• Australian (ASX) Stock Market Forum

Introduction and Plan

Discussion in 'Beginner's Lounge' started by History Repeats, May 22, 2012.

  1. History Repeats

    History Repeats

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    Currently an Uni student, double degree: applied finance and accounting.

    Aim: professional trader

    Products i like to trade:

    -index futures
    -bond futures
    -STIR futures
    -stocks

    (Have not decided yet which one i like to focus on)

    Here is what i have constructed for myself. A multiphase plan before i graduate in 2 years time.


    Phase 1: Research, reading, taking notes and trading plan ( Expected time length: 3-6 months, no pressure will take as much time as needed till i understand everything )

    - Research

    Continuous research, on various subjects. ( such as supply/demand (S/R), market auction theory, volume analysis, market profile, risk and money management, Target markets & trading hours, CME education

    - Reading ( No book will teach you how to trade but none the less there are vaulable information to be gained )

    My reading list:

    * Reminiscences of a Stock Operator
    * High Probability Trading
    * One Good Trade: Inside the Highly Competitive World of Proprietary Trading
    *Technical Analysis Of The Financial Markets
    *Japanese Candlestick Charting Techniques
    *Trade Your Way to Financial Freedom
    *The Futures Game
    *Trading and Exchanges. Market Microstructure for Practitioners
    *Tape Reading and Market Tactics
    *Trading In The Zone
    *How the Futures Markets Work
    *The Disciplined Trader
    *Trading STIR Futures: An Introduction to Short-Term Interest Rate Futures
    *The Treasury Bond Basis
    *The Eurodollar Futures and Options Handbook

    - Taking notes

    On some books i will read it more than once and taking down notes that are useful to me and used in my trading.

    - Trading plan

    Put together all the puzzles from my research, reading and notes to come up with a trading plan.


    Phase 2: Intermarket analysis, Daily trading diary, Sim trading ( Expected time length: 3-6 months, fine tune everything i learnt )

    - Intermarket analysis

    *Read news everyday from Financial Review for domestic and Bloomberg for international.
    *Use my knownledge from phase 1 to observe, analyse and quanitify my target market by using historical and real time data on different time frames.
    Rationalise everything.
    *Adding real-time news into the mix and see how it affect my target market. ( try to understand each news piece and gauge the affect, take notes what happend after news )

    - Daily trading diary

    Record daily activites relates to my trading

    - Sim trading

    Start sim trading. Review performance each day ends.


    Phase 3: Final touch, Live trading

    - Final touch

    Fine tune my trading plan

    - Live Trading

    Start trading



    Misc:

    On Continuous base through out all the phases i will try to improve skills on:

    - Excel, VBA and macros
    - Maths
     
  2. History Repeats

    History Repeats

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    I have started my plan before i wrote my blog. Here's some update.

    - I have finished reading "Reminiscences of a Stock Operator".

    My thoughts:

    Easy to read and enjoyable, finished in 2 days. About to start my 2nd read for note taking purposes. Valuable information scatter across various places in the book. I did give 4/5.

    - I have done a lot of research on various subjects that i mentioned in my introduction blog. And here's some of the things i noted down.

    At this stage i have narrowed down to index and bond futures. From my research majority of people suggested to focus on one market only and try to understand the in and out ( characteristics ) of that target market. The reason i why choosed two as follow.

    I have defined my style/strategy that be intra day trading/scalping using simple tools such as supply/demand analysis, support/resistance, price action, volume analysis, time&sales and using DOM. I will not be using any indicators as most of them if not all derivative of price. I try to keep it simple as possible. When i start sim/live trading index futures i will use the simple tools i mentioned plus DOM and with bonds futures i will use DOM only.

    Only course it is easy to say on paper than actually doing it. According to my research, for example: to master the skill of reading DOM would require any where between 7+ months to never. Why never? simply that particular trading style not meant for everyone. That is why i included other trading tools instead of pure DOM reading.

    So i think by trading in index and bond futures will help me improve on all the skills/tools i mentioned above.

    - I feel i already benefited from this journey.

    1. My time managment has increased dramatically. As now my days are packed with uni, homework, and trading development. Also i'm looking to find a job. I some what miss procrastination and be lazy...:rolleyes:

    2. In order to achieve what i want to achieve i need to be in top condition both physically and mentally. So recently i joined a gym and changed my diet.

    Well, that's what i have done so far. Definitely not going to be an easy journey as number of trading journals i have seen from Aussie stock and various other forums.


     
  3. AaronPerth

    AaronPerth

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    hey mate, just commenting to say ill be following your journey, as i also have an interest the possiblity of trading as a career.
     
  4. History Repeats

    History Repeats

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    no worries
     
  5. Ambitious Trader

    Ambitious Trader

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    Cool post, I'm also at uni and studying a business degree.
    Would you recommend a particular degree for stockbroking / investment banking i.e commerce with a major in finance?
    Look forward to more blogs :D
     
  6. peter2

    peter2

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    IMO you should take stock of your resources and trade within your limitations while working to expand them.
    Your main resources (assumptions only):
    Knowledge: Minimal.
    Trading Capital: Minimal.
    Time: Minimal.

    Your probability of success is also minimal. You must understand that this is a very hard career to succeed in. It's nearly impossible! To succeed, you must have the belief in yourself that you can learn and do whatever it takes to develop the essential trading skills. No other career in the world will test you as much as trading.

    Your easiest resource to expand is time. You have to allocate more time to this prospective career. I see that you are spending time reading which is an essential first step. You can spend years reading before feeling ready to trade but this is not an efficient way to learn trading skills. I suggest you split the small amount of time you have between education and looking at the markets (charts). You have indicated a preference (without any reasons) for intraday trading. Allocate a period of 1 - 2 hrs / day to spend watching a market. It would be better to watch the first two hours of a major market session. I would suggest the first two hours of either the UK or US sessions. This might become boring unless you are also reading about intraday trading techniques. Match your education topic to your current trading preferences. Now, try to apply the strategies you're reading about to the markets you are watching. Try out as many of the ID strategies as you can. Observe market movements, observe repeating patterns, take notes. Now you're really starting to work in a focused way.
     
  7. History Repeats

    History Repeats

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    Hi, you really need to do more research as stockbroking and invesment banking totally different, not to mention there's different position with in invesment banking.

    Have a look at:

    http://www.wallstreetoasis.com/

    As for the blog, Thank you. I'm not really the writing type, so i try to get straight to the point as possible.
     
  8. History Repeats

    History Repeats

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    Hi, i greatly appreciate your input and advise.

    Now to answer some of your points:

    1) The only real resource i feel i'm lacking is knowledge as in real trading. As for trading capital i can work and for time, i think that will be my main advantage. Since, i'm not looking to make any money ( as i want the experience ). My number 1 goal is to preserve capital.

    Perhaps, i should make it clear that i'm want to work for institutions. In affect using the experience on my resume. But, i'm keeping my options open if down the road i do decide to trade for myself rather than working for an institution.

    2) I am under no delusion that this is going to be walking down the park. I think i have done enough research around various trading forums to know how hard this will be. As i have looked at numerous trading journals, seeing how taxing both physically and mentally.

    3) Agree that reading books won't teach you how to trade, end of the day screen time is all that matters. And, yes i already have a plan for that. Having downloaded Ninjatrader and using kinetick datafeed for free EOD future datas. I will definitely do what you suggested, but that will be in Phase 2 of my plan.

    4) As for my "preference (without any reasons) for intraday trading" is has to do with my career goal, i want to become a trader for a major institution.
     
  9. History Repeats

    History Repeats

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    It's that time of the year again uni exams. Recently, i spent marjority of time studying for my exams. But still kept up with my plan and here is "update 2". BTW, good luck to those having uni exams.

    - I'm reading too much books and it's useless, plain and simple. I even mentioned in blog that "no books will teach you how to trade", i don't know why i am still doing it. On my first blog i listed the books that i felt were important but i also have other books which not mentioned. So to rectify this problem i'm going to reevaluate the books i'm reading. And the theme i'm looking will be: basic FA, market structure and fundamentals of trading.

    - If you recall i said i want to trade in index and bond futures. Well scratch that, once again i'm not following myself as i said "i want to focus in one market", also to keep it simple and master one market before another ( really need to keep this in mind as you can see i double crossed myself in reading too much book and trade in 2 markets).

    So i narrowed down to the following list:

    * Euro stoxx 50 (Why: low tick value, time zone, good place to practice)
    * Bund (Why: same as above)
    * SPI200 (Why: only reason would be i don't have to change AUD to EUR)
    * Aussie bonds (Why: same as above)

    I have much more research to do with the above instruments, which i will do after the exams.

    - Once again i failed to keep it simple, this time the trading tools. Now i will only use s/r and price action (dom and t/s). The important thing here is price action and that brings me to another reason to learn aother than keep it simple.

    In essence, i believe it's the fundamental of intra-day trading or foundation if you will. A good analogy to learning math. For example, there is no secret to become good at math you need 1) practise and 2) soild foundation. In this case price action equal soild foundation, i mean you need to be at good operations to be good at algebra then soild at algebra to be good at calculus...ect and then you might add other tools to help you complete in your trading.

    - Excel VBA Programming For Dummies, great book for first time learners.

    - Currently i'm reading Tape Reading and Market Tactics
     
  10. History Repeats

    History Repeats

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    It's been a while since my last update. Well i'm done with exams and now i can turn all my attention back to learning trading again.

    PS: for those interested ASX share game 2 registration open on the 5th of July.
     
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