Good strategies for beginners?

Hi everyone!

I read in another thread that it's a good idea for a beginning futures day trader to choose one simple strategy and learn it inside out. Does anyone have a straightforward system they could recommend to learn and practice?

Or could someone point me to a good source or website to start reading? There is quite a bit of information out there and a big challenge will be just trying to make heads or tails of it. I think the best approach for my learning at this stage is to find a basic starting point from which I can slowly plow forward.

Thanks!

Marcus

Marcus,

I have been a full-time student of the market for 4 years 1/2, and I have not found any "straightforward" trading system yet.

To be honest, I believe successful trading requires a lot of work to get there, a very good markets & trading education to start with, a mentor that can shorten the learning curve for you, and a lot of hard work on your part (since a lot of that hard work will be devoted to researching & backtesting trading systems, it makes a lot of sense to get equipped with a trading platform allowing for system programming & automated backtesting, look into TradeStation, MultiCharts, NinjaTrader, Trade Navigator, and a couple of others).

You probably know the stat already ... it is said that only 5% of wanabee traders will eventually make it as successful traders. Not much different from any other entrepreneurial endeavor, but really something to consider before betting your life savings on it. And if you do take the plunge, please put the odds in your favor and follow the high-level advices in prior paragraph.

Read (or re-read) Brett N. Steenbarger "Enhancing trader performance" ; that should give you some ideas of what's ahead of you.

Take your time and keep your day-job ... becoming a successful trader is a marathon, not a sprint ...

My 2 cents
Dominique

Listen to Dom. Great advice.

I'd emphasize one thing in particular, if you have to use your life savings (or a part of it) to start trading, you shouldn't be trading.

If a beginner trader needs to make money for daily living needs right off the bat, that trader is doomed, the pressure's will be too great for a sustained period of learning to happen.

You will loose money in the first year or two. We all do. Some require longer then others before losing money stops.

So you must have sufficient capital to get through this initial period and also have either an income or other money means to support yourself and family.

There is no easy way into this career path and the fact of having a bad day at the office is losing ones own hard earned capital makes this career path ever more challenging.

Forgive me if I sound discouraging. The rewards are immense for those who are able to get through the dark times. And I would add, the rewards are far more then simply making money.

A great quote from Dalton in his Mind over Markets book:

The ability to execute still depends on the power of ones own self-understanding.

Welcome to a life-long journey of the pursuit of wisdom.

Thank you both for your fantastic advice. It is well taken. Fortunately, I have a great job with terrific people that is relatively stable. As stable as anyone can hope for anyway. I've been trading options for almost three years and I have learned much more about myself as a person than I learned technical information. It's been quite a ride but I'm still in the game and that is a success in and of itself.

I've been distantly fascinated with the markets since I was a teenager and now that I'm in my mid 30s, it seems the interest is still there. Actually, I've been studying music for most of my life and I feel I have only scratched the surface of what there is to learn on my instrument. As a part time private music teacher, I can really see how I am helping to prevent my students from getting lost in the weeds. If I can save them even a small amount of the struggles I went through, I will have done my job. Struggling your entire life to achieve success at a discipline you are desperately passionate about can lead you into some pretty dark places. It's interesting to see how trading is similar.

I am probably like most people in that I was a bit too eager to pull the trigger but fortunately I found this website. When I started trading options I was a bit hasty and after some initial success I got my a** handed to me. What a ride!

Actually, I'm kind of glad and relieved in a way. Knowing that trading is something that can help me learn and grow as a person makes pursuing this challenging endeavor seem much more valuable to me.

Do either of you have or have had a mentor in the past?

Anyway, thanks again. Your advice has likely saved me thousands of dollars already. I will be prowling the forums.

Marcus

I am very new in this field but i can say with my experience that DOm has good Idea you can follow

The most important thing is not necessarily the strategy but the discipline to have a plan and stick to that plan. Strategies are all over the place and they are mostly straightforward. But you must be able to follow it without letting your emotions get in the way.

Even given a proven strategy, most traders fail because they don't follow it.

I think the most important thing is not to follow the herd, don't listen to the gurus who want to charge you money for a "red-light, green-light" kind of system. There are lots of free mini courses that you can get something out of.

You need to find a system that fits your personality. Do you need to trade often? Do you have patience to ride out a trade or do you need to be in and out quickly? How much can you afford to lose?

I have been at this about 6 months and am just about starting to break even or maybe even make a little. My losing days are almost always when I don't follow my plan or if I over trade. But even a good plan will have losers.

I think the most important thing is not to jump from strategy to strategy looking for the next best thing or the holy-grail. Get a good fundamental understanding of chart-reading and find some simple strategies that fit your personality. Don't over-use indicators. I could go on but keep it simple and set a daily goal for profits and for losses. Good Luck!

Note: I spend about 2 hours a night studying and reading - never stop learning. And again - don't follow the herd! They are mostly wrong.

Right here on MyPivots we have several contributors that are of top quality.

I recommend you learn Bruce's volume analysis techniques, it may take a little digging (use the search feature), but certainly the benefit is more than worth the effort. Good quality volume based price levels are very powerful tool for intra-day trading.

Koolblue's price and time projection techniques are available in his private section of the forum.... Here

Also, Jim Kane has produced an extensive collection of outstanding articles you can find in the free-articles section of his web-site... Here

One small advise: Less indicators is better. Don't search for the holy grail in an indicator. It's a fault all new traders make.

If you find yourself in a losing position, remember that it is better to save your energy, cut your losses and move on to the next trade. The financial markets are full of profitable opportunities, just waiting to be exploited, so don’t waste your time on an unprofitable trade!

If you get into a position, you are in a position. If the market begins to move, it will move in a direction. Don't waste energy getting into a losing position. Only get into a position that will be a winning position. Then it is okay to cut your profits, because you are only in winning positions and never in losing positions when you are in a position. Also, exercise regularly, eat a healthy diet, be kind to animals (except for badgers) and practice good hygiene when getting into positions to be more successfuller.

I highly recommend have at least three different strategies for different types of markets. It's better if you take your time and figure these out for yourself, through research and reading and backtesting.

I highly recommend reading Super Trader by Van Tharp, figure out what kind of trader you are and possibly see where your strengths and weeknesses are (tharptradertest.com) then you'll need to really work on yourself and your beliefs, because it has a lot to do with them and how it affects your discipline and committment.

I've tried to find the shortest way, but then I realized, it's better to take my time and figure this out and spend time on the markets.

Since the strategies are related to the characters, you can do the same moves with someone who suits you and work backtest