Redneck
Registered: Dec 2008
Posts: 2359 |
02-12-10 09:28 PM
Quote from trendo:
I got the opposite meaning out of Redneck's post. Guru-isms that don't work as advertised. Redneck please clarify.
Trendo.
Yes Sir I will… and Yes Sir you are correct about my meaning
A bit of background first
We make the most amount of money by sitting on our hands – either on the sideline because we are not getting a clear read for an entry… or when we’re in a position making money
Obviously if we are in a losing position – we must get the hell out of dodge
Having patience and calmness while trading with deliberation, purpose, and intent – is absolutely paramount for proper trading
Furthermore – having framed up and clearly define trade parameters is also paramount
Specifically why we will get in
Specifically when we will get in
Specifically when and where we be wrong and get out for a loss
And when one gains more experience – where we should be looking to get out with a profit, or at least lock in some profit and reduce our position / exposure a little
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Newer traders – lack all the above to one extent or another – and for the most part trade like nervous nellies – which imo is why they move their stops too soon in the first place
By us (the experienced traders???) telling someone to take half off once price moves in your direction – does what – just makes them more nervous and more jumpy/ froggy
Take half off where… when….under what circumstances…
Who knows because we can’t read their mind, we don’t know what they’re trading, we don’t know anything about their methodology…
But I’ve seen this advice being handed out like it’s some sort of miracle cure all… And after thinking on it – imho it actually (subconsciously) causes a trader to become more jumpy and more nervous – because…
By taking half (or whatever) off as soon as price moves in our favor (and I still don’t know exactly what that means) – we are admitting (at least subconsciously) that our position is weak at best.., and/or “will” fail at worst – But the truth is we never know what price will do – so why not sit patiently allow price to show us its intentions.
Also by taking half off I believe a newer trader ends up jumping in / out of positions (racking up commissions), chasing price, and chasing their tail – all of which acts just like a negative feedback loop – so instead of curing the problem – it’s really reinforcing it.
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Bottom line;
Every trade we place – we must do so for a specific set of reasons
And by placing a trade – we completely accepted the fact we may lose that money
We know exactly where we will be wrong – hence we have a stop
And once we enter – we must simply sit on our hands and let the play work itself out – win, lose, or draw
Hence we must always trade with patience, calmness, deliberation, intent, and purpose – while remaining within our clearly defined set of parameters – never like some frog in a hot frying pan
And please remember this is for newer traders – experienced traders already have a rhythm and methodology – they can scale it/ out, add to/ take off, fade/ buy... etc.. etc.. etc… because most importantly however they trade…
They absolutely have the patience and calmness – to trade with deliberation, purpose, and intent – while remaining completely within their well defined parameters
Apologies for being such a long winded SOB today
RN
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