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Registered User
Joined: 12/12/2007
Posts: 26
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Hi Guys,
Are many of you out there trading for a living? I am doing it in my spare time at present and am learning as I go along but I am aiming to get into it fulltime once I am confident of making money out of it on consistent basis. I would love to get some feedback on how long you trained/learned your craft on a part time basis before you decided to take the plunge and go full time, I have been doing it part time for 1 year but I've given myself a realstic target of 3-4 years before I would consider going full time, depending on how successful my trading is. I am trading US cash stocks only - I haven't considered options or futures and am not looking at commodities, FX etc for the moment.
I've tried to fend off 'analysis paralysis' by picking a few indicators and sticking with them. I'm interested in short term trades (anything upto 3 weeks) ideally aiming to get in and out within 2 weeks. My main strategy is trend trading and I use the following steps to identify entry points:
Identify trend reversal using volume and candlestick charts (i'm familiar with various bullish and bearish reversal patterns)
Wait for confirmation of trend reversal using ADX and Stochastic
Using RSI as a back up
What i have found recently is that while i was looking to go long on some stocks (price confirmation on candlestick chart confirmed with Stochastic D line crossing 20) the ADX was above 30 but DI+ was well below DI- and by time it was getting close to crossing over Stochastic was approaching overbought territory c. 70.
Has anyone found that stochastic moves quicker than the DI+/- indicators. I have them both of them set up for a 14 day period with stochastic being set up as 14,5,3. In essence what happened was that the buying window had passed while i was waiting for a DI+/- crossover.
I am happy enough to sit these plays out while I learn but the divergence between ADX and Stochastic is right across the board for my whole watchlist. Does anyone believe that this is caused by the volatility in the current market.
Any feedback or advice would be gratefully received.
Thanks,
Darcy54.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Hi Darcy, welcome to the world of trading.
I do full time trading but I also own real estate on the side. Between the two I make a good living. Mostly from my stock trading. It took me about seven years of trading three to four of them successfully before I could do it full time. I have been trading full time for a while now. During choppy markets or trading conditions that I do not like then I just buy (creatively) more real estate.
As far as your point about DI+ lagging Stochastic I am at a loss to see your point I have both set at 14 and I get matching results. Here is a chart that shows this. I also am a trend trader and I like to confirm the start of a rally with trend lines as well. Look in the chart and see how DI+ crosses DI- as Stochastic is crossing 30 and price is crossing up over its trend line. Thus is when I would enter a stock, putting a stop right under the trend line.
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Registered User
Joined: 2/5/2006
Posts: 1,148
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QUOTE (darcy54)
Hi Guys,
Are many of you out there trading for a living? I am doing it in my spare time at present and am learning as I go along but I am aiming to get into it fulltime once I am confident of making money out of it on consistent basis. I would love to get some feedback on how long you trained/learned your craft on a part time basis before you decided to take the plunge and go full time, I have been doing it part time for 1 year but I've given myself a realstic target of 3-4 years before I would consider going full time, depending on how successful my trading is. I am trading US cash stocks only - I haven't considered options or futures and am not looking at commodities, FX etc for the moment.
I've tried to fend off 'analysis paralysis' by picking a few indicators and sticking with them. I'm interested in short term trades (anything upto 3 weeks) ideally aiming to get in and out within 2 weeks. My main strategy is trend trading and I use the following steps to identify entry points:
Identify trend reversal using volume and candlestick charts (i'm familiar with various bullish and bearish reversal patterns)
Wait for confirmation of trend reversal using ADX and Stochastic
Using RSI as a back up
What i have found recently is that while i was looking to go long on some stocks (price confirmation on candlestick chart confirmed with Stochastic D line crossing 20) the ADX was above 30 but DI+ was well below DI- and by time it was getting close to crossing over Stochastic was approaching overbought territory c. 70.
Has anyone found that stochastic moves quicker than the DI+/- indicators. I have them both of them set up for a 14 day period with stochastic being set up as 14,5,3. In essence what happened was that the buying window had passed while i was waiting for a DI+/- crossover.
I am happy enough to sit these plays out while I learn but the divergence between ADX and Stochastic is right across the board for my whole watchlist. Does anyone believe that this is caused by the volatility in the current market.
Any feedback or advice would be gratefully received.
Thanks,
Darcy54.
i'm a former engineer turned full-time trader.
trading for a living? some of the highest paid people in the world make their money trading equities.
fact is though, most traders lose money.
technical analysis is not really difficult to learn, just depends on how long you fumble around in the dark, before coming up with a wininning strategy. its something thats take a lot of trial and error, by studying past successes and failures.
do you have a money management strategy? most believe a good chunk of your money should be in a secure long term investment. and you can't let yourself get to overexposed to a single trade, should it go bad.
do you perform an intra market analysis using stock, bond, currency, and commodity indexes? and breadth and sentiment indicators, like vix, mccellan, put/call ratio.
what about a sector analysis?
as you can tell i think market direction is 90% of the battle.
cheers
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Registered User
Joined: 3/17/2006
Posts: 16
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Congratulations on seeing your future and planning for it. I was in your same situation 5 years ago. U stumbled in the dark for a long time dumping money into the market. I learn by trial and error. And it has now paid off well. This is the greatest hobby turn money machine i have ever found.
My advice
1.stick with worden by using TSV, MS, ADX(+DI,-DI), and Stochastics.
2. Read the book Trend Following by Michael Covel good examples of other professsional traders
3. money management, this is the biggest and most important advice you have to think like a machine and do not become emotional.
4. study study study options. I trade the options on one stock and only one stock for the past year and i pull returns of 40% to 100%+.
if you are determined and you can put away your ego. you will do great.
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