Read 'Trading in the Zone' to learn about the real enemy of trading success (hint: your psychology).
So, I'm going to tell you how I did it, personally at least, also I think what I did worked out pretty well, I recently placed top 2% in a trading competition :) So at least the path I took wasn't terrible lol
I pretty much just dove right into things, trying to paper trade, except I used tradingview's paper trading, which is also pretty great.
I then moved into crypto as it was easy to access, I had some luck there. By luck I mean actual luck. I got very lucky, I thought it was easy. It was not. So after my luck ran out I questioned why I "couldn't trade"
I started to try to learn more theory. I read the following books which, IMO are great.
Trading in the Zone, By Mark Douglas - https://www.amazon.com/Trading-Zone-Confidence-Discipline-Attitude/dp/0735201447
Fooled by Randomness, by Nassim Taleb - https://www.amazon.com/Fooled-Randomness-Hidden-Markets-Incerto/dp/0812975219/ref=sr_1_1?crid=13LH3VBFX62OH
Skin in the Game, by Nassim Taleb - https://www.amazon.com/Skin-Game-Hidden-Asymmetries-Daily/dp/042528462X/
Algos to Live By, by Brian Christian - https://www.amazon.com/Algorithms-Live-Computer-Science-Decisions/dp/1250118360/
A Short History of Financial Euphoria, by John Galbraith - https://www.amazon.com/History-Financial-Euphoria-Penguin-Business/dp/0140238565/
These are more on the advanced side, so I might read them now and then again later when you have some more pretext :)
I read all that, kept practicing and practicing and eventually created my own indicators, which I post on my youtube.
They aren't terribly advanced but you may find some use out of them!
Honestly, I would say just paper trade, fail and figure out why you failed. Repeat n times and you'll eventually be profitable. Besides the books, I never really had one "source" that I went to. I would pull from all over the place.
>Also, what are the best free trading simulators that you can suggest to me? Thank you.
So, totally bias here but I made a tool that helps traders practice their trading on historical data, and, using tradingview, probably gives you one of the most diverse selections of data out of the box!
Besides that, if you're talking live paper trading, there is ThinkOrSwim, paper money.
Lets you paper trade live.
>What do you guys think I should focus on learning for my first strategy? I will be paper trading for now. Also looking for advice on finding stocks to trade through screeners; what filters and things should I be looking for? Thank you
I made something a bit ago that should help you get on the right track:
You're right in that your first main goal should be finding an edge. Best advice I can give there is just keep it simple and stick to solid risk:reward ratios. Make sure the strategy has ridge rules and you follow them as close as possible. I would also get familiar with the market as a whole before moving on to live trading!
After you get a feel for things, here are some books you can read, basically just stuff I've read over the years that I find interesting, for their own reasons.
>So, some different strategies I've found interesting are scalping, breakout, and momentum, and I have also seen some opinions on only trading in certain markets (Ricky Gutierrez for example trading natural gas).
I also like scalping as I'm relativiley impatient! lol
This is some of what I've been able to do through scalping. I love the potential to make several small profits through the day. Most start with swing trading though, which isn't a bad idea either. If you want to practice scalping I would look into finding an edge specific for scalping as some strategies lose their edge on higher/lower time frames.
All in all, this isn't the worst "beginners post" out there lol, you seem to be level headed, especially knowing you should paper trade before jumping right in or entertaining the idea that you can just come in and clean house ;)
oh hey! have I got the tool for you!
and its totally not because its something I made specifically to simulate historical data and practice ;)
But seriously, you may find it useful! Its really simple, lets you buy, sell and close. Lightweight etc etc.
>I'm a grad student in physics and I decided to try to get into trading because I've heard that a lot of people with my background have ended up very successful at it. I also have some research background in stochastic processes, which I think might help me.
I've also heard this. Now, I admit I know nothing of physics, I'm going to take a stab and say this is because physics students are great at challenges... and trading is a challenge. I feel anyone in a difficult studies has more laden potential to be a great trader. Not that everyone will be. I've found trading involves a lot of emotional and mental challenges, those with a great background have a potential to tackle those easier. It involves a lot of paradoxical and straightforward thinking. Concepts etc etc.
One great think I learned and truly embrace sometimes is being confident in your trade, despite knowing full well the chances of its success are not guaranteed. If you don't take the trade, you don't win either way but just putting on trades can be a huge mental battle and god forbid when you hit your first big loser ;)
>Anyway, I've heard the stories about people who dove in without knowing enough and lost all their money and I'd prefer to avoid that if at all possible
So, this happens when you don't go about it with a solid plan of action. Trading isn't magic, its all finite and math. So, you'll want to follow the great beginner rule of "don't risk 2% of your account on any trade." This allows for you to take several losses without doing substantial harm. Before you start losing too much though, you're going to need to reevaluate whats going wrong. At the very least you should be getting close to 50/50. As long as you stick to the 2% rule and cut losses the market won't magically take all your money :) You will have at that point, decided to continue with a strategy you know has proven to not work several times over.
>Can I please get some advice on how to practice most effectively?
So back to shill my little app ;) jk, so I actually made it to do exactly that. I found paper trading to be a great tool (which I'll also talk on) but there was something about packing in lots of scenarios and months of price movement into 15 minutes or so of practice. Its not some magic solution though, you'll still need to paper trade and eventually trade small amounts as each experience is a bit different... but IF you're looking to practice you're trading over historical data, the link at the top will help you with that :) Otherwise stuff like TOS or tradingview paper trading will be real time, which is great... except when markets are closed lol
I would recommend studying past data, see how your strategy would fair. Then take it to paper trading, then start with like $500 dollars on robinhood to get a feel for actual money. I can tell you when you're using a tiny amount, a tiny loss or a tiny win will still feel about the same.
I also have a list of books I've found really helpful.
And finally, this is my progress on a few strategies as of late.
So I can personally attest to the fact that if you try, really dedicate time to it, its possible to be profitable. Hope this helps!
>Should I Learn From Online Article Or Books?
In order of most useful to least (imo, but still useful)
I would, in all honesty, just give trading a try. Go to tradingview.com and paper trade for awhile, see how it feels, try to find out what seems to be a good strategy and what seems to not be a good strategy.
To go with this, I've made an article awhile back:
What you're going to want to look for is an "edge", since trading is a 50/50 game, you want to edge the odds to your favor. Next, you'll want to work on risk management. Starting with 1:1 isn't too bad.
After you've just messed around a bit, I would look into learning more about broader theories.
Here are some books that could help with that:
Lastly, this is what I've been able to do after thousands of hours of work. You want to focus on %'s. If you can 1% $100, you can do it with $10,000.
I posted my trades live, just so people know I'm not pulling everything out of thin air :) being consistent is possible, just takes a hell of a lot of work.
Do you have an edge? You mention you've been trading for 2 years, so I'll assume you do (but its ok if you haven't nailed it down).
Basically, you just take your edge, write it into python (or whichever language you want) and get it to generate a buy, sell or close signal. Once you have that down, just use an exchange's API to place your orders.
I do have a channel dedicated to this stuff, but at this point I think you're probably a bit more advanced than total beginner, it still might help you out though :)
>what to learn/focus on & recommended resources: math, programming, strategy creation?
For me I've found that, programming wise, its never really that complicated. Sure, if you're going to be using some ML or advanced data analysis or something you might need to sharpen your programming but at least for me, the best resources I found had to do with market psychology and understanding the broader markets and trading in general. Some books I can recommend there are:
>process beginning to go live: collect data, write code, test code, start trading?
In simplest terms (this is how I do it), get data via websocket, feed it into your algo, have the algo generate signals, use (write) another program to use those signals to trade. I find splitting up the risk management, buy, sell and close into different parts helps. I would also back and forward test too. Essentially that's all there is to it. 99% of this stuff for me at least is optimizing my algos and trying to run them on multiple markets. The programming behind them isn't that complex, its the math and theory.
Its not terribly impressive but this is what I was able to do with some algos recently:
even today I got one in:
but really, there's ppl out there that can do much better. I'm pretty content with my algos performance. I thought about tweeting every position once upon a time but realized since I'm not shilling some stupid course I don't have to really prove anything other than I'm not pulling stuff out of thin air lol.
I would definitely do forward testing though, whatever you do. Perhaps even add a human element to manage the risk at first. Just get the edge down and go from there, good luck! :)
>$250 into $5k
Setting goals isn't a terrible idea, however I will say that a 2000% (non compounding) increase is something the best traders would give their arms and legs for lol.
For reference, this is something I was able to do after lots of learning and experience.
These were more done algorithmic than manually trading BUT point still stands.
With that said, you could hit 180% gain in one day with options.
The problem you'll find is that being consistently good is really really hard. What you're essentially setting out to do is consistently win an near random "coin toss".
That's going to take a psychological toll, its going to be grueling but not impossible.
>But I would like to learn the market. Any tips on how to start? What should I start researching? Can I even start trading with that little amount?
$250 is fine starting out. In fact its perfect as starting out there's a possibility you could lose it all, so starting with a small amount is fine.
Don't look at $, look at %. If you can make 1% you can make $100 or $1000. Once you consistently hit %'s, you can increase your position sizes. Keep risk in mind while doing this though.
I would start with paper trading first. Since you're 17 you're not legally allowed to trade. Also, with $250 you can't day trade (PDT rules). So paper trading would definitely be your best bet.
You could also give crypto a try, many exchanges don't really have KYC. A lot of the basics can carry over into any markets.
As far as stuff to learn, these are some of the best books I've read on the subject. You may notice they aren't technical or any "strategies" so to speak. I find those books never help, the mindset and thinking is going to be your biggest challenge.
Also, if you're interested in algo or strategy creation at all, I have a youtube channel dedicated to helping beginners make their strategies and learn more. Its on a bit of a hiatus but I'll definitely be getting back to it soon.
DM me here or on twitter if you have any questions! Love to help, questions also keep me on my toes and make sure I'm learning too!