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Advice for new traders

Discussion in 'Educational videos and material' started by Rock Sexton, Sep 6, 2017.

  1. Rock Sexton

    Rock Sexton Meat Popsicle

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    #1 - ****MOST IMPORTANT**** trading is a NET SUM game. You will lose trades and you have to accept this fact before you can be successful. As long as your winning trades outsize your losing trades you will be profitable. Treat each position as it's own thing, but remember the +/- total is a collective effort unless you plan on stopping after a single profitable trade.

    #2 - Never trade with emotional money i.e. what you can't afford to lose. It will almost certainly cloud your judgement.

    #3 - If you're not an experienced fundamental analyst - stay the hell away from convincing yourself you know the industry of the stock your trading and don't convince yourself that you know how to analyze financial statements. It's pure hubris and swallows up 90% of the traders out there.

    #4 - Do not invest based on articles from the internet. They sound intelligent, but you have no idea what the trading performance is for the people who write them. If they make a living posting articles, it's likely they never made it as a trader/investor and chose to make a quick dollar trying to portray themselves as one.

    #5 - Be careful of chat rooms. Most of them are designed to fool traders into buying a stock that is actually being dumped.

    #6 - "Be fearful when others are being greedy and be greedy when others are being fearful." - Warren Buffet. Always trying to buy a breakout is a losing strategy for most people. The market is designed to trick the less informed "herd" into buying at the peak of a rally and panicking at the bottom in order to complete institutional orders. Avoid all of this by learning to take opposite trades at "the extremes". You will significantly lower your risk.

    #7 - They say a stock or market is only trending a mere 25% of the time - which is what makes breakout trading so difficult. There is far more opportunity identifying when a stock has re-entered a prior trading range. Within that range is a price level that is the most active. Use that as a decision for which direction to trade in.

    #8 - Study "Wyckoff Springs" and "Accumulation/Distrubtion Model" by Richard Wyckoff. Study candle/volume relationships presented in "Volume Spread Analysis" by Tom Williams. Finally, learn either "Market Profile" or "Volume Profile". Each will teach you to identify the footprint of a stock move. The more you know about "how" it moves, the better you will be at either joining it or trading against it.

    #9 - Price "indicators" are mostly a waste of time and clutter your charts. They represent lagging or "past" information and only adjust long after price already has.

    #10 - A chart is a chart is a chart. The same patterns you see play out on a 10min chart also happen on high time frames like daily, weekly, monthly. I highly recommend watching the patterns on the lower TF's so you can begin to understand their behaviors and THEN start trading the high TF's to eliminate the noise factor.
     
    #1 Rock Sexton, Sep 6, 2017
    Last edited: Sep 15, 2017
  2. bigbear83

    bigbear83 Active Member

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    thx @T0rm3nted for copying this to its own thread ... and a big time thx to @Rock Sexton for the great post.

    this will come in real handy whenever we have newer traders come in here (or even on the chat) and i can just simply link this thread and direct them to rock's post. :)
     
  3. StockJock-e

    StockJock-e Brew Master
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    This answers a lot of the common questions, a must read!
     
  4. Rock Sexton

    Rock Sexton Meat Popsicle

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    Happy to help!

    I remember what it was like being new to trading. Danger lurks at every corner.
     
    #4 Rock Sexton, Sep 12, 2017
    Last edited: Sep 12, 2017
  5. rg7803

    rg7803 Active Member

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    Nice post Rock!
     
    Rock Sexton likes this.
  6. Virus

    Virus New Member

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    Yeah.... Sounds R. Kiyosaki to me.... which is good, but as you know it requires certain state of mind which is not quite easy to obtain.... all down to individual characters.... hence nothing wrong chatting, reading, etc BUT ALWAYS make your own conclusions. And that is my only advice ;)

    Oh! Sorry but I always value technical analysts over fundamental .... no disrespect obviously.
     
  7. Anny.M

    Anny.M New Member

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    Thanks for advice. It can be really useful
     
    Rock Sexton likes this.
  8. Steven_Burt

    Steven_Burt Well-Known Member

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    I couldn't agree more Rock. I would add Journal, trade reviews and cut losers quick and let winners run. FWIW
     
  9. ifmc institute

    ifmc institute New Member

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