Introduction to Trading the Financial Markets (With Q&A) - Page 2

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  1. #11
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  2. #12
    Arthur is offline Banned
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    Quote Originally Posted by Trevorrow View Post
    Nice post, this is going to help a lot of people out.

    Two things:

    1. I would revise your post on how much capital is needed to trade. I think that should be narrowed down to the markets/style you are trading. I don't want people getting the wrong idea thinking they can take the 1k they have and jump into trading, because thats all that is "needed" to open an account with a broker. For example, in futures, I would not advise trading with anything less than $5k.

    2. I would definitely touch on the futures market some more. There are a lot of benefits to trading futures, specifically since a number of commodities, indexes, and the euro can be traded in that market.

    edit- I just skimmed the post, so if you did cover things in more detail my apologies.
    Thanks for your feedback.

    1) Note that on this question (which is what I believe you are referring to), the question "is how much capital do I need to start?". I wanted to answer this question honestly and the answer is, not much. I 100% agree with you, you need A LOT more capital in order to be better off while starting but that was not the question so therefore that is not the answer.

    2) I'm not a futures trader. I do know that there are indeed many advantages to trading futures but everyone contacting me is interested in equities and that's what I know best so therefore that's what I'm covering.

  3. #13
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    Thank you for taking the time to post this up.

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  5. #14
    Arthur is offline Banned
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    UPDATED: I added some answers to some new questions!

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    What types of tests do you use to test (prospective) factors when building a trading model?
    How many factors do you feel is feasible for a retail trader in terms of labor/cost of obtaining data: profitability of model?
    What type of risk management strategy should I use? People recommend the kelly criterion for "bet sizing." Is there a recommended amount of capital if I use Kelly and am trading options specifically.
    Why couldn't you just sell weekly puts of stocks you don't mind owning at the strike prices, collect the premium every week, and live like a king? I understand why the strategy would be useless for an institutional investor, but if I wanted to make $5k a week, well, this is pretty feasible and seems like to be risk-free.

  7. #16
    Arthur is offline Banned
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    Quote Originally Posted by Monolith View Post
    What types of tests do you use to test (prospective) factors when building a trading model?
    How many factors do you feel is feasible for a retail trader in terms of labor/cost of obtaining data: profitability of model?
    What type of risk management strategy should I use? People recommend the kelly criterion for "bet sizing." Is there a recommended amount of capital if I use Kelly and am trading options specifically.
    Why couldn't you just sell weekly puts of stocks you don't mind owning at the strike prices, collect the premium every week, and live like a king? I understand why the strategy would be useless for an institutional investor, but if I wanted to make $5k a week, well, this is pretty feasible and seems like to be risk-free.
    It seems that most of your questions related to trading based off of a model in the derivatives market. I'm not an options trader, I only rarely use them when I am hedging a large equities position. I answered one of your questions below but what I would recommend is that you go to iHub or similar and ask these questions to a dedicated options trader.

    1) I do not use trading models. I have a list of go-to setups that have proven to repeat themselves with 80%+ accuracy over and over again. These are mostly chart-based setups with a few being news-driven. There is nothing wrong with models or algorithmic based trading but its not for me.

  8. #17
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    Thank you for the response. I'm still collecting data to develop option-specific strategies. What I'm doing right now is using an equity model and trading in the options market for the leverage, since I don't have a 9 figure account, scalability ain't no thing. I'm more interested in separating noise from useful information to trade on.

    As to your response, aren't "go-to setups" essentially models? You see x, y, and z events occurring in the market and make a trade based on that information.

  9. #18
    Arthur is offline Banned
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    Quote Originally Posted by Monolith View Post
    Thank you for the response. I'm still collecting data to develop option-specific strategies. What I'm doing right now is using an equity model and trading in the options market for the leverage, since I don't have a 9 figure account, scalability ain't no thing. I'm more interested in separating noise from useful information to trade on.

    As to your response, aren't "go-to setups" essentially models? You see x, y, and z events occurring in the market and make a trade based on that information.
    Well my definition of a model is an automated system but I guess our definitions may differ. What you're referring to with the "I see x, y, and z occurring therefore..." is what I call a setup. To each their own on that one I guess
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    Old Sport is offline Banned
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    Where do you suggest I find data on stocks and the market in General? I use MarketWatch right now. Not sure if it is good or not.

    Also, how do you trade in Forex, Commodities, and Futures? So far all I have been doing is practicing using Market Watch's Stock Market Game. I never see a option for any of the above except for Equities Trading.

  11. #20
    Arthur is offline Banned
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    Quote Originally Posted by Max727 View Post
    Where do you suggest I find data on stocks and the market in General? I use MarketWatch right now. Not sure if it is good or not.

    Also, how do you trade in Forex, Commodities, and Futures? So far all I have been doing is practicing using Market Watch's Stock Market Game. I never see a option for any of the above except for Equities Trading.
    1) It really depends on what you're doing and what your strategy is all about. I SOLELY trade gap up breakdowns/gap down pull ups, that's it. So the resources I use are limited to Y Finance, a site called smart-ticker, and barchart. You really have to go out and research what it is you need and you'll find some solid sites.

    2) If you want to trade Forex, visit FXCM and you will be able to start a demo account there. For futures and commodities I'm not the best to ask as I don't trade that stuff nor have I ever so I wouldn't know.
    Old Sport and VR1 like this.

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