How did you find a style that suited you?

[prawn_86]

With the plethora of different products and styles out there that can be profitable how is it that ASF members found a product and a style that suited themselves?

This question comes about due to me dabbling a bit in shorter term paper trading, and honestly i am almost overwhelmed by the magnitude of different approaches.

So is it best for someone just to keep trying different products and styles until they find something that suits them?

Or should they stick to one product and try out different styles?

And how does one find time to try these different styles?

Personally im trying a forex scalping method and sticking with my mid - long term stock investments.

I chose the scalping method (thanks Tayser) to trial due to the fact that it is based on only trading 1 - 2 hours a day.

 

[Timmy]

I'm going to speak from the first person, and only for myself. Instead of trying different products and styles until I found one that suited myself, I needed to recognise that what product to trade and what style to trade it in are intimately related to what it is I am trying to achieve.

Finding a product and style that suited myself was less important (but still of some importance nonetheless) than realising that once I knew what I wanted to achieve I needed to adapt myself to a new product and style. I also needed to trust that what I am doing is a sound and logical approach, and is adaptable to changing conditions in my market. This trust is extremely important to me.

I don't know you, but your decision to scalp FX seems very suited to what it is you are trying to achieve and the current constraints under which you are operating (1-2 hours per day). A good example I think.

 

[nizar]

I think time constraints is the main issue here for me.

I chose weekly trend following because it takes less than 1 hour a week to trade the method.

And now Im looking at scalping forex because the potential is there for full automation which means I can have all the benefits of intraday trading (more oppportunity, less exposure, smoother equity curve) with little or no ongoing time commitment required.

 

[Timmy]

I think time constraints is the main issue here for me.

I chose weekly trend following because it takes less than 1 hour a week to trade the method.

And now Im looking at scalping forex because the potential is there for full automation which means I can have all the benefits of intraday trading (more oppportunity, less exposure, smoother equity curve) with little or no ongoing time commitment required.

Great examples too Nizar.

 

[tayser]

I'm very much a practical learner, I need to have the tools right there infront of me to learn effectively. I can't just read books and do a simulation myself by 'writing down' my entry/exit points (I'm a test analyst, I break software for a living - I start pushing buttons before I read the manual and I like realism and paper trading just didn't work for me) - so I went looking for a stock demo platform that allowed you to buy/sell with X amount of fake money. I figured that the only cheap way to do it was wait for the ASX Game to start but even then the game time is limited.

So anyhow, I started looking at CFD platforms as I noticed they offered free demos... and stumbled upon Pacific Trader's Saxo Bank White label which integrated everything practically.

I fiddled with the CFDs originally but then started looking at FX. The fact that there's no exchange to constrain the times you can trade (as I work full-time) was probably the biggest selling point and also the favourable time zone for us - European opens are just when we finish the working day.

I didn't initially pick up on scalping when I first started looking at FX, I actually looked at various systems that are freely available on ForexFactory (Phil Nell's 4H which I think Apocolypto's trading now and TrendFollower which I will probably go back to eventually down the track), I initially applied GMMA's to my M1 currency charts and played around with them and tried to trade based on candlestick & MMA patterns - I still use them to an extent.

Scalping appeals because the theory behind it is that you do it for a specified period of time during the day, stop, then come back and do it all again during the day & compound your gains. And that fitted and still fits nicely with my current daily regime.

I reckon it is best to keep trying different instruments and styles (or systems) until you find something that suits - absolutely. You have to remember everyone who visits a forum like this is obviously looking to make money either to supplement their current income or to completely takeover as their primary source of income (I'm in this boat), therefore it's in your best interest to find something that suits. You just have to persist. I'm lucky to have found something relatively quickly (first started looking at the markets in January 2007) that I'm confident I can make work in the long-run.

 

[prawn_86]

Some good thoughts here guys.

I think one of my problems is that I am inquisitive and like to know a bit about everything. Like i would love to know in detail how to trade options, but i have only just started with Forex and I am still learning every day with stocks.

As others have mentioned it is mainly a time thing for me also. IE - having enough time to do what i do 'normally' (study), and have aenough time to learn new methods.

Its not a fast process.

Would be interested to hear thoughts of others who are profitable/trading full time and how and how long they took to find their niche...

 

[Andy_aus]

You have to remember everyone who visits a forum like this is obviously looking to make money either to supplement their current income or to completely takeover as their primary source of income (I'm in this boat)

I hear you buddy.

Im also in the scalping boat, the potential to make consistent daily income is appealing.

 

[IFocus]

If I started again...............many points already raised and I'll point out that you guys are miles ahead of where I was when starting you all never cease to impress....I was a slow learner but fast to make mistakes.

I started trading markets because I wanted to be rich, my 1st mistake

I became consistently profitable when I started trading for a income and focusing on the processors this may not have to be you but its what worked for me.

I would start by weighing up how much time I had and what period of the day I could allocate. When I started I spent to much time messing around on to many things and not focused on just one.

Pick a Mentor, market, time frame, instrument, method, trading platform that can be simulated

Mentor, having a mentor will be the single best thing you can do, place more effort on this than any other thing IMHO

Market, this to me is the 2nd most important after mentor. No point trying to learn to trade a market that is scramble eggs (like ASX stocks are now), learn and trade a market that many others are currently profitable in now, ideally some thing that is trending and having occasional expansion of volatility upwards.
Its critical you learn when not to trade when the conditions do not suit. My general belief is that its likely to be the market that generates your results rather than you.

I see plenty of examples on the forum of this. A good mentor will steer you towards this any way.


Time frame, many (myself included at the start often choose shorter TM based on perception of risk etc) no advice here other than what you can make fit with your time available.

BTW I choose my time frame now based on the market, the instrument,liquidity and the market condition not on how I feel or what suits my personality.

I make more from the two to five day time frame over all but thats not always the highest probability time frame based on my perception of the market condition.

Method, some thing that you must own, you will own it if you test it extensively, if you test it you can then see when it works and more importantly when it fails, by seeing what profits and losses look like and experiencing this through testing you are laying good foundations of trading psychology and will be developing properer trading behaviors.

Most miss this phase (I did and had to back track) generally learning the wrong behaviors you know missing stops, taking profits too early / to late etc.

Testing is some thing I notice you guys are mostly doing, this shows maturity in your selves generally and trading maturity that will serve you well over all.

Sorry for this being a bit convoluted.........and aahh mostly what you are already doing.....

Hope it helps

 

[Grinder]

prawn_86

My thinking was simmilar to yours for quite sometime. I dabbled with a variety of different instruments with success, but limmited interest till I recently discovered options. Im still a newbie to options with lots to learn, but I can honestly say I have found my niche. I am enthralled with the complexity of options and their strategies, hope this helps in discovering what trading suits you.

 

[theasxgorilla]

I think time constraints is the main issue here for me.

I chose weekly trend following because it takes less than 1 hour a week to trade the method.

Ditto.

Plus for me I've invested heavily in my profession and property and chose to be active in those spaces. I'm satisfied to let a trading account build slowly over time as a bolt-on to my property ventures and profession income.

 

[Rockhoundnz]

Mentor, having a mentor will be the single best thing you can do, place more effort on this than any other thing IMHO

Great advice, IFocus.

 

[ThingyMajiggy]

And how do you suggest we "find" a mentor? Anyone willing to put their hand up?

The biggest problem for me is trying to decide what style to use also, I just don't know, I have 3 days in a 5 day week that I can use for trading, all day on those 3 days. I tend to not have much patience, like I don't really find buying a stock and selling it in 5 years time interesting. I love technical analysis and like things to happen instantly, I know these things arent neccessarily possible, but I'm just saying how I feel. So I tend to lean towards day trading obviously, with 5M charts being what I have looked at most, no particular reason. Does this mean that I should concentrate on this? Somehow find a strategy to suit this or change myself to a strategy? I am very interested in FX too, I just don't know where to go from here, I also fancy candlestick charts more than bar charts, but then I tend to take candle patterns to seriously when I trade it but I think candles can work well in identifying what the market is doing.

So what do people suggest? I have read up about Elliot-Wave theory too, but it seems like there are always so many possibilities to choose from when trying to find out what the market is doing, then by the time you have noticed it, you have already wasted half your profit potential. To be honest, the most success I have had testing is with a multiple MA crossover system, but then I read everywhere that its the usual beginner lame thing to do, have a typical MA crossover. So no matter what I look into or try and do, theres always something saying NO! DONT DO THAT! THATS STUPID!

So...do I just say stuff it, THIS is what I want to do, and just go for whatever suits me best? Seeings thats what I read in most trading books, is to go for something that suits you.

Anyhow, thats my rant Sorry for being stupid, just had to get it off my chest.

Cheers,
Sam.

 

[stargazer]

Hi all

Interesting reading and have also become undecided. The more i read and think mmm this may be it, someone comes along and gives one a million reasons why you shouldn't do it.

For years i resisted entering the stockmarket till a couple of years ago i decided too. The pundits said BUY and HOLD and all will be fine. Ignore the dips etc.

Well needless to have to say the market is not in good shape and the BUY and HOLD certainly has left me significantly down. If i had bought a car the depreciation would not have been as bad. So lingering is my portfolio and slowly selling off stocks that have broken even or profit. The rest i am waiting.

I also see the usual responses Get a Mentor read books educate yourself etc.

I am one of those people that have to be shown on a computer to get the best out of myself thats just me. All i need is to sit down with someone and they say this is where you go to look for the information and this is what you should look out for, thats it seems simple doesn't it. Well i am sorry to say it would be easier to pick up marbles with my butt cheeks than finding someone to do this. Also the comments like you have just come from the dark ages because you don't understand certain stock market lingo.

So why am i looking at the stock market? simple reallly i am scared of retirement my super won't cut it and my income just won't suffice. So what do i want. Simple really find something that suits me that derives income.

What did i come up with.. So far with my limited knowledge COVERED CALLS. This also had its draw backs if the price of the stock dropped. Still feel with some research and entering at an appropriate level it could work.

There seems to be a myriad of ways though Forex/futures/scalping/ eminis/cfds etc all which come with the tag as Extremely risky and stay away.

Anyone with any suggestions re: Income if theres a better way than covered calls on the lower side of risk really like to hear of it.

I also think this is why vulnrability comes into it when those that try and sell $$$$$$ courses start to hound you as it sounds so good. So far i have resisted.

Cheers
SG

 

[Julia]

Well needless to have to say the market is not in good shape and the BUY and HOLD certainly has left me significantly down. If i had bought a car the depreciation would not have been as bad.

]
No, but the car has no chance of returning to and exceeding its purchase price (unless it's a vintage model), whereas obviously if you have bought into quality companies they will come back to value eventually.

 

[stargazer]

Hi Julia

Yes thanks i am aware of that it was a bit of tongue and cheek but certainly up to this point the car would've been better..lol.

However on a serious note i have never seen it this bad, even though i have not been a participant in the stock market in the yester years i have taken a curious look over the years, i have never seen it this bad.

We have seen the sub prime/opes/lift partners and the probability of more bad news to come out of the states and who knows where else. There is also world tensions, the China factor etc Just seems to be body blow after body blow at this point. I reckon this is a market for the experienced now and not the learners unless they have plentyof dosh and don't mind a loss.

I am sure there is opportunity if you have the knowledge.

cheers
SG