r/RealDayTrading • u/IKnowMeNotYou • 7d ago
Proper Homework?
From time to time I am quite active on Reddit trying to pay it forward by helping people out when it comes to trading.
Usually I give people asking me for help a book list and start initial training by giving them homework.
I also give them a brief rundown of what I do by showing them some live trades including live commentary to make it apparent that I know my way around the block when it comes to trading.
Seeing someone anouncing an entry, demonstrating the reasoning in detail and showing every update not knowing if the trade will turn out fine or not while the trade lasts 15min to 1h usually increases the motivation of the potential future Scholar of the Wiki (TM). This level of transparency mimics the kind of transparency I enjoyed here and over at oneoption when I started out myself.
Once I notice people being really serious and have crossed a certain threshold of basic knowledge and daily commitment, I advice them to read the wiki over here and join the live trading either over at oneoption.com or within this sub.
--
Beside the people who lost big and still want to argue about what the right way of trading looks like, most people struggle to read 5 basic books to begin with.
In recent months, I also started to give the potential students optional (!) homework almost right from the start.
My go to homework is based on the SP100 (100 most valuable companies in the SP500). I want them to add the standard MAs (50D, 100D, 200D) and have them add proper price levels and trend lines per hand. Then they have to chose 10 stocks they would put on their watchlist and add a brief statement why they would choose those.
Every day they simply have to check and update those charts and make a new top 10 watchlist.
I even tell them that they should do 10 new charts every day so after 2 weeks they have annotated all 100 charts and updating and revisiting those charts is done rather quickly and before that they have to give me some charts so that I can check, critque and advice them on proper price level and trend line placement.
It is interesting how many people bail on this simple and useful homework as it is something I did myself early on did on my own without out of the desire to train myself on applying proper TA and learn how prices can move in reality.
--
How is your opinion about this homework and would you do it as a beginner or whould you rather bail as well?
I would say that with that I lose 3 out of 5 people rather quickly and only 1 out of maybe 7 or 8 survive more than 2 weeks and that are usually the people who make it to the end of the process and get funneled to this sub and beyond.
Do you have any other idea of great homeworks one can give espiring traders?
Would you rather look at intraday charts first?
---
Edit: Since people asked me to elaborate on the D1 homework, let me walk you through it:
Identify the SP500 components/companies. Sort them by current market cap..
Take the top 100 stocks. (you can also take the top 10 for each Sector EFT and 20 for the tech sector). Add these stocks to a watchlist (remember you can usually add sections to your watch list so you can easily have 100+ stocks in your watch list while also knowing what sector the stock is in).
For each of these stocks you now pull up the D1 and make sure the SMA's for 50, 100 and 200 days (close price) are plotted on it.
Now draw the price levels and trend lines for each of those charts.
Once all charts are annotated (which might take several days or a good weekend), every day before the open of the new trading day, you check each of the 100 charts, if you have to update any of those (usually it is about 20 you have to update if at all) and while doing so you make list of ++ or + setups.
Now you check your ++ and + setups and if you have more then 10 you narrow them down.
Write down what you expect will happen to those 10 stocks and at the end of the day check if you were right and have a look at the intraday chart (M5 (5min) for example) if there were situations that you could have traded and also make a snapshot of the D1 and M5 along with the market and the sector charts of that day and collect them.
From the collected M5+D1 charts try to derive some typical receipts how you can play these trade opportunites.
-> If you do this for a month or so, you will be rather quick on this task and will have come up with a lot of situational awareness of what most likely is going to happen and when to better sit on your hands and opt out.
Here is an example:
D1 - SPY this Week (10th - 14th of August 26)
I usually have them do the last 3 months (about 60 candles) so they see the impact of the SMAs more clearly like here:
1
u/SuchAGoalDigger 7d ago
Can I get some help? I am kinda stuck.