DIY AT HOME - How to Trade for a Living +++

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Trading is something you've decided you want to do. Maybe you have grown weary of the endless treks to the office, or you want to see the world. Whatever your reason, hold on to it - you will need it on this road.

Trading for a living is not something taken lightly. A salaried job has a guaranteed outcome, and to trade for a living, a trader should consistently arrange an assortment of data and variables to get as close as possible to a 'guaranteed' or foreseeable exit. A successful trader must be able to monetize data. To do this, a trader must have an edge, or 'Alpha,' one that is both discernible and quantifiable.

Trading is the greatest equalizer. It does not recognize or respect any of society's stratification, or seemingly limits. It cuts through them. It does not matter what you look like, your social status, age, height, weight, nothing. If you can read the data, if you have "eyes," the world is your oyster.

Lets look at the sobering numbers: 7 out of 10 traders, rich or poor, old or young, handsome or missing, will end up in failure in 12 months or less. It may end with the MOAL (Mother of all losses), or by 1000 cuts (stopped out, stopped out, stopped out.)

Why is it year after year, decade upon decade, these percentages have not, for the most part improved? We have made progress in just about every other field of study, yet somehow, these brilliant minds never seem to get it right in trading. Why?

The chief cause is this: The average trader does not know how to read a chart, sans any technical indicator, to find, with the required supporting logic, the entry either long or short, of professional money. To be able to perform this feat would shift the balance of power, because now a trader can enter the market at wholesale price levels, an area completely off limits. Indeed, it would reduce the number of cows for slaughter.

To trade for a living, to cross that threshold, in our view, is to engage the markets without fear or mystification. You understand what is occurring, or not occurring. You are not in a rush, because you know:

• The mindset of professional money
• The weakness of professional money
• Their requirements of the public
• The visual patterns, the bar types, that identifies professional money as they enter or exit the market.

You have connected this to a visual framework. You can read. You understand that the professional segment does not day trade or scalp, as they have massive amounts of capital to deploy. You realize that the move does not have to occur in the next 10 minutes to remain valid. To achieve this, you have to be shown the correct 'setup.' A great analogy is Formula 1 racing.

F1 is the pinnacle of motor sports. The cars are technological marvels. What makes a great driver is his ability to setup the car. To communicate with the engineers exactly what is needed; more down force here, producing more or less oversteer, weight and balance, a mm here or there. Some drivers do not know how to do this.

So, when you decide to trade, open the account, download the software, what is your setup ?. What is your channel settings?

Will the bars be OHLC, candlestick, Renko, or Market profile? Will it be tick, time or range data? If ticks, how many ticks? If time, what time frame, or frames? Will the two be used together or just one?

What discipline or philosophy will you embrace? Momentum or support and resistance? Fibonacci retracement, Elliot wave or maybe Gann Geometry? And last but not least, will you trade stocks, futures or options? Will you scalp, or position trade?

Yet still is what technical indicators will be used? Will it be the usual, committing you down the same, heavily trodden path? It may seem exciting, as you learn about that new technical indicator for the first time (a Stochastic!), But I assure you, legions of traders, now gone, have done the same.

All of these must be learned to either embrace or discard them to arrive at the setup. And then this must be traded again and again to determine its validity, to arrive at a 'setup,' in which you are confident.

Precious amounts of time can be saved if every trader is given this mandate: Their 'setup' must be able to show where professional money enters the market, to be able to point to it literally on the chart. Then, one can begin to search in a guided direction, and not languish in the purgatory of technical indicators.

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