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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: KymarFye who wrote (15197)	2/9/2002 8:15:17 AM
From: hypostomus	Read Replies (1) \| Respond to of 18137

An excellent memorable quote. We always hope that formal learning will give us the skills we seek, but it is the doing and the failing that cement the learning. I respect your viewpoint because you have so often been willing to share in postings the hard lessons you have learned, and more importantly, what you understood about the causes of failure. I only wish it were easier to understand the causes of success. Perhaps I was a bit harsh about the benefits of books and training. I should have recommended Mark Douglas. What I was trying to communicate in my hasty rant is that I believe in approaching the market as if one were a scientist observing a freshly discovered element of nature with a sense of wonder and curiosity. To read in a book that market makers explore with price to find volume is one thing. To actually watch the bid/ask and time/sales in real time in a modest volume issue as this happens is quite another. Hence my advice about watching ants versus reading books about ants. My poorly made point about watching those "squiggles and numbers" is that the market is fractal. With some exceptions, the same behaviors manifest themselves in yearly, monthly, weekly, daily, hourly, and one-minute charts. Therefore rather than relying on months or years of looking at static charts to sink in, in my opinion it is far more valuable to watch the market at its finest level of detail, learning the essential lessons fast and furious. The tape is, after all, what the greats of lore used to trade with. For example, I think that the best education is trading 100 shares of an active $40 issue for $2 a round trip, risking maybe $10 a trade. I believe that an observant trader at the end of several days of that would have discovered the hard way the phenomena we call Elliot waves, Fibonacci retracements, Gartleys, butterflies, support, resistance, pivots, triangles, and candlestick patterns. For example, while not yet a good trader, I am far from a novice, and I had no real appreciation for pivot points until I repeatedly found myself taking positions on the wrong side of prices where extended wars were fought, agonizingly watching while price went a nickel this way and that, never enough to shake me out, before zooming away from me. Perhaps you are right that training and books are required first. In the hindsight of my own experience, however, I believe I spent far to much time "learning" when I should have been LEARNING.

To: KymarFye who wrote (15197)	2/9/2002 10:40:38 AM
From: Apakhabar	Read Replies (1) \| Respond to of 18137

I note that ljmi has been an SI member for a year and a half so it is unlikely that he is a complete novice, which is too bad in many respects, because a blank slate is a great way to start if you want to learn to trade. I still think the best way to go, for those not joining a firm as LPS5 recommends, is to try to approximate as many features of being in a firm as possible. Kymar, with all due respect, I think it's cavalier to tell a novice to expect "seemingly endless strings of disaster while you're exploring and learning..." This to me is a recipe for never learning. One disaster is a learning experience. Two begins to be a habit. A novice (blank slate version) actually begins with a tremendous amount of psychological capital: he or she has not acquired any of the negative mental states that arise after a series of trading disasters. This particular type of capital should not be squandered. Implied here is the value of perhaps youth, or better yet the value of not being a habitual loser in some other aspect of life. It's just not wise to bring a lot of losing experiences of any type to the world of trading. When one learns at a firm, it seems to be the case that the other traders look to protect the novice from losing his psychological capital. As I understand it they monitor the new trader, they don't let him take big risks, they force him to be disciplined at the end of the day. None of this is easily reproduced in a training course or a book or in a remote trader's normal life, for that matter. I think it's important, however, for a novice remote traders to find somebody, if not an experienced and successful trader, at least somebody to just hang around and watch them trade. Somebody who knows at least enough about trading to recognize a big, risky position and who will not let the remote trader take one or stay in one. If it were only true that "Good judgment comes from experience. Experience comes from bad judgment"! Unfortunately, it is far more likely in the trading world that habits come from experience, and bad habits come from bad judgment. In my own experience I was helped greatly by the fact that I learned the direct-access type of daytrading in a studio apartment with my pregnant, worried wife walking by my desk all the time looking to see how we were doing. In fact when we later moved and I got a private office, my results were dismal for two months until I threw open the door and asked her to please stop by my desk whenever she felt like it! In time, a disastrous loss is virtually inevitable for a full-time trader. So one should strive to be as mentally strong as possible to withstand it. That means an absolute devotion to limiting risk in the early stages of one's learning to trade is essential. I suggest that novices should not jump into the market without having an external control, some interested party (wife, friend, father, colleague), looking over their shoulders.