategy. (a) is a very concentrated strategy.

3. What are you actually trading? Stocks, Bonds, Futures, Options, Currencies?

4. What is your edge? If you cannot define your edge in 1 sentence, you do not have an edge.

jog on
duc

Some concise but clear and very useful advice here, particularly point one for people starting out, keep yourself alive while your learning. Each of the points above requires a lot of research and experimentation, some money may be lost while you're doing this work but it can be worked through without any big losses.

My advice comes from my own limited experience and what I've learnt from others. I've found that other people look at trading in varying and different ways and certain views will click with you at different stages of your trading journey.

 

[Skate]

Lots of information.

A well-defined trading plan can take you a while to achieve,

In layman terms, trade by trend, a trader watches intently to enter early (buy) and holds the position until the trader believes the trend looks like it will reverse or has reversed (sell) cashing in on share price (SP) momentum.

Having a diverse point of view may be quite beneficial, especially when it comes to learning and personal development. We can obtain new insights and broaden our understanding of a topic by engaging in discussions with others and sharing views.

The "Dump it here" thread is an excellent illustration of how member participation may improve the learning experience. By enabling others to participate and offer their opinions, the thread becomes more dynamic and interactive, allowing participants to learn from one another.

Having a varied range of perspectives might be very advantageous when it comes to mechanical system trading. Trading is a complex and ever-changing industry, and there is always something new to learn. We may obtain a deeper understanding of the market and develop more effective trading methods by bouncing ideas off of others and hearing their viewpoints.

However, it's vital to remember that when we express our own ideas and viewpoints, we're merely adding to the conversation. We should constantly be willing to hear from others and consider other points of view. This allows us to broaden our knowledge and become better traders.

Finally, having a distinct perspective is not only advantageous but also necessary for personal growth and learning. We can obtain new insights and expand our awareness of the world around us by interacting with others and sharing ideas.

Skate.

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

36. Creating a trading strategy
Having a trading strategy in place, in my opinion, is essential for success in the financial markets. Traders can decrease the influence of irrational and emotional decision-making and make more rational, well-informed decisions by adhering to a clearly defined set of trading rules and established trading methodology.

Creating a trading strategy is a critical first step toward trading success. It takes time, effort, and thorough research to develop a set of rules and methodologies that will assist you in making informed decisions about when to buy and when to exit a position. The core of your method is a trading technique, which reduces the influence of irrational and emotional decision-making.

To develop a successful trading strategy, you must first identify a trading style that fits your personality and time horizon. To find possible trading positions, extensive study, and analysis are also required. Technical analysis, which involves the examination of price charts to determine market patterns and trends, is an important aspect of trading.

Once you've established a basic trading strategy, you can add filters and parameters to improve its effectiveness. These tools assist you in identifying profitable trades while also managing risk. Price data is smoothed by filters and parameters, which identify trends and assess momentum. They may also assist you in establishing minimum and maximum price ranges, trading volumes, and drawdown levels.

Backtesting your trading technique is essential for determining its effectiveness using historical data allows you to examine how it would have fared in the past. Backtesting enables traders to analyse the strategy and make any necessary improvements before adopting it in live trading. As a result, it is a critical step in determining the potential effectiveness of a trading strategy.

The term "essential" indicates that backtesting is absolutely necessary for a strategy to succeed, which is not always the case. While backtesting can provide useful insights into a strategy's performance, it is not a guarantee of future success.

It's important to remember that establishing a trading strategy is a continuous process. Traders should assess and adjust their strategy on a frequent basis to reflect changing market conditions. Backtesting your strategy is an important step in gauging its potential success. You may reduce risk and lock in profits by integrating exit strategies such as setting specified price levels or drawdown limitations.

Traders must maintain discipline, focus, and dedication to their financial goals in order to thrive in the markets. Creating a thorough trading strategy that is tailored to your unique demands improves your chances of trading success. Trading entails some risk, but a strong trading strategy can assist in reducing risk while increasing rewards.

By adopting these steps, traders can develop a thorough trading strategy that is personalised to their specific needs, increasing their chances of trading success. After you've discovered major market patterns, you may start developing a trading strategy. Your trading strategy should contain entry and exit points, as well as stop-loss and take-profit levels. Sticking to your trading plan, especially while emotions are running high, is the key to success.

However, when designing a trading strategy, traders must also be versatile and adaptive, as market conditions can change quickly and an approach that worked in the past may not work in the future. When market conditions change, traders must be willing to adapt their strategy. Shares can be purchased and sold by anyone, but how positions are selected and managed is the secret to trading success.

In conclusion, building a trading strategy requires time, effort, and research, but the potential returns can be substantial. It's critical to find a trading strategy that fits your personality and time horizon, as well as to undertake significant research and comprehend technical analysis. Including filters and criteria, analysing and backtesting your strategy on a regular basis, and having exit strategies in place will help you control risk and increase returns. A solid trading strategy is essential for overcoming market obstacles and attaining your financial goals.

Skate.

 

[Skate]

In my series of daily posts, I’m keeping the information presented at a beginner’s level and as generic as possible. The System Analysis Project (SAP) is aimed at beginners new to system trading. With the “SAP Strategy” starting shortly it’s the ideal time to discuss some of the filters that are used in this new strategy,

The SAP Trading Strategy incorporates various filters and parameters to make it a more effective trading system. Filters and parameters are tools that help identify profitable trades while minimising risk. As a result, I believe the information being presented with this project displays an alternative way to learn about the various filters that may be utilised to build a profitable trading system.

The SAP Strategy employs a number of filters that have been carefully chosen to maximise the result. Trend filters, volatility filters, and momentum filters are among the filters in the SAP Strategy. These filters aid in identifying trends, that measure market volatility, and are able to detect changes in momentum, all of which can find possible trading opportunities.

In addition to filters, the SAP strategy employs flexible parameters to optimise system performance for maximum profitability, and minimal risk by carefully tweaking these settings. The SAP Strategy incorporates a multi-level trailing stop as well as a stale exit, and position sizing are examples of these parameters.

Multiple exit strategies are another significant component of the SAP strategy. Traders can help to minimise losses and maximise profits by employing a well-defined exit strategy. These are predetermined rules that govern when to exit a trade in order to take profits or limit losses. Trailing stops, profit objectives, and time-based exits are examples used in this strategy.

Overall, the SAP approach is an excellent resource for anyone seeking to trade systematically. The SAP Strategy by including a variety of filters, parameters, and exit strategies is an excellent way to learn more about the tools and strategies used in system trading, whether you're a beginner or an experienced trader.

Skate.

 

[Skate]

The SAP Trading Strategy incorporates tools to help you identify profitable trades while minimising risk that includes technical indicators, and various filters to make it a more effective trading system. Filters and parameters can help you identify optimal trading opportunities by smoothing out price data, identifying trends, and measuring momentum. They can also help you manage risk by setting minimum and maximum price ranges, trading volumes, and drawdown levels.

Trading plans can be complex and difficult to develop, but having a well-defined approach can greatly boost your chances of market success. The SAP Strategy has a number of these filters being used throughout the strategy. The ones below are some of the generic filters I tend to use on a regular basis as they are proven workhorses. Filters, help identify trades that have a chance of being profitable and they also time the exit precisely.

The SAP Strategy filters are as follows:

1. The Hann Filter is used in signal processing that smooths data by removing high-frequency noise while maintaining low-frequency components.

2. The VWMA Filter is a moving average that provides more weight to periods with higher volume. This is due to the fact that greater volume periods are regarded as more significant. The VWMA Filter is used to spot trends in price movements.

3. The Elder Impulse Filter is a trend-following indicator that identifies inflection points where a trend accelerates or decelerates and is used to spot changes in trend direction.

4. The stand-alone Momentum Filter is used to find positions that are building or decreasing in momentum.

5. The Price Filter is a parameter that specifies the minimum and maximum price range for a stock to be considered for inclusion in the buy condition. We use the Price Filter to guarantee that we only buy positions that fall between the two.

6. The Turnover Filter determines the minimum trading volume required to be included in our buy condition to ensure that we only buy positions that are actively traded.

7. The Volume Filter is a parameter that determines the minimum trading volume required to be included in our purchase condition to ensure that we only buy positions with large trading volumes.

8. The Rate of Change Momentum Filter is a technical indicator that analyses the pace of change in the price of a security over a specified time period to find positions that are building momentum.

9. The Position Sizing is a set of criteria used to decide the size of our position "bet size" to ensure that our capital is allocated to each stock in our portfolio

10. The Maximum Number of Positions in the Portfolio specifies the maximum number of positions that can be held in our portfolio at any given time. This parameter is used in our trading approach to guarantee that we are not overexposed to any single stock.

11. The Ranking System, “Position Score” ranks the buy signals in a top-down approach that ensures the signals with the highest probability of success being listed at the top of the list in a descending order format.

12. Commission and slippage are trading costs and these criteria are used in our trading strategy to ensure that we account for the costs of trading.

13. The Percentage Up Filter is a buy filter that requires at least 50% of the index to be moving upward during a given time period. While this filter assures that we only enter positions that are part of an upward trend, it might make the strategy less interesting because it may require waiting for extended periods of time.

Skate.

 

[Skate]

Multiple Exits
Incorporating a variety of exit strategies in my opinion are essential components of trading since they help to control risk and lock in profits. Employing numerous exit options ensure trading funds are not bogged down sitting in non-performing trades. When positions fail to perform as expected, they are cut loose quickly no matter if they are in a winning or losing position.

The SAP Strategy exit conditions:

1. The Time Exit parameter specifies the time period after which we will leave a trade. Including a Time Exit into the strategy guarantees that we do not hold a position for too long if the position goes stale, meaning if the position moves sideways or downwards due to the lack of momentum the position is deemed to have gone stale.

2. Get the Funds Out (GTFO) Filter is a parameter that specifies the price at which the strategy will exit a trade. This filter is meant to protect the portfolio capital against market collapses or abrupt downturns. Including the GTFO Filter ensure that a trade is quickly exited when the market shows signs of extreme volatility.

3. The Volatility Exit specifies the level of volatility at which the strategy shall exit a trade. In times of significant volatility, this filter controls risk and protects the portfolio capital. In a nutshell, the Volatility filter technique ensures that a trade is exited when the market exhibits the indication of excessive volatility.

4. The Ulcer Index Indicator is a technical indicator that tracks price declines in an asset over a given time period. The Ulcer Index Indicator is used to define a safe threshold of drawdown of individual positions. The trade will be abandoned if the drawdown exceeds this threshold in order to protect the portfolio capital.

In Conclusion
Developing a trading strategy that involves a multitude of filters and factors will help traders succeed in the markets. Traders can discover profitable trades while minimising risk by employing technical indicators, parameters, and exit strategies. Backtesting your strategy and adjusting it as needed to guarantee that it remains effective in different market conditions is critical. To achieve long-term trading success, always remember to limit your risk and preserve your capital.

Skate.

 

[ducati916]

Furthermore, identify what you will do when you are on a winning streak, such as taking profits or raising your position size, and what you will do when you are on an extended losing streak, such as decreasing your losses or taking a break from trading to evaluate your strategy.

This is one area that Mr Skate and I seem to be on polar opposites.

View attachment 158080

Multiple Exits
Incorporating a variety of exit strategies in my opinion are essential components of trading since they help to control risk and lock in profits. Employing numerous exit options ensure trading funds are not bogged down sitting in non-performing trades. When positions fail to perform as expected, they are cut loose quickly no matter if they are in a winning or losing position.

The SAP Strategy exit conditions:

1. The Time Exit parameter specifies the time period after which we will leave a trade. Including a Time Exit into the strategy guarantees that we do not hold a position for too long if the position goes stale, meaning if the position moves sideways or downwards due to the lack of momentum the position is deemed to have gone stale.

2. Get the Funds Out (GTFO) Filter is a parameter that specifies the price at which the strategy will exit a trade. This filter is meant to protect the portfolio capital against market collapses or abrupt downturns. Including the GTFO Filter ensure that a trade is quickly exited when the market shows signs of extreme volatility.

3. The Volatility Exit specifies the level of volatility at which the strategy shall exit a trade. In times of significant volatility, this filter controls risk and protects the portfolio capital. In a nutshell, the Volatility filter technique ensures that a trade is exited when the market exhibits the indication of excessive volatility.

4. The Ulcer Index Indicator is a technical indicator that tracks price declines in an asset over a given time period. The Ulcer Index Indicator is used to define a safe threshold of drawdown of individual positions. The trade will be abandoned if the drawdown exceeds this threshold in order to protect the portfolio capital.

In Conclusion
Developing a trading strategy that involves a multitude of filters and factors will help traders succeed in the markets. Traders can discover profitable trades while minimising risk by employing technical indicators, parameters, and exit strategies. Backtesting your strategy and adjusting it as needed to guarantee that it remains effective in different market conditions is critical. To achieve long-term trading success, always remember to limit your risk and preserve your capital.

Skate.

Mr Skate from the previous 2 posts, which has provided a plethora of information, we can, from your backtested results find:

A 50% probability of any trade succeeding with a R/R of 1:2.

If that is not a wake up call to aspiring traders, I'm not sure what will be save a vicious drawdown.

Incidentally, that 1:2 is excellent and provides the foundation to tight trade management creating the profit generated.

Position size.
We are on opposite sides of the road on this one. You want to add to position size as the capital base increases.

From this fact we can extrapolate some arguments.

1. The capital base will be expanding because you have had a higher number of winning trades than losing trades.
2. Statistically we know that on a 50% probability expectancy there is a 50% probability of having a 6 trade losing run.
3. Because the losing run will come after the winning run, due to increased position size, the $ loss will be greater.

4. By reversing this and removing capital after a series of winning trades to maintain a consistent position size;
5. When the inevitable losing streak arrives, you have capital to add back to maintain consistent position size;
6. Because to make up an X% loss requires an X%+ return.

7. Unless you can add to the total number of trades taken, each position must grow following your method.
8. This will add to liquidity issues, shrinking the pool of tradable stocks. I myself require a daily average volume of 2M/shares

9. A tail event, imposed upon a portfolio built up by 4 years of compounding growth, will devastate that portfolio and time value expended.

Anyway, food for thought.

jog on
duc

 

[Skate]

System Analysis Project
Originally, for the project I intended to trade a modest $100,000 trading portfolio to demonstrate that system trading may be made simple. However, after hearing about my project, family members have indicated an interest in joining the strategy and investing an additional $100,000.

As a result, the strategy portfolio has now increased to $200,000, providing an excellent opportunity to generate even better results. However, I want to be upfront about the reality that managing other people's money comes with more stress. Where seasoned traders understand it takes time for a strategy to build others new to trading have an expectation of results straight away.

While the portfolio will still only have ten holdings, the weight of trading these positions with a larger portfolio can be significant. I made sure that everyone participating have been completely informed of the dangers of trading a new strategy and that they are comfortable with the potential losses. That said, I am certain that with careful management the SAP Portfolio can develop a successful trading strategy that will benefit everyone involved.

I am grateful for the trust that my family members have shown in me, and I am determined to manage this strategy with the utmost care and attention. As I implement this extended approach, I will continue to provide regular updates and insights into the ongoing progress to ensure that everyone following along is informed and comfortable with the progress of the SAP Strategy.

Skate.

 

[Skate]

Position size.
We are on opposite sides of the road on this one. You want to add to position size as the capital base increases.

@ducati916 I appreciate your perspective on position sizing, and I accept that we may disagree on this point and have different opinions on how to manage profits as well as losses.

While my approach involves increasing position size as the capital base grows and decreasing the bet size according to losses sustained, I want to emphasise that using this approach is based on careful analysis. Also, for full disclosure all my strategies have this param feature hard-coded into every one of my strategies to ensure every available dollar is in the markets fighting the good fight.

To begin, I agree that having more winning trades than losing trades might result in a rising capital base, which is why I believe it makes sense to increase position size in step with this expansion. However, I recognise that a losing streak is statistically likely, which is why I constantly include risk management strategies to defend against this probability.

Regarding your claim that a losing streak will result in larger losses due to increased position size, I would reply that this is why a correctly calibrated risk management plan is vital. We can reduce the potential losses from a losing streak by monitoring our risk exposure and modifying position sizing accordingly.

I understand that your strategy entails reducing cash after a string of winning trades in order to keep a steady position size, and I accept your viewpoint on this. However, I believe that increasing position size in tandem with a growing capital base can lead to better long-term profitability, as long as we are attentive in managing our risk exposure.

Ultimately, the key is to have a well-thought-out trading plan that takes into account risk tolerance, investment goals, and market conditions. I am committed to continually refining the trading strategy to ensure that we are maximising our potential returns while minimising our risks.

Skate.

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

37. Chart reading
Traders can benefit from chart reading as it’s an effective method for providing useful insights into market trends, patterns, and other factors that may influence market behaviour. Traders can discover crucial levels of support and resistance, prospective trend changes, and other critical information that might affect their trading decisions by analysing charts every now and again.

However, keep in mind that price swings are driven by a complex mix of psychological variables and market fundamentals rather than being completely rational or logical. As a result, traders must be aware of the emotional components of trading and be able to read the signals provided by charts.

One of the most important advantages of chart reading is that it can assist traders in better understanding the story that the market is conveying. Traders can get insights into the underlying market dynamics and make informed decisions about when to buy, sell, or hold their positions by analysing charts and looking for patterns and trends. This is especially useful in turbulent or uncertain markets, where emotions can run high, and traders may be tempted to act rashly based on fear or greed.

Of course, chart reading is not a flawless strategy for anticipating market behaviour, and traders must always keep the hazards of trading in mind. It's critical to grasp market fundamentals, risk management strategies, and other critical aspects that can influence the success of your trading. Nonetheless, by incorporating chart reading into your trading approach, you can improve your ability to interpret market data and make sound decisions in the face of uncertainty and volatility.

In conclusion, chart reading is an important skill for any trader to learn. Traders can use this skill to develop a strategy by deciphering the signals provided by charts and understanding the story they hold. Traders can improve their chances of success in even the most difficult market conditions by understanding the market fluctuations to better manage risk.

Skate.

 

[DaveTrade]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

37. Chart reading
Traders can benefit from chart reading as it’s an effective method for providing useful insights into market trends, patterns, and other factors that may influence market behaviour. Traders can discover crucial levels of support and resistance, prospective trend changes, and other critical information that might affect their trading decisions by analysing charts every now and again.

However, keep in mind that price swings are driven by a complex mix of psychological variables and market fundamentals rather than being completely rational or logical. As a result, traders must be aware of the emotional components of trading and be able to read the signals provided by charts.

One of the most important advantages of chart reading is that it can assist traders in better understanding the story that the market is conveying. Traders can get insights into the underlying market dynamics and make informed decisions about when to buy, sell, or hold their positions by analysing charts and looking for patterns and trends. This is especially useful in turbulent or uncertain markets, where emotions can run high, and traders may be tempted to act rashly based on fear or greed.

Of course, chart reading is not a flawless strategy for anticipating market behaviour, and traders must always keep the hazards of trading in mind. It's critical to grasp market fundamentals, risk management strategies, and other critical aspects that can influence the success of your trading. Nonetheless, by incorporating chart reading into your trading approach, you can improve your ability to interpret market data and make sound decisions in the face of uncertainty and volatility.

In conclusion, chart reading is an important skill for any trader to learn. Traders can use this skill to develop a strategy by deciphering the signals provided by charts and understanding the story they hold. Traders can improve their chances of success in even the most difficult market conditions by understanding the market fluctuations to better manage risk.

Skate.

Charts play a big part in my way of trading and I think that Skate has done a great job here describing what chart reading can do for you. Like all areas of trading knowledge there are varying levels of competence that can be reached and my advice for new traders is to aim to learn the basics in all areas and then depending on how you trade, progress further in areas that your trading style relies on more. An example of what I'm trying to say would be, in my case I rely heavily on charting so I have advanced my knowledge of it to a fairly high level but my fundamentals knowledge is at a basic level. In saying this, I want to be clear, whatever level of knowledge you have in any area of the markets, you must have a self awareness of the level that you are at and you must be competent at that level. So if your trading method only requires a basic level of knowledge in a particular area you still need to be good at using those basics.

One more thing that I think is so important that I'm starting a new paragraph to mention it. One of the most important ingredient in good chart reading is context, or the word that I like to use is environment. Fundamentals, chart reading, sentiment and Pro tricks don't live in isolation from each other, they all exist in the same environment that you are looking at on a chart.

I've made an attempt to convey the way that I look at things, I hope it is helpful for some.

 

[Captain_Chaza]

Charting / Technical Analysis is merely an Attempt to "Follow the Money"
All the rest is like a Dog's breakfast to me

I prefer a Skatie's type Mechanical /Automated approach where all the Palaver, Rubbish and Bull Dust are totally Ignored
"Garbage IN = Garbage Out"
Just " Follow the Money"

Bon Voyage and Stay Well

 

[farmerge]

Charting / Technical Analysis is merely an Attempt to "Follow the Money"
All the rest is like a Dog's breakfast to me

I prefer a Skatie's type Mechanical /Automated approach where all the Palaver, Rubbish and Bull Dust are totally Ignored
"Garbage IN = Garbage Out"
Just " Follow the Money"

Bon Voyage and Stay Well
View attachment 158118

Gee whiz Good cap't you and I actually agree on this.

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

38. How long have we left to live?
There are numerous aspects to consider while making trading decisions, such as age, risk tolerance, and financial aspirations. However, one key element that is sometimes forgotten is how much time we have left to live. With the average lifespan growing around the world, it is critical to plan for the prospect of a longer retirement.

Many individuals are now surviving well into their 80s, 90s, and beyond, which implies that if you plan to retire, you should think about trading or investing more actively to ensure that your funds survive at least another 30 years or more. Many people, however, misjudge their own longevity and fail to plan adequately. As a result, they may make overly cautious trading/investment decisions that fail to achieve the returns required to support a long retirement.

To avoid this circumstance, everyone must realistically plan for their own life expectancy. This includes not just our current age, but also our family history, lifestyle variables, and other pertinent elements that may influence our lifespan. We can better understand how long we are likely to live this way and plan our retirement accordingly.

In addition to planning for a longer retirement, consider more aggressive trading and investment strategies that can yield the returns required to sustain a longer retirement. This could simply mean taking on more risk with trading, investing in higher-yielding assets, or looking into new trading/investment opportunities with better growth potential.

Of course, the potential rewards of more aggressive trading or investment strategy must be balanced against the hazards involved. This entails being aware of our risk tolerance, diversifying our investments, and being ready to alter our trading or investment strategy as our personal circumstances change.

In conclusion, planning for our own life expectancy is an important but generally disregarded component in trading decisions. We can make better-informed trading decisions that offer the opportunity for long-term sustainability and success in retirement if we properly assess our own longevity and plan accordingly.

Skate.

 

[Skate]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

Let us recap so far
If you're new to trading, it's important to approach trading with caution and have a solid understanding of the basics. I've covered a variety of topics in the last 38 posts, including basic trading concepts, technical analysis, risk management, and trading psychology, with more to come in the coming months. So far, here are some major takeaways.

Research to educate yourself
Trading is a sophisticated and risky activity, and it is critical to conduct extensive study and education before trading or investing any money. Continuing to learn and expanding your knowledge will keep you in this game for longer.

Make a Trading Plan
A solid trading plan incorporates your goals, trading strategy, and risk management approaches to assist you in staying focused and avoiding reckless actions that ultimately lead to disappointment.

Begin small and use risk-management tools
Start small and progressively increase your trading size as you gain experience and confidence. To minimise trading risk and maximise returns, you need to have in place risk-control measures. These measures include a conditional buy filter, trailing stops, stale stops, position sizing, and a take-profit stop to give you a fighting chance of survival. Also, it's important to understand, the precise timing of the exit decides the "profitability" of the trade.

Maintain your patience and discipline
Trading is a tumultuous and volatile experience, resulting in unanticipated market shifts. It's critical to be patient and not let your emotions impact your decisions. Maintaining your trading approach and avoiding letting your emotions take over your decision process is a solid start.

Remember the Risk
Trading entails risk, there is always the possibility of losing money. However, by trading with discipline, following the suggestions provided, and the input from other members, you can help reduce risk and increase your chances of success in this trading game.

Skate.

 

[ducati916]

"Trading for Beginners - Skate's Practical Guide to Profitable Trading"
A daily series of posts aimed at those just starting out on their trading journey.

37. Chart reading
Traders can benefit from chart reading as it’s an effective method for providing useful insights into market trends, patterns, and other factors that may influence market behaviour. Traders can discover crucial levels of support and resistance, prospective trend changes, and other critical information that might affect their trading decisions by analysing charts every now and again.

However, keep in mind that price swings are driven by a complex mix of psychological variables and market fundamentals rather than being completely rational or logical. As a result, traders must be aware of the emotional components of trading and be able to read the signals provided by charts.

One of the most important advantages of chart reading is that it can assist traders in better understanding the story that the market is conveying. Traders can get insights into the underlying market dynamics and make informed decisions about when to buy, sell, or hold their positions by analysing charts and looking for patterns and trends. This is especially useful in turbulent or uncertain markets, where emotions can run high, and traders may be tempted to act rashly based on fear or greed.

Of course, chart reading is not a flawless strategy for anticipating market behaviour, and traders must always keep the hazards of trading in mind. It's critical to grasp market fundamentals, risk management strategies, and other critical aspects that can influence the success of your trading. Nonetheless, by incorporating chart reading into your trading approach, you can improve your ability to interpret market data and make sound decisions in the face of uncertainty and volatility.

In conclusion, chart reading is an important skill for any trader to learn. Traders can use this skill to develop a strategy by deciphering the signals provided by charts and understanding the story they hold. Traders can improve their chances of success in even the most difficult market conditions by understanding the market fluctuations to better manage risk.

Skate.

Charts: with indicators, without indicators. Using candlesticks or other. Timeframe.

All will make the exact same information appear radically different. For example a 1yr as opposed to a 5yr chart, sans indicators:



If your strategy was a pairs trade, the same information looks radically different. The difference is objective, not subjective. Can you identify why the objective difference is present? Do you even care?

Much chart analysis will be subjective. Subjective analysis is a guess. It is no different to a bet in the casino, apart from you hope your experienced guess carries a slightly higher probability than most casino odds provided.

Is chart reading an edge?

jog on
duc