7/07/2010

How to learn to trade profitably

If you are new to trading there is no defined path to learn trading. All traders  in the beginning  feel lost. There are hundreds of choices you need to make and hundreds of things you need to learn before you can expect to make consistent money.  You will have to jump couple of orbits to start understanding every thing and put a proper trading approach together. Which often  takes time, patience and persistence. Most traders who attempt to trade will not survive the learning curve. In the last 5 years or so many traders started blogs and attempted to trade and you will see most have quickly folded.   

We were all beginners ...............

One of the big problem for many traders is that they underestimate the amount of effort and time required to understand market and from there to move on to building profitable method. There is a constant allure of simplistic and tactical systems promising big returns and simple ways to make money. 
On the members site , one of the first things we constantly emphasize is that it will take you time to learn to trade. I always tell people to set aside minimum 2 years or so to learn trading if they are serious about trading. As a result most of the  1000 or so members have been around for 2 or more years. 95% of the members renew their subscription because of the ongoing learning emphasis and new material being added to the site every month.. Any member who has put in effort and struggled through initial few weeks and months and once got it right has found success on their own. You can ask around and they will tell you that. Every one of the 1000 members have come through word of mouth and reference of current member. 


How a 2000 member strong community can help you....





All of us were beginner at some stage and had exactly same problems like you are facing currently.   
When you are a beginner in any field or to a new setup or new method in the beginning there is big cognitive load. Whenever we try or attempt doing something new where we do not have sufficient expertise , our short term memory gets loaded and we are unable to do the job fluently and efficiently. Short term memory can only handle less than 7 pieces of information at a time. Excessive information creates cognitive load. Repeated practice reduces such cognitive task. To master a setup you need to organize around it and practice it then the cognitive load decreases. You need strategies to reduce cognitive load during learning phase.  

One of the benefit of group learning project like the members site is social conditioning and social modelling. Seeing people similar to yourself trading in real time and sharing their success and methods can enhance your own self efficacy beliefs. Seeing 2000 other beginners similar to yourself succeed by sustained effort raises your own beliefs that you too can possess the capabilities to master comparable activities required to succeed. In the beginning you will have many questions and if  you frame your question properly several members will answer it. They also had encountered same issues when they started out. Such interaction provides you a quick learning pathway.


You can not trade if you do not have software......

One of the first thing you need to have if you want to succeed in trading is right software and right broker. I would say first get the right software in place. You cannot learn trading unless you have a scanning software and also historical data. In learning stage you need to go through history and unless you have easy access to historical data you will not be able to learn much.

Your learning's will be very fast once you get a software, you will learn more in a month than you learned in a year once you get software and set it up properly. Because the discussion here or ideas here you will be able to see for yourself, they will not be some abstract discussion.

Telechart Gold is the software I use for my style of swing trading.........

When selecting a trading software look for something which is widely used by most traders. Often I come across new traders using some exotic software not routinely used by traders. You are just complicating your learning phase by doing this. For a widely used software there are ton of resources to help you learn trading quickly. If you select some exotic niche software , good luck, you are on your own.

The most commonly used software amongst active traders are:
Telechart
Amibroker
esignal
Stockcharts
Trade Ideas
Trade Station
Bloomberg

Telechart is the most commonly used software by most traders. And it is the best starting point for most new traders. Once you outgrow Telechart then you can think of other things. Amibroker is second best choice. You need a bit of programming knowledge to use Amibroker.

It will take you few weeks to months to become very good at using any software. That is typical learning curve. You can pray for miracles, but unfortunately that is the reality. So set your expectations accordingly. 


First learn how to use software and broker........


Once you get Telechart go to Worden site and in the forums there are many videos explaining how to use the software. If you spend a week going through all the video on Worden site you will get very good grasp on how to use the software. Scans for every method I use have been discussed multiple time and every week I make a post with all the past posts related to the method. I will also be putting up videos of how to setup scans from time to time.

Once you set up your software the next important thing to look at is which broker to use. If you are planning to be a swing trader or a trader that is going to do at least 20 to 25 trades in a year, look at your choice of broker. The number one broker used by most active traders in Interactive Brokers. 

Besides Interactive Brokers, there are many other good brokers around. I use Interactive Brokers, Fidelity, and TD Ameritrade.

Once you get broker take some time to learn how to place order, how to put a stop, how to close positions. How to access market data. How to use the brokers scanners. Most brokers have pretty good simulators which allow you to learn these things without risking actual dollars.

These two things, software and brokers are the first thing to get in place, if you want to trade profitably. 


It will take you 3 to 6 months or more to master simple swing trading methods......


Once you do that you will still have a learning curve of 3 to 6 month or more depending on amount of time at your disposal. Once you have the infrastructure in place, you need to understand how to use it properly. Most consistently profitable traders I know of had learning curve of 2-3 years before they became consistent. You will need lot of determination and hard work to make things work for you. If you are expecting miracles then get a prayer mat.


Once you have right infrastructure in place you need to learn the concept of swing trading. Most active traders use a variation of a basic swing trading method. The objective of swing trading is to capture meatier part of a short term trend or reversal. Swing trading methods are primarily based on momentum or mean reversion. 

I personally use a momentum based swing trading method. For each of the method traded here all the scans are done using Telechart. In some methods there are multiple steps. First a scan is done in Telechart then information is collected from other sites like Finviz, Moneycentral, IBD, or other sites.

Be aware of market situation......



You must also be aware of the market conditions when you decide to learn to trade. If you just decided to trade , your first to hundred objective should be to protect your capital. For active traders there are always opportunities in the market. Market is not going to run away from you. So if you are beginner you should first concentrate on setting things up. You can do lot of damage to your account if you start trading without ironing out all issues.



Focus on few methods......

I personally trade only  only 3-4 methods on daily basis:
Episodic Pivots
Top 25 breakouts
IPO
Swing Breakdowns (short)

If you read last few years post you will see these methods have been discussed again and again.  To me trading success is about mastering a setup. The more you trade and think about a specific setup like say the Top 25 breakouts, the more fluent you will become in trading them, you will start to understand the nuances of them. At some stage the setups would become part of you. If you master one setup you will find it easier to master other setups. 





Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

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