Serious newbie wanting to learn

[jjbinks]

Thanks @jjbinks for your feedback. I had a flip through unholy Grails at the book store, do you need software to put it into action?

Also how do I find Peter2's Trade Book? You're right there is so much great information on here it will take awhile to sift through it. Appreciate the direction.

Cheers

Re holygrails
You need amibroker and access to norgate premium data to test mentioned strategies. Both of which you can get a free trial for to test first if you plan to.

Re peter2 tradebook
https://www.aussiestockforums.com/threads/asx-momentum-trade-book-part-2.29971/

 

[Modest]

I really got a lot from reading Tom William's Undeclared Secrets of the Stockmarket book (do not let the title put you off) I've read this book start to finish about 4 times.

 

[Valued]

I really got a lot from reading Tom William's Undeclared Secrets of the Stockmarket book (do not let the title put you off) I've read this book start to finish about 4 times.

I prefer Anna Coulling to Tom Williams. Anna actually went to one of Tom's courses back in the 90s and she said it was kind of a scam but it set her on a path of learning about volume (but she is more forex orientated). I ended up sending her an email about it but I am too lazy to dig it up. She didn't really know Tom Williams well though since it was another guy who did a lot of it but Tom was introduced as a "syndicate trader" but she still doesn't know what a syndicate trader is. Volume analysis is ok, has its uses I think. Perhaps questionable sometimes and it should be read in context. I like the effort vs result type analysis though since it makes me think about why something may have happened. I think now though volume has to be read in context and that using volume on a candle per candle basis is probably bad.

I am not so sure about the whole accumulation and distribution theory on daily timeframes or higher. In reality, hedge funds are taking positions opposite to each other all the time. Big players are constantly trading against each other in forex markets too. It's also really expensive to be wrong in huge market with huge liquidity because if the "smart money" invests that much to take the price where they want it they can end up being wrong in a big way and losing tonnes. They have to limit their risk and this limits their ability to conduct the operations that the "smart money" is accused of, especially in forex and futures. It is possible in smaller stocks though. Fundamentals can provide an element of unpredictability and I think this restrains the manipulation that can occur on the longer time frames. Maybe it's possible on the hourly chart but I think it's unrealistic on the longer time frames for accumulation and distribution to occur where it is the smart money vs the retail traders.

The above doesn't count though to the actions of governments/central banks in forex. That's another kettle of fish but they arn't accumulating and distributing in accordance with this "smart money" theory.

 

[NewbieTrader1982]

I really got a lot from reading Tom William's Undeclared Secrets of the Stockmarket book (do not let the title put you off) I've read this book start to finish about 4 times.

Thanks @Modest. Do you use VSA so help you with your system? Have you found a system over time that works for you consistently?

Thanks again

 

[NewbieTrader1982]

I prefer Anna Coulling to Tom Williams. Anna actually went to one of Tom's courses back in the 90s and she said it was kind of a scam .

Hi Valued, can you elaborate a little more What do you mean by 'kind of a scam' ?

Thanks

Also ordered a few days ago Anna Coulling's book on "the complete guide to VSA".

Thanks

 

[Modest]

Thanks @Modest. Do you use VSA so help you with your system? Have you found a system over time that works for you consistently?

Thanks again

Yes I still use it today as a point of information to help me with decision making, it is a one data point out of many that I take into consideration though. I am more of a swing trader and look for 20+ tick moves so for me context is very important. Context is a strange thing - the experienced members spoke of this in my early days I never quite understood it until I devoted many hundreds of hours of screen time.

There are traders who trade VSA mostly with great success, @captain black is one such trader who trades for a living and is almost completely automated. If you want to go down that route check out his recent thread where he shares his setups - great thread.

Other concepts that I use:
- Wyckoff - at the core of my trading

-Support & Resistance - Exists on every single time frame learn to see it figure out its a dynamic concept (Prior R turns to S and Prior S turns to R)

Price action - no this is not Japanese candlestick patterns in isolation don't fall for that trap

-Supply and Demand - always be asking yourself where are the stacked orders (I'm not talking about DOM)? Watch a bunch of Sam Sniden videos on supply and demand they're ok no need to buy his service as he covers all the basics in his freely available material

Goodluck

 

[NewbieTrader1982]

Yes I still use it today as a point of information to help me with decision making, it is a one data point out of many that I take into consideration though. I am more of a swing trader and look for 20+ tick moves so for me context is very important. Context is a strange thing - the experienced members spoke of this in my early days I never quite understood it until I devoted many hundreds of hours of screen time.

There are traders who trade VSA mostly with great success, @captain black is one such trader who trades for a living and is almost completely automated. If you want to go down that route check out his recent thread where he shares his setups - great thread.

Other concepts that I use:
- Wyckoff - at the core of my trading

-Support & Resistance - Exists on every single time frame learn to see it figure out its a dynamic concept (Prior R turns to S and Prior S turns to R)

Price action - no this is not Japanese candlestick patterns in isolation don't fall for that trap

-Supply and Demand - always be asking yourself where are the stacked orders (I'm not talking about DOM)? Watch a bunch of Sam Sniden videos on supply and demand they're ok no need to buy his service as he covers all the basics in his freely available material

Goodluck

Great help and further direction. I will check it out. Nick Radge has a simple strategy on his website re swing trading which used the ABC formation, RSI or similar below 20 and a tight bar to indicate a buy singal for a reversal of trend back up. This is also assuming the greater trend is also going long. Very simple and seems to work many times when I eye ball them. Also using a risk/reward ratio of 3 to 1 otherwise he says don't take the trade. He says its a very conservative method but hes ben trading it for 20 years. Just wondering if its a good newbie pattern to start, if there is such a thing...?

I think I have heaps of good material and direction now. @tech/a has also been very generous with his time to me here and off forum. This is really a great place to learn.

My plan is to
1. Read the materials everyone has already recommended.
2. Look at charts to just to familiarise my eyes/brain to a chart.. even if I don't know what I'm seeing.
3. Follow some of the great threads on the forum to learn more
4. Post questions as I read and may need clarification on some things
5. Hopefully after all that I will have some idea of a system/method that may suit my needs/goals/personality
6. Start trading it (don't know when that will be ). Its very easy for me to start trading right now with an account but it would be purely gambling at this point.


Also I have started a journal to document my journey. I actually find this journey quite a relaxation for my mind from real estate which is a nice feeling I am coming to realise


Does my plan sound reasonable?

 

[tech/a]

As good as any.

 

[Trembling Hand]

Just wondering if its a good newbie pattern to start, if there is such a thing...

No there is totally not a thing. T/A doesn't work. Just the same as an uppercut in a pub fight doesn't 'work' or a 60 meter kick in AFL doesn't work. Petrov's Defense in chess doesn't work. A flanking maneuver doesn't work in battle. They all depend on context. Do it at the wrong time and your enemy will have you for breakfast. In trading if you are new and you can see it it's because its a robe a dope move (that always works).

 

[Valued]

A newbie signal loses money since you trade it and make mistakes. Take a candle pattern like a bullish engulfing candle. You can make money trading that or you can lose money trading it, depending on the trades you take. The trade isn't so much about the engulfing candle. It's about the wider context but an engulfing candle or just any strong looking up bar on reasonable volume may be a good sign to enter. Keep in mind this is different depending on time frames. I do not trade under the 4 hour chart and I trade extremely liquid markets, mostly forex and sometimes index futures and so the "traps" are a bit different. I would likely be terrible trying to trade the 15 minute dax the way I would trade 4 hour AUDUSD. The reason I say this is that the engulfing candle I am talking about well maybe that works on some time frames in some contexts in some markets but then the pattern isn't so much the engulfing candle, that's just an entry signal and it's not because it is engulfing but because it is telling me something about supply and demand in a certain context. If you just trade an engulfing candle you will lose money.

I also consider broader market fundamentals though so I take trades that tend to make some sense, especially on my higher time frames and so if you know the S&P 500 has to go up due to the broader macroeconomic context then if you see a signal to short you might not want to take that.

 

[NewbieTrader1982]

From the advice I am hearing, it doesn't matter what system/approach you use, context is very important. When you say context are you talking about what else is happening/happened in the scenario and not just looking at a signal in isolation? Correct?

Thanks

 

[Triathlete]

From the advice I am hearing, it doesn't matter what system/approach you use, context is very important. When you say context are you talking about what else is happening/happened in the scenario and not just looking at a signal in isolation? Correct?

Thanks

Trading in the right context can make a huge difference. Being able to understand the market context in which you are making trading decisions can help you filter out potentially troublesome trades and enable you to get into high probability trades more often.

 

[tech/a]

From the advice I am hearing, it doesn't matter what system/approach you use, context is very important. When you say context are you talking about what else is happening/happened in the scenario and not just looking at a signal in isolation? Correct?

Thanks

Yes

 

[NewbieTrader1982]

I have been thinking about about the Money Management side of it. I guess even if you took any 'system' or 'pattern', only traded set ups that had a risk/reward of at least 3 to 1 and kept the percentage trading each trade to be exactly the same or very similar.. then you would have a very good chance to come out ahead even if you lost the majority of trades provided the pattern you chose and executed was half decent while using a 3 or greater to 1 risk/reward.

Does that make sense...? And IF that is true, then people who want to waste money on roulette.. would be much, much better to 'gamble' in this way, at least the odds are in their favour.. no?

 

[galumay]

much better to 'gamble' in this way, at least the odds are in their favour.. no?

Think about that....if the odds were truly in your favour then you couldn't lose in the long run. If such a 'system' existed we would all be using it, and all be getting rich.

 

[NewbieTrader1982]

Think about that....if the odds were truly in your favour then you couldn't lose in the long run. If such a 'system' existed we would all be using it, and all be getting rich.

hmm.. but even a great system needs to be implemented by people with different mindsets, emotions, discipline etc etc. Surely that would have to impact results..Its like real estate, there are great ways to make money and get an edge in the market yet most never do it. Doesn't necessarily mean there isn't a way or even if you give 100 ppl 'the way', their own mindsets will often screw it up. I am a total newbie in trading so i am not sure if my thinking is true for trading, but i know its definitely true in real estate.

Also, if we truely would never be able to get the 'odds' in our favour by trading somewhat predictable pattens and overall have consistent profits in the longer terms... then why are we all here...

Appreciate your feedback mate.

 

[galumay]

Also, if we truely would never be able to get the 'odds' in our favour by trading somewhat predictable pattens and overall have consistent profits in the longer terms... then why are we all here...

Well not all of us believe you can - I guess thats why many of us are not traders! Anyway, i dont want to drag your thread off topic, and my contributions will not be constructive! Lets just leave it with my off the cuff comment about what would really happen if the odds were in your favour!

 

[Trembling Hand]

I guess even if you took any 'system' or 'pattern', only traded set ups that had a risk/reward of at least 3 to 1

That sounds simple and common sense enough. In practise a 3:1 ratio and a pattern or system that is always present in markets is as common as rocking horse turds.

 

[barney]

..Its like real estate, there are great ways to make money and get an edge in the market yet most never do it.

Innovation .... seeing patterns that are not "obvious" to the mainstream .... having the ballz to back your gut against the crowd ...... familiar parallels in any successful venture in life I'd suggest ....

Whether real estate, trading, or anything else, you seem to have the right mindset for success in my opinion ...... the value of my opinion of course may be debatable.

 

[tech/a]

You'll find that the simplest and most logical ideas eventually appear complicated and anything but logical.

This simple truism will demonstrate what I mean.

There are only 3 ways to make money in the markets ( other than arbitrage )
(1) Win more often than you lose with accumulated wins more than losses.
(2) Have far bigger wins than losses.
(3) A combination of both.

No way in time you'll realise that there is far more to achieving any of these than buying a pattern or trading a system.

Just when you think you " Get it " it will vapourise.
Take your time
Question everything