Monday, April 04, 2011

Getting off on the right foor

What advice would you give to a novice trader? Understand that learning the markets can take years. Immerse yourself in the world of trading and give ip everything else. Get as close to other successful traders as you can. Consider working for one for free. Start by finding a niche and specializing. Pick one market or pattern and leam it inside out before expanding your focus. My favorite exercise for novice traders is pick one narket only. Without looking at an intraday chart, jot down the price every five minutes from the opening to the close. Do this for an entire week. Be in tune to the patterns. Where are the support and resistance levels? How does price act when it hits these levels? What happens during the last half-hour? How long does each intraday price move last? You won't believe how much you can leam from this exercise. Never fear the markets. Never fear making a mistake. If you do make a mistake, don't complicate the mistake by trying to hedge it, just get out. Stay actively involved with the market. Don't just sit passively in front of a monitor, or simply stare at charts. Notice how many old-timers who have been successful for years still construct their own point and figure charts by hand intraday. They keep the same routine day after day. Develop your own routine for making periodic market readings. Never be greedy. It's OK to leave money on the table. If you can&'t get in at a favorable price, let the trade go and start looking for the next trade. Finally, remember that a trader is someone who does his own work, has his own game plan, and makes hiS own decisions. Only by acting and thinking independently can a trader hope to know when a trade isn't working out. If you ever find yourself tempted to seek out someone else&'s opinion on a trade, that's usually a aure sign that you should get out of your position. Linda Bradford Raschke, responding to a question in Jack Schwager's "New Market Wizards" book.

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"There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time."J Livermore Manchester City FCl Crude Palm Oil

From Dragons and Bulls by Stanley Kroll
Introduction and Foreword
The Importance of an Investment Strategy
5 The Art of War, by Sun Tau (circa 506 BC) and The Art of Trading Success (circa AD 1994)
That's the way you want to bet
Long-term v Short term trading
Technicals v Fundamentals
Perception v Reality
Part 1: Winners and Losers
Part 2: Winners and Losers
Sun Tzu: The Art of War
Those who tell don't know, those who know don't tell
Why there is no such thing as a "bad market"
The Secret to Trading Success
The Experts, do they know better?
Risk control and money management
Larry Hite: The Billion Dollar fund Manager
Systems Trading:Kroll's Suggested Method
Buy the Strength Sell the Weakness
Good advice
The 'good bets' business by Larry Hite
Don't lose your shirt
Ed Sykota's secret trend trading system