[Soaked]

So my friend has been encouraging me to get into trading and I was wondering about people's thoughts on it and where I might start some reading to gain insight into the marketplace.

My friend has been trading for years and gave up working and is offering to show me all the programs and algorithms that he uses and trade with me until I'm confident myself.

I'd probably buy a new laptop for this as my current laptop has died and probably not feasible to trade on an ipad I wouldn't imagine. Are there any qualities in a new computer that would be desirable for trading?

Any informative websites, experiences or insights would be most welcome. Cheers

[sammybiker]

I would never recommend trading unless you're ready to put 10,000+ hours into getting it right and even after you get it right, put all/any capital you have at constant risk.

If your friend is truly a no bullshit, profitable trader, than learn what you can from him - absolutely. But I'll stress that profitable traders are few and far between...keep your bullshit alarm close by.

There are easier, less stressful and more profitable ways out there to make money. I speak from experience and am a much happier person since moving on from trading.

(06-08-2015 02:52 AM)Soaked Wrote:  

So my friend has been encouraging me to get into trading and I was wondering about people's thoughts on it and where I might start some reading to gain insight into the marketplace.

My friend has been trading for years and gave up working and is offering to show me all the programs and algorithms that he uses and trade with me until I'm confident myself.

I'd probably buy a new laptop for this as my current laptop has died and probably not feasible to trade on an ipad I wouldn't imagine. Are there any qualities in a new computer that would be desirable for trading?

Any informative websites, experiences or insights would be most welcome. Cheers

[Simeon_Strangelight]

There are forums out there for online traders.

It can be done, but if you ask here about what notebook to buy, then this is not promising.

Nowadays you don't even to risk real money. Most companies offer virtual trading accounts where you can test out your trading. If you make significant money there without Black Swan events, then you are good to go after having done:

1. Fundamentals - market theory as well as books put here : http://bclund.com/2012/03/13/20-books-ev...ould-know/

2. Money management and risk assessment - without it everything may be gone within one day

3. Trading style / system based on your own individual personality - not easy to come by - takes experience and plenty of knowledge - it is very unlikely that you will be able to replicate the system of your friend, but you can try

If you adhere to those rules, then you don't have to lose money to even find out if you are good at it.

[Sherman]

I don't recommend trading, but below is solid website.

https://www.bigmiketrading.com/

[Felix 5000]

glostic sense

[Glaucon]

Read this, he is the real deal:

http://armstrongeconomics.com/armstrong_economics_blog

[Days of Broken Arrows]

Spend as much time looking at economic cycles and trends as you do stocks. Stocks do not exist in a bubble. They're contingent on a bunch of factors, some economic, some cyclical, and some having to do with analyst's ratings, which are posted each day at Marketwatch.

Not paying attention to trends is where I made my biggest mistakes. I picked great stocks, but it was September and stocks historically drop in October. I didn't realize this. But boy did we get an October drop last year.

Moral: The best stock in the world is not the best stock if you buy it a week before the market goes into a tailspin and drags your stock down with it.

[DaveR]

(06-08-2015 06:51 AM)sammybiker Wrote:  

I would never recommend trading unless you're ready to put 10,000+ hours into getting it right and even after you get it right, put all/any capital you have at constant risk.

If your friend is truly a no bullshit, profitable trader, than learn what you can from him - absolutely. But I'll stress that profitable traders are few and far between...keep your bullshit alarm close by.

There are easier, less stressful and more profitable ways out there to make money. I speak from experience and am a much happier person since moving on from trading.

^ excellent advice, although I don't believe that there are many more profitable ways for a good trader with a decent amount of capital to make money.

Very few people have the ability to separate their stress and emotions from their trading decisions. Success in trading has very little correlation with a man's intelligence or his success in other kinds of business - it requires a very specific kind of personality. The skills can be learnt but the mental state cannot.

I would suggest that you try your hand at Poker competitions first. The skills required to succeed in Poker, especially risk management and planning, almost directly translate into the world of trading. If you can consistently perform against other professional Poker players, then it would be worthwhile investing a couple of years of your time into learning how to trade.
The reason I suggest doing it this way is because the rules of Poker are quite simple, so you won't need to spend years figuring out if this kind of work suits your personality and style of thinking.

[Soaked]

Thanks for the really great replies, this is exactly the sort of data that I was looking for.

[TheMan]

Google "Baby pips" for a great forex introduction

[TheMan]

"There are easier, less stressful and more profitable ways out there to make money. I speak from experience and am a much happier person since moving on from trading."


@sammy, for example...

[defguy]

Keep in mind there are NUMEROUS ways to day trade. Most people think you need $25,000+. Thats how you know they dont know what they are talking about. Most professional traders trade futures/commodities ie oil CL gas NG dow mini YM s&p mini etc....and with the right broker like Ninja Trader you can day trade all those commodities for under $3k.

If someone SHOWS you live how to do it, jump on board, its a rare opportunity. Im in a class where i watch live my instructor trading. He makes $1k+ every class trading 1 contract. His favorite line is, "Someone said to buy here i dont know who that was, he must be really smart." Im not at that level where i can duplicate what he does. My friend quit his job after 2 years watching the instructor & trading, he put in the time & now makes $500-1000 a day trading just 1 contract. In less than 6 months he will be trading 10 contracts. IF you find the right instructor, who has a disciplined system with risk to reward, and you put in the time ie 2 years, You can do it.

Why 2 years? Think of it like a video game, call of duty for example. Its a simple game fundamentally. You know what all the buttons do: point, shoot, run, jump; kill everyone else, don't die, you win. Super simple. Problem is emotions get in the way, reaction time isn't always there, sometimes bad luck, sometimes caught off guard or not on your A game, sometimes you get sloppy, you name it. But if you're persistent you can become good enough to win consistently. You dont even need to be the best in the world, just win more than you lose. The question becomes "if you know that after 2 years you can make $10k+ a month working no more than 10 hours a week, would you put in the 2 years necessary to really learn it?" Again, some of it IS luck. With thousands of books, articles, noise, its easy to have to learn everything the hard way. If you find someone who has a winning system and you get to watch it live and learn from it, count yourself lucky. And hopefully you capitalize on that lucky fortune.

[djk100]

If you're trading stocks, you will need substantial amount of capital in order to make a living. But if you're trading futures, if offers you leverage but be careful because it could increase your losses if the trades dont go your way, In addition, never ever trade options unless you are familiar with the greeks and how the mechanism of option trading works.

[Lerkes]

(06-09-2015 12:34 AM)defguy Wrote:  

The question becomes "if you know that after 2 years you can make $10k+ a month working no more than 10 hours a week, would you put in the 2 years necessary to really learn it?"

Generally and especially if trading is not your job or its not your goal to be a trader as main source of income you also have to ask yourself if your system produces enough trades within the time frame you can spend trading each week/month to be more profitable than investing your captial while having a reasonable risk-reward ratio on your trades.

Buying the S&P500 nets you and average return of 7%/year and if you put some more effort into investing you can probably get 10-15%/year without putting in anything close to the time you would spend trading and/or learning to trade. If your trading does not top that long term, you waste your time and money.

[Soaked]

Thanks everyone I'm really loving this feedback it's really perfect and provides a good context for what my friend is discussing with me.

I'm going to go ahead and figure out my next steps.

[DaveR]

(06-09-2015 12:34 AM)defguy Wrote:  

My friend quit his job after 2 years watching the instructor & trading, he put in the time & now makes $500-1000 a day trading just 1 contract. In less than 6 months he will be trading 10 contracts. IF you find the right instructor, who has a disciplined system with risk to reward, and you put in the time ie 2 years, You can do it.

Many people have such friends, but the thing one should keep in mind is that if that level of return is achieved consistently, he'll be wealthier than George Soros in a few years.

[Gringuito]

(06-09-2015 07:05 AM)DaveR Wrote:  

(06-09-2015 12:34 AM)defguy Wrote:  

My friend quit his job after 2 years watching the instructor & trading, he put in the time & now makes $500-1000 a day trading just 1 contract. In less than 6 months he will be trading 10 contracts. IF you find the right instructor, who has a disciplined system with risk to reward, and you put in the time ie 2 years, You can do it.

Many people have such friends, but the thing one should keep in mind is that if that level of return is achieved consistently, he'll be wealthier than George Soros in a few years.

Exactly, I'm hit up by these kind of guys all the time. I only know two guys that consistently make money trading and one has a seat on the exchange. In my view this is very similar to gamblers. You always hear about when they win but you rarely hear about when they lose. In my view, there are much easier ways to build wealth (owing a company). The stock market should be part of your wealth preservation plan once you make your money.

[Seadog]

(06-09-2015 01:25 AM)Lerkes Wrote:  

...and if you put some more effort into investing you can probably get 10-15%/year without putting in anything close to the time you would spend trading and/or learning to trade. If your trading does not top that long term, you waste your time and money.

I like the bombast with which you say that. Just "Put in some more effort" and you should be able to beat the long term market by ~50-100%? Care to elaborate exactly how? The reason I say is that over the long term most professional fund managers who do this for a living can't even beat the market, Buffet long term has returns ~2.5x the SP500, and he is about the best there is.

Can you make money day trading? Sure, but it's anything but easy. Everyone I personally know who's tried it got eaten by fees, and eventually left the business.

[Simeon_Strangelight]

(06-09-2015 08:10 AM)Gringuito Wrote:  

Exactly, I'm hit up by these kind of guys all the time. I only know two guys that consistently make money trading and one has a seat on the exchange. In my view this is very similar to gamblers. You always hear about when they win but you rarely hear about when they lose. In my view, there are much easier ways to build wealth (owing a company). The stock market should be part of your wealth preservation plan once you make your money.

It's more akin to professional poker. The amateur gambles, the pro is sufficiently adept that he can guarantee to make money long-term. Sport betting can be done professionally too.

But similarly to pro Poker it is anything but easy - it is probably more difficult. Personally I think that the chances of a trader to make it on his own long-term without the aid of some helpful market (extreme boom phases like the dot-com boom) is probably 1 to 10.000. They say that 1-2% lose, but I don't believe those stats - it's probably only for a small period and the pro traders at banks and hedge funds are counted into it.

On the other hand business is also a high reward, low risk of success enterprise. I would estimate that only 1 in 2000 business strike any decent success unless you count in every self-employed architect or plumber as a "business" just like some stats do.

It is absolutely impossible in our centralized automated economic system to have a country of entrepreneurs. While a decent job is the least likely to get you big money, it will give you relative stability and the possibility to accumulate a moderate degree of wealth.

And the stats for a proper education to pay off are high: plumber, specialized accountant, various engineering gigs - all of those jobs have a "success" rate of over 85-95%. Compare it to a potential success rate of business of 0,05%. Trading is even lower at 0,01%.

Of course the potential return of the latter enterprises are such that still many people will take the risk and work for it. But yeah - business has 500% better odds of making it - maybe it's 1000%, but that is still 1 in 1000.

People who hit up well-off individuals for investment funds are often hucksters who make money on commissions or some other scams similar, but at lower levels than Bernie Madoff. Even major banks and companies often make their big bucks through practices that are less than ethical. Still - it's possible to make it, but you should know the odds before quitting your day job.