Questions from noob about trading from home!

[Aussiest]

Hi everyone,

I've been perusing these forums for the past few weeks and i must say, there is some good collective wisdom here ;)

I have some questions you might be able to help me with. Nothing too strenious, just technical stuff:

In relation to trading from home...

1. How many computer screens, and what size, should i have?

2. What would i typically use those screens for (eg, one for charting, one for platform, one for news)?

3. What is the best trading software?

4. What does this software typically do? Would i need to subscribe to ASX 'end of day' data? Can you keep the data so you can chart later?

5. If you use a premium trading platform (I am considering MQ Prime), is there any point in having trading software?

6. Which share trading course would you recommend? (they are all so expensive, don't know whether i should lay down my $$$)...

7. Is it possible to do well / trade profitably without doing an education course?

8. What is your hottest tip?! Only joking about this bit, but it would be great to gain some insights on the other stuff ;)

Many thanks in advance

Aussie Trader

[professor_frink]

Hi everyone,

I've been perusing these forums for the past few weeks and i must say, there is some good collective wisdom here ;)

I have some questions you might be able to help me with. Nothing too strenious, just technical stuff:

1. How many computer screens, and what size, should i have?

2. What would i typically use those screens for (eg, one for charting, one for platform, one for news)?

3. What is the best trading software?

4. What does this software typically do? Would i need to subscribe to ASX end of day data? Can you keep the data so you can chart later?

5. If you use a premium trading platform (I am considering MQ Prime), is there any point in having trading software?

6. What share trading course would you recommend? (they are all so expensive, don't know whether i should lay down my $$$)...

7. Is it possible to do well / trade profitably without doing an education course?

8. What is your hottest tip?! Only joking about this bit, but it would be great to have some insights!

Many thanks in advance

Aussie Trader

Hi aussiest,

welcome to ASF. Glad you like the forum so far:)

The type of computer/charting package, etc you buy will depend on what type of trading you do. So you might want to fill us in a little more about what you are/plan on doing before you get any suggestions. Personally I have a desktop with 2 monitors for trading, plus the laptop for general browsing, emails, reading etc. Nothing flash.

Personally have never done a trading course. Most of my information comes from books, the internet and talking with other traders. I make enough money to buy the finest wines you can get in a box at the local bottle shop, so I guess you can do fine without having to do a course:)

And as for tips, be good to your mother!

[korrupt_1]

1. How many computer screens, and what size, should i have?




Check out the forum's resident grumpy day trader TremblingHand's blog on his setup ;)

http://tremblinghandtrader.typepad.com/trembling_hand_trader/2007/12/index.html

But as the professor said.. its really a personal thing on how you setup your station and how you intend to trade - Are you a day trader/scalper, short/medium/long term investor?

I have 2 x 22" WS LCD running my trading platform, multiple charts, news feed from bloomberg, etc, emails, general web browsing and online chat are just some of the stuff on my screens.

[Aussiest]

Hi Pro Frink :p:

I am strongly considering trading from home full time. Going for jobs at the moment, but none seem to be working out. Am very tempted to get job in hospitality so i can trade Aussie Stock Exchange during day, so my question mainly relates to trading on the ASX on a full-time, daily basis.

I've already got two screens and my computer died today (briefly), so i missed some sell points, so i can relate to what you're saying about a laptop.

Now, if only i could hang on to positions longer to maximise my profits. I find i sell out too early, it's really hard!

Thanks,

Martine

[MichaelD]

In relation to trading from home...
(all the wrong questions culled)

BY FAR the least important factor for trading success is the equipment required.

If you can't trade profitably with a minimalist equipment set, buying the biggest screens and fanciest data feeds will only help you lose your money faster.

Why not use what you already have and use your trading profits to buy all the fancy equipment you think you need? Chances are that by the time you are actually profitable, you'll find you don't need actually need all that much.

[Aussiest]

news feed from bloomberg

This is what i need as well.

Do you find it directly influences prices on the ASX? Or do you mainly use it for commodities?

Can you use the Bloomberg data for commodities?

And, do you have to pay for the Bloomberg service?

(and thank you for link, i will definately check it out later tonight)

Sorry about all the questions,

Martine

[professor_frink]

Hi Pro Frink :p:

I am strongly considering trading from home full time. Going for jobs at the moment, but none seem to be working out. Am very tempted to get job in hospitality so i can trade Aussie Stock Exchange during day, so my question mainly relates to trading on the ASX on a full-time, daily basis.

I've already got two screens and my computer died today (briefly), so i missed some sell points, so i can relate to what you're saying about a laptop.

Now, if only i could hang on to positions longer to maximise my profits. I find i sell out too early, it's really hard!

Thanks,

Martine

Pro. HA!

I was mainly referring to what style of trading you plan on doing. When I was position trading, I only had 1 screen, as it was all I needed. I'd do my analysis at night, would check on what happened OS before the market opened and then would have live data running so I could keep an eye on things during the day. 1 screen was fine for this. These days I daytrade, so have the 2 screens full of charts/quotes and just use the laptop for web browsing and to keep the econ calendar on so I know when scheduled news is due. It's also useful as a back up if my desktop goes down during the day.

I can only gather that if you are thinking of trading full time that you've been trading part time successfully?

[Aussiest]

Hi Professor Frink,

Well, not successfully at start. I bought in at the beginning of the recent dead-cat bounce in April, had a good run, got greedy, used too much leverage, bought way too many stocks, didn't set stop-losses, got burned BIG TIME!

I am now taking small positions, diversifying sectors (some financials, some resources, eg), set stop-losses, something i still have trouble doing, and sell out before it reaches top. That's what i am having trouble with now. Because of my early losses, i sell out of winning positions way to prematuraly...

So, i wouldn't say initially successfully, but the past few weeks i've been a lot more careful, taking small positions, spreading my positions around, probably selling out before realising a good profit, but the first few months scared me. I have yet to take a 'short' position, so far, i've been relying on blue chips stocks that seem low priced and go long.

I'd really like to work full time and be a 'frequent trader', but if i don't get this job, i am tempted and would get a job in hospitality as a retainer.

[Whiskers]

Check out the forum's resident grumpy day trader TremblingHand's blog on his setup ;)



Glad you said it first korrupt... I get into enough trouble as it is. :o

But gees I laughed... I had been chatting with him today, trying not to aggrevate him or maybe it was because I was also annoying my cat on my desk by letting him have a sniff of a vicks inhaler and watching him pull faces. :D

Back on topic, actually I agree with MichaelD. While you obviously need enough equipment to do the job, one of the key aspects of successful businesses is to keep your costs under control. Be careful not to over-capitalise on equipment.


(all the wrong questions culled)

BY FAR the least important factor for trading success is the equipment required.

[Aussiest]

Yeah, thanks Whiskers. I've already got enough stuff in terms of screens, which is good. All i need is the laptop and perhaps some software, but am wondering if professional set-ups like Comsec and MQ Prime eliminate the need for that?

Am also curious about the iphone and Comsec platform, but i think that's a question for another thread ;)

[Trembling Hand]

Check out the forum's resident grumpy day trader TremblingHand's blog on his setup ;)


Ha! LOL. Love it.


but am wondering if professional set-ups like Comsec and MQ Prime eliminate the need for that?


Most important piece of equipment is trading capital. Buying equipment before your business can fund its own way is a bad idea.

And Comsuc isn't a pro platform.

And news feeds will just tie you in knots.

IMmostHO

[Aussiest]

Thanks Trembling Hand. Are you grumpy today? Shouldn't be, the markets weren't that bad :eek:.

I've already got 2 screens from when i did music production. I was thinking of scaling down the 19" and getting 2x17", but i think i'll stick with what i've got, thanks to some cost-savings advice here :p:.

I will still get the laptop, a < $1,000 Dell job should do the trick, or a 2nd hand no. from Ebay...

The most important thing is charting software. So far, i've been getting course of sales data from Comsec and putting it into a SS. Not good enough.

Any suggestions?

[korrupt_1]

Aussiest

I think you are going about this the wrong way...

What's wrong with your current setup? Is your hardware not sufficient for what you want to do? Are you missing out on potential trades because the information wasn't easily accessible?

Do you think by having the fastest computer, with the largest screens and live up to the second data makes you a better trader?

Does Greg Norman win the golf because he has the best clubs and balls? No. It's about his skills and how he copes under pressure...

My suggestion is that you should read books from successful traders. They give you an insight into their psychology and how they think - IMHO, trading is 90% a mind game...

[white_goodman]

can someone explain to me the idea behind 2 monitors?

whats so hard about minmising and opening another window on the same monitor?...ive always been confused by this

[professor_frink]

can someone explain to me the idea behind 2 monitors?

whats so hard about minmising and opening another window on the same monitor?...ive always been confused by this

when you are trading small timeframes, have 4 or 5 charts open, and 2 DOM's that you are entering orders on and adjusting up to 20 times a day, having everything laid out across a couple of screens is essential.

Apart from that it becomes a convenience thing too. If I'm reading a pdf and want to take notes on it, I can have the book open in one screen and a word processor on te other where I can copy bits of text and make notes on it. Once you've used more than one screen, you'll most likely find it hard to get by with one without being frustrated.

[MichaelD]

Most important piece of equipment is trading capital.

Hear, hear.

And the second most important piece of equipment is a POSITIVE EXPECTANCY TRADING PLAN.

Is your trading plan;
1. Written down?
2. Known to have a positive expectancy?

Or do you make it up as you go along?

[IFocus]

I will still get the laptop, a < $1,000 Dell job should do the trick, or a 2nd hand no. from Ebay...

Wouldn't worry about the laptop for now, depending on your broker phone access is maybe a better backup should your systems fail. I would spend the money on Amibroker charting software and Premium Data instead.

But this will depend as already mentioned on your method of trading which ideally you should have tested before entering the market.

[nunthewiser]

Keep your 57 screens and widgets attached too oojamaflips ....... personally use a laptop when not at home and my home pc when i am , oh also have a pencil , paper , ruler and calculator , often bring the crayons out when im really concentrating, know a bloke thats got 4 screens goin and yet he still losing cash by the week .... agrees with that other grumpy fella trembling hand about trading capital , wotever floats ya boats bur personally reckon less is more and i do allright :cool:

[Aussiest]

Thanks for all your responses, i truely appreciate them!

Thanks also for pointing out i don't need state of the art equipment. The set-up i have is enough then.

Just some more questions:

1. MichaelD:

I understand what a trading plan is. I don't necessarily have one, except to buy when i think a share is cheap (although i don't always follow it - see? that's where i'm going wrong) and to sell when i think i have enough profit. I am currently closing out far too early due to fear and anxiety. Perhaps i need to tackle that in the plan... Tonight, i am going to write out a list of lessons i have already learned.

What is a positive expectancy? I think i'll Google it later, but some insight would be good :)

How would i formulate a trading plan?

Eg: (example purposes only): buy at support, quantity either 500 or 1,000. Stop loss at % loss, min. profit = xx% gain, use trailing stop loss at % under current price???

Is this about right in terms of what i would write?

2. IFocus:

What is 'Amibroker' charting software? And, where do i get the premium data?

Thus far, i've been using Comsec's market depth.

Thanks in advance for your advice :)

[MichaelD]

Aussiest,

Do not take this the wrong way but

STOP "TRADING" IMMEDIATELY

You are not trading. You are gambling. Gamblers lose.

If you are serious about making money trading, you have a long path ahead of you.

Tasks you must complete before you even consider trading again;

1. Learn what a trading plan is. It covers your entry strategy, your exit strategy, and MOST IMPORTANTLY, your risk management (where you will put your stop loss and how your stop loss evolves during the trade) and your money management (how much of a given share you will buy).

You might consider a book like Trading Secrets by Louise Bedford. This covers creating a trading plan quite well. You're also likely to find useful information on ASF and via Google.

You MUST know before you even start a trade what your exit strategy will be. You cannot make it up as you go along.

Contrary to popular belief;
- buy low and sell high is a poor strategy
- buy high and sell higher is a better strategy
- money and risk management separates the profitable traders from the gamblers, NOT entry and exit.


2. Learn what positive expectancy is. This is a high degree of proof that your trading plan will actually make you money instead of losing you money before you actually use real money trading it.

Again you'll find lots of threads on this here at ASF.


ps You could also continue trading and have the market teach you the same lessons at a FAR higher price than the cost of a few good books and lots of reading.

[Trembling Hand]

I am strongly considering trading from home full time. Going for jobs at the moment, but none seem to be working out. Am very tempted to get job in hospitality so i can trade Aussie Stock Exchange during day, so my question mainly relates to trading on the ASX on a full-time, daily basis.



I understand what a trading plan is. I don't necessarily have one,

What is a positive expectancy? I think i'll Google it later, but some insight would be good :)

How would i formulate a trading plan?




And people wonder why I am grumpy.:flush:

[nunthewiser]

LOL nah totally understand actually :) long live calling a shovel a shovel

[Aussiest]

Aussiest,

STOP "TRADING" IMMEDIATELY

You are not trading. You are gambling. Gamblers lose.



Yeah, i'm hearing you.

No offense taken, i promise.

Have Louise Bedford's Trading Secrets...

Forex, here i come.

Only joking :eek:.

[DennisTheTrader]

Hi Pro Frink :p:

I am strongly considering trading from home full time. Going for jobs at the moment, but none seem to be working out. Am very tempted to get job in hospitality so i can trade Aussie Stock Exchange during day, so my question mainly relates to trading on the ASX on a full-time, daily basis.
Martine

Hi Aussiest

Just keep in mind that if you're relying solely on your trading profits to pay for this weeks rent, then that could really influence the way you trade. ...in a very bad way

If you're in a job, and your trading system only requires a small amount of time in the day, then you could always trade during your lunch break? and ask the boss if you can move that lunch break to later in the afternoon or whenever you need to trade. All you would need then is a el-cheapo laptop and a 3G mobile to connect it to the internet and you're away.

[white_goodman]

Hi Aussiest

Just keep in mind that if you're relying solely on your trading profits to pay for this weeks rent, then that could really influence the way you trade. ...in a very bad way

If you're in a job, and your trading system only requires a small amount of time in the day, then you could always trade during your lunch break? and ask the boss if you can move that lunch break to later in the afternoon or whenever you need to trade. All you would need then is a el-cheapo laptop and a 3G mobile to connect it to the internet and you're away.

i keep an eye on my trades every day at work, i execute all my buy and sell orders the night before and keep an eye on the progress at work... its not hard , i suggest playing the market for atleast 5 years before attempting it as a full time income earner

[white_goodman]

And people wonder why I am grumpy.:flush:

its not you job to stop people from financial suicide...

[Aussiest]

Hi Aussiest

Just keep in mind that if you're relying solely on your trading profits to pay for this weeks rent, then that could really influence the way you trade. ...in a very bad way

If you're in a job, and your trading system only requires a small amount of time in the day, then you could always trade during your lunch break? and ask the boss if you can move that lunch break to later in the afternoon or whenever you need to trade. All you would need then is a el-cheapo laptop and a 3G mobile to connect it to the internet and you're away.

I have been reading up on "money management" techniques. Interesting about the 2% rule and money management. Michael is right, i have been gambling to a certain extent. I seriously need to review my strategy...

1. Determine entry point / price: trend, candlesticks, support levels, volume (not sure how this works yet), market news, economic data, overseas economic events, market sentiment (?), sector sentiment (?)

2. Determine risk level: how much capital prepared to lose (should do this first)

3. Determine position size: this depends on capital, allocate no more than 20% of my capital to any one trade

4. Determine stop loss levels (still need to research this, not strong)

5. Apply trailing stop losses (need to research, weak point)

6. Other things like estimated time in trade

It'll take a while to do, but i'll get there.

[korrupt_1]

can someone explain to me the idea behind 2 monitors?

whats so hard about minmising and opening another window on the same monitor?...ive always been confused by this

I use to day trade (scalp) on a single 19"... it was tough work sometimes with all those charts, trading platform, firefox, outlook, etc all overlaping each other.

Now on a dual 22", I can have 1sec, 1min, 5min, 10min and 1hr tick charts running simultaneously. It's amazing that this extra information at hand has given me the slight edge to be successful in scalping points off the index.

It really depends on your trading style... if you are like some of us scalpers, we can be in and out of a trade within seconds. If you're a positional trader where things move much slower, then yeh I agree with you, all those extra charts, windows, etc isn't necessary.

[Aussiest]

It really depends on your trading style... if you are like some of us scalpers, we can be in and out of a trade within seconds.

Can i ask you Korrupt, by being in and out within seconds, do you mean you buy large quantities using high leverage, eg, many thousands of XYZ share on a low margin?

[Paladin]

Hi Aussiest!

Like you, I'm trying to get my head around some of the TA fundamentals.

Trailing stop losses seem a godsend.
And yep, definitely spend some time working out the relationship between price and volume as indicators. This has really helped me make sense of trends. I'm actually playing by printing out charts from a few months back and making guesstimates of where the stocks will head, then comparing them with the historical result (as an exercise in pure TA, which I don't strictly believe in).

[Aussiest]

Well, the current market shows that you cannot rely on TA alone. Seeing how the 'credit crisis' and the U.S stock market has influenced ours is highly indicative of that.

It seems to me that news really does influence people's perceptions of the market, or makes them wonder about what others are doing, at the very least.

For example, bad profit report for U.S. bank. Everybody starts panicking. Investors pull out due to possible lower dividends. Traders realise this and hypothesize that other traders will pull out due to lower prices. So, as some traders pull out, prices drop, thus causing other traders to dump shares. And boom... you have the downward slide.

Really, the profit downgrade may not have been that bad, but we, as human beings, catastrophise everything. So, my point is, that news effects the psychology of the market. I am going to use a combination of technicals and fundamentals. News really does effect the market, it's incredible.

[Paladin]

Well, the current market shows that you cannot rely on TA alone. Seeing how the 'credit crisis' and the U.S stock market has influenced ours is highly indicative of that.

It seems to me that news really does influence people's perceptions of the market, or makes them wonder about what others are doing, at the very least.

For example, bad profit report for U.S. bank. Everybody starts panicking. Investors pull out due to possible lower dividends. Traders realise this and hypothesize that other traders will pull out due to lower prices. So, as some traders pull out, prices drop, thus causing other traders to dump shares.

Really, the profit downgrade may not have been that bad, but we, as human beings, catastrophise everything. So, my point is, that news effects the psychology of the market.

Absolutely. The irrationality of the market is such a big part. For my uninformed 2c - one needs to be on top of FA, TA and also mental analysis (of the self as much as of the market). A great book which I picked up on a recomendation here is "Trading in the zone" by Mark Douglas, which is entirely about the latter.

[Aussiest]

But, having said that though, sometimes news is just good luck or bad luck. If you're already in the position, there's not really much you can do about it. Perhaps the trick is to monitor what news is coming up, so you will buy with the knowledge that it can go against you or for you.

I'm still working all this mumbo jumbo out... It will be part of my trading plan.

Keep an economic diary too Paladin.

[Aussiest]

Absolutely. The irrationality of the market is such a big part. For my uninformed 2c - one needs to be on top of FA, TA and also mental analysis (of the self as much as of the market). A great book which I picked up on a recomendation here is "Trading in the zone" by Mark Douglas, which is entirely about the latter.

Ah yeah, thanks for the recommendation. That'll be next on my list.

Self analysis is definately important. I recognised a shortfall tonight and am thinking about it. Then i will work on it.

How about you? What do you think your limitations / shortfalls are? If you dare to tell :eek:.

[professor_frink]

Well, the current market shows that you cannot rely on TA alone. Seeing how the 'credit crisis' and the U.S stock market has influenced ours is highly indicative of that.

I don't necessarily agree with that, and I'm quite certain that there are more than a few here that use TA exclusively that are doing just fine trading off it alone.

Having said that, my trading hasn't gotten any worse as I become more and more familiar with the way the financial markets work outside of TA(and I really only know enough to be considered a danger to myself). But it could also be argued that it has just as much to do with the fact that I'm getting better at trading via TA that is the main reason for improvement. It could really be either, I dunno!

There is also the grey area where you start analysing related markets to a company you are thinking of trading, ie you could be looking to get long on a certain company here, and then turn around and also analyse the sector it trades in, and similar companies in the same sector the in different markets looking for any other information you can to help make a more informed decision. Still TA in that you are analysing charts, but not in the classical sense where you wake up and short BHP because of some weird named pattern you read about in a book has shown itself on the chart(which may or may not have something to do with how well you slept the night before or how much coffee you had that morning).


Absolutely. The irrationality of the market is such a big part. For my uninformed 2c - one needs to be on top of FA, TA and also mental analysis (of the self as much as of the market). A great book which I picked up on a recomendation here is "Trading in the zone" by Mark Douglas, which is entirely about the latter.

Have a look at Steenbarger's enhancing trader performance. One of the best books I've ever read, and one I now wish I had of read the moment it came out. You won't regret it for a moment:)

[Paladin]

Ah yeah, thanks for the recommendation. That'll be next on my list.

Self analysis is definately important. I recognised a shortfall tonight and am thinking about it. Then i will work on it.

How about you? What do you think your limitations / shortfalls are? If you dare to tell :eek:.

Ha! I dare tell.

Firstly, I'm being silly enough to enter the market (properly - like most I've had one or three obvious stocks in my bottom drawer for a while, but my interests have mostly been in property) at a stupidly bad time. I'm only doing so in a small way, though, really trying to learn at this stage.

I have the problem of EVERYTHING I read making sense in one way or another. So it's a case of trying to aggregate information, to make my own mental model, to try on different hats and find out which fedora fits me - again, as you rightly pointed out, made more complicated by the current market.

I have a little too much exuberance at the moment. I get really excited about new hobbies, and so I have to be really careful not to be too enthusiastic, and just to keep playing with a small pot (and strict stop losses) and trade on paper until signs are clearer.

Finally, ignorance. is a lot I don't know. Before I am able to take this half seriously, I need to learn a lot more (recognising also that learning on the market as opposed to from books alone can be valuable). This forum has been gold in that respect. My main challenge at the moment is trying to prioritise my learning, to accurately assess my knowledge gaps and work out which ones are the most critical.

[Trembling Hand]

(and I really only know enough to be considered a danger to myself)


Hah you sound like my old man!


Have a look at Steenbarger's enhancing trader performance. One of the best books I've ever read, and one I now wish I had of read the moment it came out. You won't regret it for a moment:)

Yes its a ripper. Not only that it bunks the Bullsh!t about trading being mainly psychological. From a trading Psyc!!

[martraci]

dont worry about your hardware, software is the important issue
you need enough power to run some GUI's not play games (but i would say bare minimum 1GB memory)
also internet bandwidth is the key, no use having a demon setup if you cant get your feeds streaming

[Paladin]

Have a look at Steenbarger's enhancing trader performance. One of the best books I've ever read, and one I now wish I had of read the moment it came out. You won't regret it for a moment:)

Cheers, Prof! I really respect your opinion from what I've read of your posts, so I'll nab a copy. Hopefully they sell it via the bookshop here :)

[professor_frink]

Hah you sound like my old man!

:eek:




Yes its a ripper. Not only that it bunks the Bullsh!t about trading being mainly psychological. From a trading Psyc!!

yep top read. Am just starting on it for a second time now. And am stinging for the 3rd to come out. Can't say I've ever really really been waiting for a new book by a trading author before!

There's an interview with him in the latest issue of YTE FWIW. Always good to read something from him. If you can get past all the Gann and CFD promo's that is!

[professor_frink]

Cheers, Prof! I really respect your opinion from what I've read of your posts, so I'll nab a copy. Hopefully they sell it via the bookshop here :)

Cheers Paladin:)

http://www.******************/default.asp?d=0&t=1&id=5203&c=0&a=74

[oldpos]

Aussiest,

MichaelD was correct when stating that it appears you are gambling and you should stop trading until you get your plan in order. I, and I suspect many others, started out like you, too eager to get started. You need to do your homework first. A TRADING PLAN IS ESSENTIAL BEFORE YOU START TRADING. I found it hard to put a plan together early on so I adopted Colin Nicholson's - his is laid out in his book "The Aggressive Investor" (www.bwts.com.au) - you don't need to accept his plan as your own but it's an excellent starting point, just shows what the academics put in their plan. And the book is a good read, one of the best that I have found on Risk Management which appears to be what you need to study. It has certainly helped me.

Moderator, I hope you dont take this as spamming. It's just what has helped me with my plan and the understanding of risk. There are many other good books out there though.

All the best.