Why is it so hard?

[Rainmaker2000]

Agree with those above, specially advocating the knowledge route.....

You want income, you need to get to the basics.....buying stock is about buying part of a living, breathing business....you need to be just happy with the income that business is generating for you...that is EPS and DPS.......and that's it....how to buy a good business for a good price? That's what its about.

The great one's like Buffet, Graham could not care less whether the actual stock market exists because they are business owners...

The rest of it like buying and selling for capital gain....and derivatives like Options, CFDs........this stuff all is derived from the underlying business.....these things are for people in a hurry and it sounds like you are in a hurry

Right now is the worst stock market time since maybe 1987 for people in a hurry....leverage is getting more and more disadvantageous........fundamental are king

 

[freddy2]

You can use all the mumbo jumbo you want but in the end if you are going to trade you must have a mathematical advantage plus adequate capital to handle the fluctuations.

IMO a good book to read is "Fortunes Formula" and the parts about Edward Thorp (who by the way invented blackjack card counting and independently derived the Black/Scholes option formula years before almost anyone else). Then realise you will be competing with these sort of people (IQ > 150 + knowledge/education) when you trade. And that is not to say that being smart is enough as if you have the wrong models (eg Long Term Capital Managment) you will go bust too. Like I said before concentrate at what you are good at (eg electrician, doctor, whatever) and invest whatever income in a low fee index fund. It's probably not what you want to hear and it's not as much "fun" but in the end you will be better off.

 

[Bill M]

trtkjd1, Rainmaker2000 and freddy2 your posts are right on the mark, fully agree with you all. I've seen the lot, from crashes, recessions, bear markets, wars, Asian financial crisis, Mexican Peso Crisis, terrorist attacks and now the sub prime mess. The thing about all these previous crises is that we all pulled through and so did most of the companies.

People have short memories, remember when Westpac nearly went broke in the early 90's you could have bought them for $3 a piece. Lets not forget QBE at $4.50 straight after the 9/11 attacks. There was AMP and nobody wanted to touch them at $3.80. Then there was Telstra as well (only about 14 Months ago), it was dog, it was going downhill and nobody wanted them for $3.40. In the end all of these companies survived. Long term investing in good quality companies is definitely the way to go. Sharemarkets around the world have been going up and down for centuries but they always pass their previous highs. Look at my signature for my final note, good luck with your investments.

 

[nizar]

In conventional trading you need a trend to make a profit in one direction---that which your trading. Not talking options.

That trend can be 1 bar.

I used to think that markets can head in 3 directions:
1/ Up
2/ Down
3/ Sideways.


It is just recently that I have found that markets ALWAYS trend (up or down).

Its just that sometimes you have to look into smaller timeframes to identify them, and then all of a sudden, what looked like "noise" is actually some very nice trends.

TH.
I like what you said here:

That is probably why its so dam hard. Newbies want to be right. Experienced traders want opportunities to be proven wrong or right.

And this is worth repeating:
To be one of the 5% you need to do things differently to the 95%

 

[robots]

hello,

concentrate on your income (work), you will make far more money in life time from this,

you could probably make "$200-$300 profit" a week just by "saving".

thankyou

thankyou

 

[wayneL]

To be one of the 5% you need to do things differently to the 95%

Does that include writing in big red letters? :

 

[tech/a]

hello,

concentrate on your income (work), you will make far more money in life time from this,

you could probably make "$200-$300 profit" a week just by "saving".

thankyou

thankyou

Bots.

Its not how much you ferret away or how it is that you come to have surplus to ferret away its what you do with it that will determine your financial success.

But you knew that!

 

[Chorlton]

In conventional trading you need a trend to make a profit in one direction---that which your trading. Not talking options.

That trend can be 1 bar.

Ah... Depending on the timeframe.... Good Point!!

 

[stargazer]

Hi all

Well i didn't think this would generate so much response great to see and appreciate everyones comments.

It appears that many have been at this point and have progressed with experience and wise decisions.

Yes the MENTOR is i have tried to establish with anyone that was interested but realistically if you are not paying them why would they bother with your constant barrage of questions.
This is why i think people go off on dangerous roads such a seminars and glossed up presentation and are prey because the speakers are good and they are convincing.

Heard one the other day about buying futures said it was the easiest market to trades and has never been wrong. Well you do sit up and listen. He made sense to me. But talk to a person that is not selling you anything and is truthful by experience and putting his own money in and he/she may have a different version of the futures market.

Well thanks again for all you replies and as they say the Longest Journey starts with the first step.


Cheers
SG

 

[Porper]

Some of the best information is the cheapest and the best and cheapest info you will get is right before your eyes on this forum with thousands of people giving their views, their highs and their lows. People with experience and some without. I personally think too many people get greedy and want results straight away. Just do you research be patient and don't get carried away.

Trading or investing is no different to starting any job as an apprentice, yet people (myself included), think they can come in and after a few weeks make continuous profits.

If you start a job as an aircraft fitter they don't let you re-programme the electronic control unit in your first month Yet we think trading large accounts with borrowed money is a doddle we can do with our eyes closed.

It's no different to any other job/business, time is needed to learn, experience is needed to weed out the mistakes.Dedication is needed so as not to give up in the tough times.

Effort equals reward.

 

[motorway]

and invest whatever income in a low fee index fund

what index, what market and what time ?

NASDAQ,,, 2000 ?
Nikkei 1989 ?

I used to think that markets can head in 3 directions:
1/ Up
2/ Down
3/ Sideways.

They do

and at the same time

Ah... Depending on the timeframe

I would say depending on the scale of magnitude..

motorway

 

[austek]

The first two important steps a Newbie has to go through in what would have to be the most lucrative game going is,
1, realizing that they know nothing about the market and how it really works.
2, realizing that the work they need to do to become consistently profitable is immense and a long way off.

If after that point you are still interested then the obvious thing to do is set about educating yourself to get a broad based knowledge in market mechanics then along the way you should find something that sparks your interest that you can then specializes in. Only after that ,finding a niche and learn & practise till the cows come home, have you any chance. Bottom line you are probably a couple of years off, minimum.

Do you really think it should be easy?

As TH above said you have a couple of years work ahead of you, reading books, scouring forums, searcing the internet for things you do not understand. If nothing comes to mind as far as finding a method that suits you haven't worked hard enough.

You have to really want it, and while working at it systematically (you have a goal in place don't you?) the type of trading that suits your personality will creep up on you. It's there waiting for you to grab it, develop it and finess it. This will take more years than you expect, but once money making confidence creeps in it becomes a joy if it blends in with your life style.

I trade for living, and go fishing every week competatively and make time to keep my wife company (the hardest part).

Don't have to spend squillions, get money bags list of the top 10 trading books in the world and get them 2 at a time from your local library.
Costs $1 per book, then buy the ones that interest you as a reference book,
probably around 1 book in 5, maybe less.

I stopped at just trading shares, but guys like TH I dips my lid to, although we have been trading for the same amount of time he trades everything - futures options and shorts among other things, but I am happy with my lot at this stage. It's up to you, nobody else, I just saw it as a challenge not as something hard to do. but then again it must be obvious to you that you will be pitted against the best traders in the world. We all are.

 

[IFocus]

Yes the MENTOR is i have tried to establish with anyone that was interested but realistically if you are not paying them why would they bother with your constant barrage of questions.

SG if you do all the work and don't be a time waster you will be surprised how large the crowd will get, follow Nizars posts for example kept asking kept getting hopefully help Often people will hope because it helps them to revisit old ground its a never ending learning experience for as long as you step up to the market you are forever learning never stops

 

[tech/a]

Yes the MENTOR is i have tried to establish with anyone that was interested but realistically if you are not paying them why would they bother with your constant barrage of questions.

Why?
Because they want to.
If they dont then they wont.
Personally I'm happy to pay for an expert.

"Who,s smarter those with a degree or those who employs those with degrees?"

 

[weird]

Why not try something like SPA3,

http://www.sharefinder.com.au/

Looking at the results ( http://www.sharefinder.com.au/deloitte.php ) , sounds alright, for a few grand (includes a charting package and system).

I would consider it if starting from scratch, and over 50K + capital, and have reasonable expectations on ROI.

I believe there may be a monthly subscription, although if trading sufficient capital, and the system works, this hopefully would not be an issue.

I am not an actual customer so do not know the service in detail, but heard some good reports.

I hope that if there is a monthly subscription, it is mainly paying for the data subscription for the package, and system developments (although if the system is robust you would hope that they are not too regular).

Anything less than 50K trading capital , I think you may struggle (with brokerage and having a sufficient size portfolio), if trading shares, and not using leverage (which I would avoid at this stage, or evenly completely - my bias).

"You only find out who is swimming naked when the tide goes out." - Warren Buffett

 

[stargazer]

Hi

SG if you do all the work and don't be a time waster

I don't consider myself a time waster I try and absorb as much as I can and investigate it.


cheers
SG

 

[ghotib]

...Yes the MENTOR is i have tried to establish with anyone that was interested but realistically if you are not paying them why would they bother with your constant barrage of questions....

Some non-financial reasons a person might even enjoy a constant barrage of questions:

* Teaching is one of the best ways to learn. Answering questions forces people to clarify their own ideas, and maybe to recognise gaps or inconsistencies in their knowledge or to think about something in a new way.

* Gratitude to someone who mentored them; it's usually hard to give back to a mentor, but you can pass on.

* A chance to talk in depth with someone who's really interested. If you think about it, most people have most of their social interactions and close relationships with people who are not not expert, or even particularly interested, in their field of expertise. Your mentor might be training you up to be someone they can talk shop with.

* They might just like you; or they might recognise themselves in you; or there might be a gap in their life from losing a partner or a child going overseas or something and mentoring you is a way to fill it.

* They might love to argue, and your questions can be good starting points for good arguments - you have to challenge the answers though, which probably means you need to do your own research because you'll have made all their effort worthwhile when you beat them... Oh gee, that's what a mentor will be helping you learn to do

Mentoring is a personal thing, and there's more to people than money. OTOH, don't take an unpaid mentor for granted; a bit of gratitude goes a long way.

Cheers,

Ghoti

 

[Nick Radge]

I thought this may be appropriate. I met Brett last year and have a lot of respect for him...


What Makes an Expert? Three Surprising Research Conclusions
by Brett Steenbarger
traderfeed.blogspot.com

The goal of every serious trader is to acquire expertise: the ability to succeed across a variety of market conditions over time. A recent study that I reviewed found that such expertise is rare indeed, perhaps as uncommon as 1 in a thousand. The same researchers, however, found that such expertise *does* exist; a small core group of traders persist in their success year after year.

So what makes an expert? How can traders guide their own development and become expert traders?

A research summary from K. Anders Ericsson, a leading researcher in the field, offers three surprising conclusions:

1) "Measures of general basic capacities do not predict success in a domain" - Experts cannot be distinguished by their superior intellects or other cognitive talents. This suggests that, while certain inborn traits and lack of capacities might prevent the development of trading expertise, the presence of particular native talents cannot ensure success.

2) "The superior performance of experts is often very domain specific and transfer outside their narrow area of expertise is surprisingly limited" - Being an expert in one domain does not predict expertise in others; a person can be a highly accomplished trader, but not expert in other areas. Moreover, a person can be an expert scalper or portfolio manager and yet fail at other forms of trading. This is the notion of "niche" that I describe in my book: the successful trader has found a particular sphere of success that expresses his or her skills and interests.

3) "Systematic differences between experts and less proficient individuals nearly always reflect attributes acquired by the experts during their lengthy training"- A saying among expertise researchers is that practice does not make perfect; perfect practice makes perfect. The expert is one who has undergone a structured, deliberate process of training that builds competencies, offers extensive feedback, and draws upon intensive effort over time to internalize knowledge and skills.

What does this mean for traders? Here are three conclusions of my own:

1) The majority of traders are looking for expertise in all the wrong places. They look for *the* right trading charts, indicators, setups, or systems. They are like beginning golfers who think they'll succeed if they only get the right set of clubs. Because they hope to get "the answer", they expect success in a year or two. The research is unequivocal: expertise develops over a period of many years. If those years are not structured properly, traders will repeat a single year's experience ten times; they won't acquire ten years of experience.

2) The vast majority of offerings in trader education are not structured for expertise development. Seminars, books, Web articles and blogs, weekend courses--all can be useful in imparting information. But expertise development is not simply about the accumulation of information; it is about skill development under realistic, challenging conditions. No doctor, athlete, or musician could acquire expertise by attending seminars or reading books alone. The same is true for traders.

3) The reason most traders fail is that they never enter a path of expertise development. It is rare to find training programs of any quality and substance at proprietary trading firms; one finds mentorship at investment banks and some hedge funds, but this is very hit or miss depending upon the commitment of the mentor and his/her skill in imparting skills and structuring a learning process. The independent trader has even fewer resources to generate and sustain an accelerated learning curve. There is much more to acquiring expertise than keeping a journal and trying to follow a simple plan.

So what does a trader need to progress from being a novice toward becoming competent toward exhibiting expertise? A curriculum: a structured process, like physicians undergo, that begins with information and understanding and then progresses steadily through skill development. In my next post on this topic, I'll explore what such a curriculum might look like.

 

[theasxgorilla]

A recent study that I reviewed found that such expertise is rare indeed, perhaps as uncommon as 1 in a thousand.

Sounds like the whole 5%/95% ratios people have been throwing up are way ambitious...0.1%/99.9% according the Brett S's study.

ASX.G

 

[Trembling Hand]

Here is the study. Its from Taiwan over a 4 to 5 year period tracking all day trading accounts. Very extensive study.

http://faculty.haas.berkeley.edu/odean/papers/Day Traders/Day Trade 040330.pdf