Its a Long Way to Tipperary

Learning to trade can be a long road, as the song says. I have managed to set up a way of teaching my methodology that  has reduced the learning time for Kiki to about 6 months, although she has been listening to me talking about trading for years.

I get a number of questions by email and PMs to forums where I post, mostly asking similar things. I'll try to answer as many of the questions as time permits, here in the blog.

Patrick and others wanted to know what to read to get started. There are three books I would recommend and you can find them on the great river of books, Amazon.

They are, in no particular order:

Mind Over Markets by Jim Dalton - for structure not how to trade

Trading in the Zone by Mark Douglas

Trade Your Way to Financial Freedom (2006 edition) by Van Tharp

Clicking on the title will take you to links with full details

Sadly, you cannot learn to trade from a book but you need basic knowledge before you start to learn.

Another message compared my training Kiki with the Richard Dennis experiment with the Turtles. If you google it, you will see the whole story about Rich believing that he could teach anyone to trade and proved it by creating the Turtles who traded Rich's money with Rich's system.

I am a strong believer that most people can be taught to trade if they have the ability to focus, have the passion, have the determination to spend the hours and hours in simulation and also not have any fear of losing the initial minimum capital they need to put up to trade live.

But, and there is always a but, I do not believe that a scientific mechanical method such as Richard Dennis' works for most people.  The Turtle system, like most mechanical trading systems, had large draw downs, long strings of losing trades and in the end "stopped working" (that is, the draw downs put it out of business when RD started managing other peoples' money). Trading is an art not a science and there is no way a computer can be programmed to be as efficient as the human brain in evaluating all the variables and nuances that are required to put a trading plan into practice. If you look at the trades in the posts you see low draw downs and a high percentage of winning trades. Without these qualities in a methodology, most people cannot stick to a trading plan, me and Kiki included.

Others have asked about charts and indicators. The bar charts are using MultiCharts which can be programmed in Easylanguage (like TradeStation). My two volume indicators are not supplied by MultiCharts but were programmed externally. The second from the bottom looks at bar by bar buy and sell volume, the lower one smooths and accumulates that information. Each gives me different information that I use in my trading plan. The MomDot is something I use when I need to further qualify an entry or exit. It's what it says on the box, it looks at momentum in a tighter way.

The MP chart is an add-on to Ninjatrader. Its from fin-alg.

Datafeed: If you want to look at data then you need a feed that gives you unfiltered data. Some of the broker feeds filter or aggregate data, other don't, so you will need to do your due diligence as usual.

Finally, Sam and a bunch of others have asked me for mentoring and training.I'm concentrating on Kiki at the moment and that is taking all my extra effort. But follow the blog. There's a lot of good information here.

And now for the day's trades.

 

Click to enlarge