Trading full time - what do you think will happen?

[tech/a]

TH

If your trading say the SPI or the HSI
Thats equivalent to one stock.

I dont think Jerseys idea "sucks".
But I do think he has a long way to go and an un realistic capital base.
Selectively trading Radges "power setups" well Nick answered that.

There are good traders who trade very limited number of stocks.
Mind you I dont know of anyone trading 1.
To say you'd go broke doing so could be wrong and could be right.

If you had the capacity to trade it short as well then I'd say traded in a professional manner he could be profitable.

 

[Trembling Hand]

If your trading say the SPI or the HSI
Thats equivalent to one stock.

I dont think Jerseys idea "sucks".
But I do think he has a long way to go and an un realistic capital base.
Selectively trading Radges "power setups" well Nick answered that.

Jersey is saying that he will have ALL his capital on 1 stock. How the hell is that going to work with correct money management rules. That is what I am saying is wrong. 1 at a time with 20% of your capital would be fine. But 1 at a time ALL in is wrong.

 

[jersey10]

Yeah the ones Newbies sign up for that cost them $10,000

max loss per trade would be 2% i.e $800

so 6 /10 winning trades over the long term is not realistic is that what you are saying?

current paper trade bought 250 BHP on 8th April for $41.08

 

[professor_frink]

max loss per trade would be 2% i.e $800

so 6 /10 winning trades over the long term is not realistic is that what you are saying?

current paper trade bought 250 BHP on 8th April for $41.08

I'm pretty well a rank amateur, but have been punting for a few years now and don't come close to 60% winners. My trading is pretty well a 50/50 proposition. I don't think there would be too many traders out there that will have generated much over 60% winners over a number of years of trading

 

[Nick Radge]

My personal trading is currently running at 39% winners. My account is +22% over the last 3 weeks. My job is to be a manager of bad trades. Nothing more. Manage the bad ones swiftly and the good ones will look after you if you make yourself available for it.

 

[njc.corp]

max loss per trade would be 2% i.e $800

so 6 /10 winning trades over the long term is not realistic is that what you are saying?

current paper trade bought 250 BHP on 8th April for $41.08

Jersey-lets take it back to basics has it all comes to u in what ever u do-

If u invested 10 k for example-what return would put a smile on your face-

be honest-

Nick--

 

[Magdoran]

Making MORE time to look at charts when your new is an absolute trap... one of the first things I was told when I started was "don't spend too much time looking at the charts, it will send you nuts"

Of course I paid no attention at the time and probably spent atleast 5-6 hours a day trawling through charts for months looking for one thing or another...sounds like you'll end up doing much the same thing and I can say from experience it really gets you nowhere.

I take issue with the concept that looking at lots of charts is necessarily a waste of time. This is potentially a misleading perspective. While I agree that moving immediately into full time trading as a newbie using charts as the primary analysis is problematic, the idea that spending as much time as possible studying charts (effectively) “really gets you nowhere” has to be challenged. I know the author may or may not have had this idea in mind at the time, but it could be construed this way.

The point I'm making is that if you determine that charting is going to be your main source of analysis for trading (as opposed to fundamental analysis for example), I'd strongly argue that many traders have benefited from applying themselves to effective study of markets using a charting style (there are numerous approaches in the world, not to mention on ASF – just look through the various debates on charting interpretations and the different approaches and schools over the past few years on this site).

What I've found is the McLaren approach to trading is to study those charts day in day out. This is the only way you can truly learn how markets move. Essentially you really need years of effective study to master key aspects of how to interpret markets to improve your chances of success. This means studying charts every day for as many hours as you can, consistently. But you need to be studying the right things. Watching ticks is not what I'm talking about. I'm talking about really studying markets (I've posted numerous times on this subject on this site to support this assertion).

But to go full time and trade as a newbie isn't what is being suggested here. A full time trader really should be well versed in all the key things I've talked about over the years on this site, hence newbies really should consider getting the understanding under their belt first, or accept you aren't going to trade major capital while you learn. $40 K is problematic to start from, but if the individual really has a gift in the minority of cases, then fine this can be the make or break moment – but you really need to have your eyes open to make this kind of decision.

Of course just because you study something doesn't mean you're going to succeed at it. Trembling Hand's concept is worthwhile – essentially people thinking they can automatically become a Wimbledon champion because they practice with a coach.

However, remember some people do have a gift and succeed at their chosen vocation, but it's often the minority. A thing to remember is that if you don't try, you will never know – the other side of the “wisdom coin” is that you need to know when you don't have it – not an easy area to draw simple conclusions from because you're dealing with people, and some people you least suspect can do extraordinary things, and then there are the nutters you see on Idol that will never get there.

So I'd agree with the notion that charging at the cannons is probably suicidal, but I'd also say “study those charts” (effectively).


Regards

Magdoran
(The “long lost”)
P.S. Hi Guys - hope everyone is well! I found a modicum of time to quickly scan the ASF and found the "Gem" above and had to comment! Mag

 

[jersey10]

Jersey-lets take it back to basics has it all comes to u in what ever u do-

If u invested 10 k for example-what return would put a smile on your face-

be honest-

Nick--

Don't really understand the question.

I would like to make 50% over 12 months on $40 000 while i continue to learn. Some people have said this is unrealistic. I have stated i am following the recommendations on the chartist. Nick has just replied that his account is up 22% in 3 weeks and i believe he trades what he recommends on the chartist.

Jersey10

 

[Timmy]

jersey, you have started a couple of great threads, this being one of them. There is a lot of information on the threads you have started, and a lot of information on other threads also.

Trembling Hand has been pretty blunt with his replies ... I believe this a good thing as he has honed in on some core issues that if you do not understand and address you will lose your money very, very quickly in the market, and also severely restrict your opportunities for making money. Please forgive me as I am about to be blunt as well. You do not seem to have much of a grasp on the basics of what it is you want to get into.

By basics I mean risk management. You seem to have no idea about risk management. It is not just about setting stops (though this is very important). Before you do another thing you need to read Trade Your Way to Financial Freedom by Van Tharp, or at the very least the first few chapters (I will dig it out and point you to what chapters to read if you are interested). Contrary to the title it is not a claptrap self-help book. The first 50-odd pages of Adaptive Analysis by Nick Radge is also essential. I know you said these are on your list to read, but you need to read them now, before doing another thing.

 

[jersey10]

jersey, you have started a couple of great threads, this being one of them. There is a lot of information on the threads you have started, and a lot of information on other threads also.

Trembling Hand has been pretty blunt with his replies ... I believe this a good thing as he has honed in on some core issues that if you do not understand and address you will lose your money very, very quickly in the market, and also severely restrict your opportunities for making money. Please forgive me as I am about to be blunt as well. You do not seem to have much of a grasp on the basics of what it is you want to get into.

By basics I mean risk management. You seem to have no idea about risk management. It is not just about setting stops (though this is very important). Before you do another thing you need to read Trade Your Way to Financial Freedom by Van Tharp, or at the very least the first few chapters (I will dig it out and point you to what chapters to read if you are interested). Contrary to the title it is not a claptrap self-help book. The first 50-odd pages of Adaptive Analysis by Nick Radge is also essential.

Hi Timmy,

I don't mind blunt criticism or kindly-worded criticism as long as it helps me to become more educated and ultimately increases the chance that i will be successful in achieving my long term goal of becoming a full time trader. TH has been very helpful in this regard as have many others in this thread and previous threads. I just hope these guys continue to respond to my threads as i continue to post. Thanks for your comment, i am looking at Van Tharp's book on my bookshelf now. I started reading it over Christmas but only got about 20 or so pages in. I might put Reminiscences of a Stock Operator on hold and read Van Tharp this afternoon. What section in particular are you referring to?

Jersey10

 

[Timmy]

The most important parts of the book (IMHO) are his ideas and models on risk control. The parts of the book about designing entry triggers, exit triggers etc., are, in my opinion, not so useful, & can be read later. Also, some of the book is complex and can be safely left for later.

Read chapter 7 first (Six Keys to a Great Trading System)
Chapter 10: Knowing When to Fold'em...

Then chapters 2, 3 and 4.

This is all presupposing that you will, eventually, read the whole thing.


Reading Adaptive Analysis (first 50 pages) is going to shed a lot of light onto the subject too.

 

[RichKid]

Hello Jersey

Thank you for being so forthright in your posts. I'm sure many newbies see something of themselves in you. They will benefit from the responses of the more experienced traders to your queries.

This is one of the many threads discussing Van Tharp, remember to use the 'search' tool to locate other threads of interest https://www.aussiestockforums.com/forums/showthread.php?p=6030#post6030

The Admin Forum has some threads on making the best of ASF's tools.

There is a thread dedicated to Radge's Adaptive Analysis as well.

 

[njc.corp]

don't really understand the question.

I would like to make 50% over 12 months on $40 000 while i continue to learn. Some people have said this is unrealistic. I have stated i am following the recommendations on the chartist. Nick has just replied that his account is up 22% in 3 weeks and i believe he trades what he recommends on the chartist.

Jersey10

your right that was ? so 50% is what u want-fair enough-

some people have said thats unrealistic and some say thats easy-its just people's views-

i have happy with 15-25 % but thats me-

Nick--

 

[julius]

I take issue with the concept that looking at lots of charts is necessarily a waste of time. This is potentially a misleading perspective. While I agree that moving immediately into full time trading as a newbie using charts as the primary analysis is problematic, the idea that spending as much time as possible studying charts (effectively) “really gets you nowhere” has to be challenged. I know the author may or may not have had this idea in mind at the time, but it could be construed this way.

The point I'm making is that if you determine that charting is going to be your main source of analysis for trading (as opposed to fundamental analysis for example), I'd strongly argue that many traders have benefited from applying themselves to effective study of markets using a charting style (there are numerous approaches in the world, not to mention on ASF – just look through the various debates on charting interpretations and the different approaches and schools over the past few years on this site).

What I've found is the McLaren approach to trading is to study those charts day in day out. This is the only way you can truly learn how markets move. Essentially you really need years of effective study to master key aspects of how to interpret markets to improve your chances of success. This means studying charts every day for as many hours as you can, consistently. But you need to be studying the right things. Watching ticks is not what I'm talking about. I'm talking about really studying markets (I've posted numerous times on this subject on this site to support this assertion).

But to go full time and trade as a newbie isn't what is being suggested here. A full time trader really should be well versed in all the key things I've talked about over the years on this site, hence newbies really should consider getting the understanding under their belt first, or accept you aren't going to trade major capital while you learn. $40 K is problematic to start from, but if the individual really has a gift in the minority of cases, then fine this can be the make or break moment – but you really need to have your eyes open to make this kind of decision.

Of course just because you study something doesn't mean you're going to succeed at it. Trembling Hand's concept is worthwhile – essentially people thinking they can automatically become a Wimbledon champion because they practice with a coach.

However, remember some people do have a gift and succeed at their chosen vocation, but it's often the minority. A thing to remember is that if you don't try, you will never know – the other side of the “wisdom coin” is that you need to know when you don't have it – not an easy area to draw simple conclusions from because you're dealing with people, and some people you least suspect can do extraordinary things, and then there are the nutters you see on Idol that will never get there.

So I'd agree with the notion that charging at the cannons is probably suicidal, but I'd also say “study those charts” (effectively).


Regards

Magdoran
(The “long lost”)
P.S. Hi Guys - hope everyone is well! I found a modicum of time to quickly scan the ASF and found the "Gem" above and had to comment! Mag

So what does someone like Jersey do? He takes the extra day off work and starts by devoting himself to perfecting Radge's power setups, applying every kind of technical tool in the hope that he can increase his winning percentage... You could lecture the beginner about risk:reward etc. until your blue in the face but it wont make the slightest difference because 'accuracy' is naturally attractive, it's the bad habit almost everyone starts with.

Becoming a good trader isn't about the hours under the belt, it's about conditioning over time - weeks, months, years etc. Whats the best thing a novice can do after a successful trade? Get the hell off the computer right away because the chances are you'll give your profits right back.

Theory has rapidly diminishing returns, in my opinion your best off knowing only enough to understand your trades and not much more. ie. principle of parsimony

I don't think it's 'knowledge' that lets people down when they start trading, it's the self sabotage - putting all the account into one of the setups for example... Jersey has started with a proven method and a reasonable amount of capital to implement it, at this point the only thing left to do is not f*ck it up! :

 

[Whiskers]

I take issue with the concept that looking at lots of charts is necessarily a waste of time. This is potentially a misleading perspective. While I agree that moving immediately into full time trading as a newbie using charts as the primary analysis is problematic, the idea that spending as much time as possible studying charts (effectively) “really gets you nowhere” has to be challenged.

The point I highlighted in magdorans post... studying charts effectively, is so important not just to save huge amounts of time pondering over them, but to be quickly able (more intuitively) to interpret what they are saying.

It seems to be a pretty common failing of people reading charts not to look at the longer trend/position before pondering too much over the short term daily/hourly/minutes charts.

I have adapted a style that suits my personality, better referred to as social style. I essentially base my strategy on fundamental analysis, but I use chart analysis to time entry and exits of my trades.

I typically glance at hourly/daily charts to see where my trade/potential trade is right now, then revert to weekly and ocassionally monthly charts to determine the medium and longer term trend/prospects before I revert back to hourly/daily for a more thorough analysis before making a move.

I think regardless of which charting you use, the key point is to know (understand thoroughly) exactly what you are looking for, then it becomes more intuitive in so far as you get an instant mental picture of what is most likely going to happen based on strong correlations of the data in the charts with fundamental analysis.

 

[Magdoran]

So what does someone like Jersey do? He takes the extra day off work and starts by devoting himself to perfecting Radge's power setups, applying every kind of technical tool in the hope that he can increase his winning percentage... You could lecture the beginner about risk:reward etc. until your blue in the face but it wont make the slightest difference because 'accuracy' is naturally attractive, it's the bad habit almost everyone starts with.

Becoming a good trader isn't about the hours under the belt, it's about conditioning over time - weeks, months, years etc. Whats the best thing a novice can do after a successful trade? Get the hell off the computer right away because the chances are you'll give your profits right back.

Theory has rapidly diminishing returns, in my opinion your best off knowing only enough to understand your trades and not much more. ie. principle of parsimony

I don't think it's 'knowledge' that lets people down when they start trading, it's the self sabotage - putting all the account into one of the setups for example... Jersey has started with a proven method and a reasonable amount of capital to implement it, at this point the only thing left to do is not f*ck it up! :

julius:

Indeed, and this is the crux of where you and I differ. While I can see the merit in the concept of occam's razor in some situations, there are alternative ways of thinking about anything, and in particular markets. I do not agree that simplicity is the panacea. It has it's place, but trading markets in my view is a very involved area. In fact I'd say it's one of the hardest games anyone can attempt.

So, I patently do not agree with your perspectives at all, but I respect your right to think as you do. What I will do is to take issue with sweeping statements like the ones you have asserted as if they are absolute truths. They are not, and I'm saying they are not. I'm also saying now that you need to be more careful about making statements that influence others.

Here's where you and I have polar opposite perspectives: I do think that acquiring and applying the right theory can yield significant returns, and that it usually takes many hours to achieve the depth of understanding to succeed consistently. I do think that consistent accuracy is achievable, and have both done it and see it done by others in real markets.

I also don't think you fully understand my perspective. I clearly said that watching ticks was not what I'm talking about, and your comment put this straw man up anyway. I was talking about studying markets. Studying the way markets trend through charts, a very different proposition which you conveniently omit to address.

You ask what should jersey do? Simple, he's asking questions to try to work out how to proceed. You've made an assumption that he will not succeed by becoming a full time trader, and have assumed that spending time looking at charts and studying them “is a waste of time”. That may well be true, but what if it isn't? What if Jersey is the next Robert Prechter or George Soros? I think jersey should continue to ask questions and think his future moves through very carefully, and leverage the significant body of knowledge that is available, especially from the ASF repository of knowledge.

How do you know what he's really capable of? Maybe by spending focused time his learning will be accelerated, and even though he doesn't succeed the first time, he comes back later in life leveraging those experiences to succeed in the end at a later point. How do you know what's going to happen? While this may seem unlikely from his comments, it is not our place to rule out choices for him, or mislead him, as you are doing intellectually without acknowledging your bias. If however you took the time to give a balanced appraisal, we wouldn't be having this polemic.

Also, you are obviously ignorant of the body of the work I have posted for you to again make such sweeping statements as this “gem”: “...'accuracy' is naturally attractive, it's the bad habit almost everyone starts with.” Oh really? Respectfully, I think this is more a testimony to your capabilities and abilities to read charts than it is an absolute truth. I beg to differ, and I cite the body of my work on this site as evidence of the opposite conclusion.

I don't think it's 'knowledge' that lets people down when they start trading, it's the self sabotage

And again a sweeping statement of pure ignorance of my long running commentary about psychology being the number one aspect to successful trading. I don't know how many times I have answered the kind of questions jersey is raising. Julius, I have no problem with you raising cautionary notes. I applaud that. What I have a problem with is you making sweeping and potentially misleading statements, and I take seriously tearing down this kind of sophistry wherever I see it.

 

[Timmy]

It seems to be a pretty common failing of people reading charts not to look at the longer trend/position before pondering too much over the short term daily/hourly/minutes charts.

Are you stalking me?

 

[Porper]

40% - 45% winning trades seems low

Your winning amount of trades has little impact on profits on its own.40-45% win rate would be very low for somebody with a strategy of buy and hold, conversely for somebody like myself who operates with very tight stops 40-45% would be great.It all depends on your preference, most people feel more comfortable with a higher win rate, however this means that your win/loss ratio will be lower.

So the way people make money is not from getting the trades correct in the first place but moreso getting big returns when they are right and getting out with minimal losses (e.g. 2% when they are wrong).

You have the right idea here, let the winners run and cut your losses.

 

[prawn_86]

Personally i think it is hugely niave to think that you will make anywhere 50% if it is your first attempt at trading, especially if you are still learning as you say you are.

If you are still at a learning stage I would be prepared not to make anything for AT LEAST a year and maybe even go backwards a little as you learn.

In fact i will create another thread with a poll to see how long it took most traders to be constantly profitable...

 

[njc.corp]

Personally i think it is hugely niave to think that you will make anywhere 50% if it is your first attempt at trading, especially if you are still learning as you say you are.

If you are still at a learning stage I would be prepared not to make anything for AT LEAST a year and maybe even go backwards a little as you learn.

In fact i will create another thread with a poll to see how long it took most traders to be constantly profitable...

a poll would be good-

Thanks

Nick--