Digital Wall Street Home » Investing The OVBE Way » The Way I See It » How I Became Profitable Trading Futures

More from Mr_OVBE

  • 0 comments, 0 likes
  • 0 comments, 0 likes
  • 0 comments, 0 likes


Social Share

How I Became Profitable Trading Futures

View current stock details, or search for more

Temet Nosc,

Many investors began their journey and struggle, especially if they have not read a book, taken a course, or had a mentor. It is very difficult to know where to start, let alone be successful. All of the things I mentioned have an expense, whether it is in the form of currency or time. You must decide which one is more valuable to you. You must also decide if you would rather pay for someone to teach you what they have learned, rather than reading books and discovering the information on your own. How you get the information is up to you, but you will never be successful until you have the right knowledge to achieve your mission. The mission you are attempting to accomplish has already been completed by other people, and they probably documented their success in a course or book. All you have to do is look, seek and you shall find. Seeking and validating the right information is a part of the journey, so be careful with your time and money, and enjoy the process.

However, if you are like me, then you probably want to figure things out for yourself. Which also means, that you are willing to fail to become successful. Having that mentality does not mean that you are not open to suggestions from other traders, it just means if other people have figured it out, then you are confident that you can figure it out too. That is exactly the type of mentality that is expected from a Red Pill Brigade member.

So to get started, you need to learn the basics. I would recommend reading the technical indicator sections of Fidelity, Thinkorswim, and Tradestation. You need to find indicators that display the information in a way that you can easily interpret. Research the type of candles you like, be aware of the bullish and bearish candle stick patterns, and understand what supports and resistances are. My favorite candles are the Heikin Ashi candles and because I focus on trend reversals, I like to focus on the doji and inverted hammer candle patterns. There are many candle patterns, so try to pick the patterns that fit into how you plan to trade.

The next step is to pick your favorite stock or futures for analysis. I like analyzing futures because I like the volume, so if you analyze a stock, be sure to analyze from a higher time frame of a day or more. Open a chart with your candle type, and add some of the indicators that caught your attention. As you add different indicators to see how they work as well as the information they display, I want you to focus on three things: price, trends/reversals, and market direction.

For price, you need to find indicators that try to predict or give you insight into where the price is headed in the short term, as well the ability to see price fluctuations. Such an indicator will prevent you from buying when the price is likely to go down and shorting when the price is about to go up. To point you in the right direction, you should start with an indicator called the Price Oscillator.

For trends/reversals, try the Awesome Oscillator. The Awesome Oscillator will give you the ability to quickly know if the trend is bullish or bearish, the strength of the trend, and insight into if the market is working towards a reversal. During a bullish trend, you might want to trade only into the bullish reversals since the momentum is trending that way. Either way, identifying the correct trend and being able to anticipate the reversals should be the foundation of your strategy.

When it comes to identifying the overall market direction, I would suggest identifying supports, resistances, and drawing trendlines. However, for some that can be time consuming and difficult to combine with other indicators. So indicators such as the MACD or OnBalanceVolume Modified, may fit better into your technical analysis strategy. Overall market direction indicators will provide confirmation and give you confidence in your interpretations of what you think the other indicators are showing you. Your short term strategy may not be affected as much, but your swing trades will only be successful if you can accurately identify the direction of the overall market.

There are hundreds of indicators and finding the right ones will take some time, so be patient. In addition to identifying indicators that you like, you will need to test them in a simulator to ensure that they provide you with the information you need to quickly enter or exit your trades. Make sure you download the indicator descriptions in a PDF, and keep a folder for future reference. It would also be a good idea to create a word document and annotate your observations for each indicator as you learn how to trade with it. Creating that habit will allow to have the information on hand to write a book in the future about what you have learned. It seems like an easy task, but many people do not take the time to document how they learned to trade, so your notes could potentially be sold to give beginner traders a starting point.

In conclusion, I have completed everything I have suggested for you to do. It was a long road to becoming profitable, but it felt good when it all clicked. It took about 14 months to research and test at least 100 indicators, but it was worth it. Going through that process allowed me to intimately understand the indicators as they were created, but also gave me enough knowledge to be able to create unique indicators based on indicators I liked. If you really are dedicated to becoming a successful trader, then do the hard work the 1% does and recognize that the only thing holding you is YOU.