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I just love the complete aspect of Trading, it takes time and knowledge to learn, some more than others. It is hard and can be very stressful but when it goes good it a nice stress of relief of accomplishment. But I have to ask, what other ways do you mean to make money that is easier ? There is I know but I am pretty much unable to work with public or be in certain situations or places. I am a retired Police Officer after only 10 years of the career. I had to hang up the badge ( volunterly but advised by medical Dr. ) due to several incidents that caused me to suffer from PTSD. Not going to details but I was changed as they all happened in a span of 1 year. But enough on that lets talk money and the market. Now there is ways to make money but to love what your doing also other than trading ?
Can you help answer these questions from other members on NexusFi?
I think this is very good advise and I Thank you for that. That is developing a trading system on your own ( than hits it right on ) or finding one that you can adjust to.
Yes I have, 2 times I said I was done and meant it. But after a couple weeks I would start studying again not meaning to. Just did it and I dont want to say this because it can sound bad. Its like a infatuation. Let me make this clear . I do not gamble, I do not bet, If I go to a Casino once every 5 years maybe I will only take $20 in and when its gone Im done. I cant see how people loose so much money on hoping for luck..
I appreciate your view and saying what you did. But I dont see myself stopping to learn. My wife says she has never seen me so determined and inspired by something like this. I probably could have played MLB, right out of H.S. but I turned down 2 invitations to try out for KC. I loved it but wasnt what I wanted. I raced Pro MotoX and Freestyle MX but never had the desire to keep going after something. My wife has noticed all this and has asked me why ? Honest I dont have a answer besides I find it fascinating and want to make it a career.
Thanks for your advice but I wont quit. What would I do ? What could I find that gives the drive so much to learn trading and the market ? I have never found anything that motivates me to learn more than trading.
Most of the advice is probably stuff you've already thought of before, is really generic in nature, and won't help you develop a strategy.
Trading isn't an Olympic sport, or any of that stuff - trading is a BUSINESS. You're in business to make a profit. 90% of "mentors", and "trading education" companies are BS. They don't trade live, and they use a variety of tricks to convince you that what they're showing you is real. Most of it is not.
Rule #1: Trading is HARD. The reason why 95% of traders fail is because (1) they have no discipline and no focus, (2) they have no money management skills, and (3) they don't know how to read the market.
Rule #2: Most trading courses are worthless beyond teaching the basics of the market.
Rule #3: Most indicators are garbage. Moving averages lag - they're telling you what happened in the past, not what's happening now.
Rule #4: If someone tells you that you have to have a big account to trade with because you'll lose a lot of money before you learn, they're just plain wrong.
Rule #5: This isn't a get-rich-quick profession - and make no mistake, this *is* a profession. I know folks who are reading and studying 16 or more hours a day, every day.
Rule #6: People will tell you that there is no holy grail in trading. They're wrong also. You want to find high probability entries and exits that don't require huge stops - *that's* the holy grail. Having to have huge stops just means that people are lazy about their entries.
Rule #7: One of the best traders I know doesn't use indicators on his charts. He doesn't need them. He and his team make millions a day, every single day, and rarely lose a trade.
Rule #8: You don't need charts that look like Christmas trees, either. The key to trading is to answer two very simple questions: (1) What causes price to move? (2) How can I see that force or forces on a chart?
A couple of books that might help you out - they improved my trading immensely - are listed below:
These are very inexpensive books if you get them in Kindle format - $5 each - and I think they'll help immensely in pointing you in the right direction.
Sorry to hear, must be hard this change, I can imagine that trading would be a solution for you in your current situation.
I guess you've heard a phrase like this "trading is most difficult way of making easy money". Will a be a lot of similar phrases out there, all pointing to a truthful point and that learning to trading is a struggle. Much more so then a regular job. Ratings show only 10 to 20% will be making it.
An important part is that a majority of new people entering the markets have completely wrong expectations. Other part is that we as humans are not wired naturly as traders, just the opposite.
So good to have a buffer/backup plan and an other source of steady income in the learningphase when chances are real your not going to make it. Mine was running an IT service company which I did on the side.
Firstly, to understand the markets, you have to understand what its purpose and who are the participants The purpose of the market is to facilitate trade. Since the participants are human beings psychology greatly affects the perception of value and price behavior.
All markets has intrinsic supply and demand fundamentals that is affected by human psychology, so understanding value ,supply /demand and human psychology will be a start to understand the complexity of markets.
Their are only two states that the market can exist TRENDING AND BALANCING.
The market is fractal a 60minute candlestick chart can show the market as trending , yet on a five minute chart price could be balancing both are correct A five minute balance exist within the larger trend of the 60 min time frame.
In trending markets perception of value changes and moves away from accepted value.
When a market is in a balance both buyer and sellers perceive price as a fair and is accepted for a period of time. The market spends about 80%of their time on any given time frame in a state of balance. Balances signifies trade facilitation through acceptance of value.
Trading is such a difficult, long process. One of the biggest problems is the personal psychology and lack of objectivity...about yourself and also the market. Traders for the most part are attracted to the wrong decision because of their biases and because they cannot read the market correctly. Markets expand and contract and this has to be recognized...and dealt with accordingly. There are bull and bear traps that are not random, but you need to know how to recognize them and act accordingly. You need to think like a buyer and a seller: know where both are...and have an understanding of structure and price action, probability, and risk:reward. You need to learn when the markets are ambiguous...and learn to stay away from them because you will probably lose. You must always evaluate your own subjectivity about the market and your own behaviors that trigger a trade for you. It is a tough business to learn about the market...and learn about yourself. Most teachers make money teaching. not trading ( I can only guess because I don't know most teachers ). I have been at the market just under 40 years. I read a market very well now...and my age and experience has taught me to walk away when I don't see that I have the edge. I don't calculate success from the trades I missed, but by the trades that worked....and all the losses I avoided. I know what bad traders do, and how the smart money attracts bad traders to make bad decisions. I am always aware when I am about to be impulsive and not clear minded...and use that to avoid the trade. When this happens...you can still follow and learn...and if you get no gratification from this...you will probably not succeed. There are traders like Larry Pesavento...a pattern trader and a discretionary trader and a mentor. There are price action traders like Al Brooks who has a video series. Andrew Menaker and Denise Shull work with the psychological aspects of traders....and professional trading firms use them...so why wouldn't you? Do you trade smaller time frames? Do you look at larger time frames. Do you know that larger time frames give you more clarity? Different trades will be attracted to different trading styles...so it's hard to know what you need, and to know what you don't know. Most traders might work hard, but they don't work smart. Most traders don't know what needs to be done...and they would reject it if they knew.
In my first post (#15) I suggested to take a look at the Wyckoff method for a good and solid foundation.
In this post I will present an example of how to use price action in trading based on Wyckoff's method.
In this example I used 2 of the Wyckoff laws namely:
1. The law of supply and demand determines the price direction. This principle is central to Wyckoff's method of trading and investing. When demand is greater than supply, prices rise, and when supply is greater than demand, prices fall. The trader/analyst can study the balance between supply and demand by comparing price and volume bars over time. This law is deceptively simple, but learning to accurately evaluate supply and demand on bar charts, as well as understanding the implications of supply and demand patterns, takes considerable practice.
2. The law of effort versus result provides an early warning of a possible change in trend in the near future. Divergences between volume and price often signal a change in the direction of a price trend. For example, when there are several high-volume (large effort) but narrow-range price bars after a substantial rally, with the price failing to make a new high (little or no result), this suggests that big interests are unloading shares in anticipation of a change in trend.
Attached is a 1m chart of the ES of today May 11th showing the EU open. Times are CET.
At 09:00h EU opened. After making a low it made three pushes up to end at bar A which closed in the middle on high volume. Look at the range and volume of the bar compared to the prior bar. Classic Effort versus Result (E/R) case in Wyckoff terms. Could be seen as a buying climax. On the 3m (not shown) we can see we are in an area where supply emerged earlier on (in the Asia session). Double top and strong move down signaling a Change in Behavior (COB). Shallow pullback (look at the angle) forming a bear flag. No signs of buying pressure. First pullback after crossing the ema20 (1st Cross Sell by Linda Raschke). I went short which is a rather early and aggressive entry. Then bar B prints, low close and look at the volume, there is no demand (ND). Where are the buyers? The following pullbacks to ema20 were all good short entries.
There's much more to tell but I kept it to the 1m chart with price & volume in trying to keep it simple and clear.
If you are interested in price action trading the sources I mentioned in my first post (#15) will show you, and most is available for free. Focus on your foundation (and what resonates with you).