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Share your genius with a complete noob


Hello Everyone,

I am completely new to trading period (I have not even setup an account with a broker yet). So, i need help with the complete basics as follows.

1. I would like to start my adventure out with 500 dollars (After reading a site they said to determine how much risk capital you can afford). However, I have not found a broker yet who will let me open an account with this much money. Does anyone know of a broker who will let me fund with this small of an amount?

2. I have spent alot of time reading over the information on this site, and the forums here, as well as other sites and I am really confused by the terminology. Does anyone know where I can learn more about this in plain English? Can I ask noob questions here? Is it wrong to ask for advice about trades here on these forums?

3. If I find a broker who will let me open an account, how do I research my first trade?

4. What is the best market (NYSE, Chicago Mercantile Exchange etc.) for me to begin in? What has attracted me to futures and day trading in the first place, is that it seemed to be pretty simple. So, I am wondering how long it takes to pick all this up to a point that you can really understand what is going on. I am talking about being a well rounded novice, not a pro, I realize that takes years.

Thank you for your time. I appreciate any help you might be able to give, and I look forward to speaking with you more in the future.

Dave
Originally posted by dmc68

I am completely new to trading period (I have not even setup an account with a broker yet). So, i need help with the complete basics as follows.

1. I would like to start my adventure out with 500 dollars (After reading a site they said to determine how much risk capital you can afford). However, I have not found a broker yet who will let me open an account with this much money. Does anyone know of a broker who will let me fund with this small of an amount?

I would highly recommend that you do NOT fund an account right now. What you need is to setup a simulator and paper trade until you are making a profit. I believe that Ninja Trader provide a free simulator with their trading platform that you can use.

2. I have spent alot of time reading over the information on this site, and the forums here, as well as other sites and I am really confused by the terminology. Does anyone know where I can learn more about this in plain English? Can I ask noob questions here? Is it wrong to ask for advice about trades here on these forums?

The forum is the right place to ask questions. No question is too dumb. You will often see traders posting acronyms that mean nothing to you at first. If you see something like RTH and want to know what it means then go to our Dictionary and in the search bar at the top type RTH (for example) and see if it finds anything. If it doesn't then come back to the forum and click the "reply with quote" button and ask the poster what that acronym means. The Dictionary can also be found from the links at the top of any page on this site.

3. If I find a broker who will let me open an account, how do I research my first trade?

Don't trade real money.
Start trying different strategies and see how they work for you. Start with something really easy like a moving average crossover and paper trade that until you know how it works. The watch, read and learn the strategies that traders are posting in the forum and try them out in sim-mode. At some point you will find a strategy that makes sense to you and suits your trading personality and tolerance for risk. Follow up with further research on that strategy.

4. What is the best market (NYSE, Chicago Mercantile Exchange etc.) for me to begin in? What has attracted me to futures and day trading in the first place, is that it seemed to be pretty simple. So, I am wondering how long it takes to pick all this up to a point that you can really understand what is going on. I am talking about being a well rounded novice, not a pro, I realize that takes years.

The best market to start with is the E-mini S&P500 Index Futures contact which is most frequently referred to by its ticker symbol ES. This is the most liquid future and is the most talked about and is the easiest to research. Learn by paper trading this and after a while you'll hear about and learn about other symbols that because of your background you may know more about.
Thank you for your help. I looked on Ninja Trader for there practice application you mentioned. I did not find it yet, but I will keep looking, and continue posting with questions.

Thanks again,

Dave
Dave,

Did you check here?

http://www.ninjatrader.com/webnew/download_trading_software.htm

The application is the same one for real or simulated, you are just running it off a simulation account. This is good because one can learn a lot about the operation of the application before trying to use it live with real money.
You could open a Forex trading account with your $500.

One popular Forex trading platform is called "Metatrader"

The leverage in Forex is typically 100:1, so use only risk capital you can afford to lose.

I suggest (strongly recommend) you stay on the simulator until your method is profitable for at least a month or two, and you have not blown out the sim account balance. Set your starting account balance in the sim account to $500.

Honestly, what your suggesting doing, starting with an underfunded account and no experience, has no (=zero) chance of working in the real world.
Hi Dave

Completely understand how you feel as I remember what it was like to be a noob. It can be quite daunting for sure.

However, I would have to say that $500 is a pretty small account to get into any kind of trading. Unfortunately to stand any chance of surviving the initial learning period (and inevitable losses) you'll need a bigger account than that. As the others say practice strategies first and save up more of an account.

Also, make sure you pay attention to the psychology of trading. I find that all new traders get caught up in the magic strategy and under appreciate how important your mindset is.

Look up books by Van Tharp and Mark Douglas for help on this.
Hi, Dave

I'm also quite new to the trading part of trading, i'm wondering would it have to be a real account?. There's plenty of places where you can sign up for a demo account, some of them replicates live trading quite good. Perhaps that could be a good start, i know i personally would never dare to start with a real account. But i lack experience. Perhaps i'm in the wrong here and you have been trading demo for a long time, and if so i apologize, but if not at least it's food for thought.

Regards

David
http://thepatternsite.com/ Having an account demo or live
is good. This site may be helpful in finding patterns that
repete the most
Taking the risk of being redundant with myself, I advise you to take these $500 as money towards your trading education, and dedicate that money to buying a few good trading books :

- Reminiscence of a Stock Operator – Edwin Lefèvre (Jesse Livermore’s life)

- How Legendary Traders made Millions – John Boik (100 years of market & trading history)

- Trader Vic II – Principle of Professional Speculation – Victor Sperandeo (the 1st half of the book is an absolute must read re. economic fundamentals and their impact on the market)

- Enhancing Trader Performance – Brett N. Steenbarger (key reading re. trading education, training & psychology)

- Market Wizards 1..3 – Jack D. Schwager (interviews with top traders – shows how many different trading styles / approaches can all be successful)


After reading these books, you should have a good idea if you want to continue your trading education or not … the following books highlight various aspects of investing / trading :


- Trade your way to financial freedom – Van K. Tharp (an advanced book on trading as a business)

- Trading in the Zone – Mark Douglas (another key reading re. trading psychology)

- Trading Rules That Work – Jason A. Jankobsky

- Trader Vic – Methods of a Wall Street Master – Victor Sperandeo (his 1st book, contains more practical aspects re. trading)


The following books are more “technical” – I suggest reading them after all the other ones, they provide building blocks to build ones own investing / trading system :

- Technical Analysis of Stock Trend – R. Edwards & J. Magee (the “bible” of visual technical analysis, and associated trading tactics)

- Dynamic Trading – Robert C. Miner (a must read, for practical trading of Elliot Impulse Waves & Corrections using Fibonacci)

- Trade Chart Patterns Like the Pros – Suri Duddella

- Mind over Markets – Jim Dalton, Eric Jones (the best introductory book on Market Profile )

- Markets in Profile – Jim Dalton, Eric Jones (builds on prior book, more oriented towards understanding market structure / behavior using MP & trading off of it)


You have to realize less than 5% wanabee traders eventually become profitable ... down the road, usually after thousands of hours of hard work, and thousands of dollars lost to the market as tuition fee.


The books that I suggested you read won't make you a successful trader ... but hopefully, will open your eyes to the complexity of this business, and map a number of possible paths.


Last piece of advice ... find a good coach / mentor - that will save you a number of months or even years.


My 2 cents
Dominique