Definitely one of the worst mistakes I see newbies make. Undercapitalization. A Nice 10% return is hard if you have to make 30 trades at like $8 a trade.
Tradezones, I went over to the P/L journal looking for your nick and guess what, I could not find it!
There are two paths to successful trading: the linear way, where you apply computer power, statistics and probabilities to come up with an edge and exploit it with a lot of capital. Sophistication taken to the extreme, as with a hedge fund. Here, traditional, measurable brain power is the key. The second way is the non-linear way: simplifying things, studying patterns, applying intuition and modifying your personality to handle risk and do the opposite of the crowd (when it pays). Here non-measurable intelligence is the key (intra-personal intelligence, spacial intelligence). The linear group thinks the non-linear people are liars and frauds and want to see statistical proof of their success as they are data driven. The non-linear group thinks the first group is a bunch of light in the loafers dweebs who could not make a dime on their own without the backing of rich sugar daddies who fund their operations. The success rate of both groups is probably the same. The 95% who are in between these two extremes are the ones who lose their money through friction (fees, commissions etc.) and to the people in the two groups.
Yes every trade is new and unique, but set ups reoccur daily. Similar situations occur everyday and the details change. A trader blows his account out because he doesnt have a valid blowout point. I dont see the value in your post. If you are a trader that shoots from the hip and piles on a position without regard to what the market is telling you and just keeps doubling down, then yes you will blow out, but isnt that obvious?
I read somewhere that if you are a trader and have been making a living for atleast 10 years doing so, then you are among a group of only 2%.
Do people really post p&l journals on here and how do you know they are real? I barely have the time to spend with my family and do my own research. I would think only someone paper trading and trying to sell a system would be posting a p&l journal. Those who cant do talk and those who can do say very little about it. Besides, personally I dont need any validation. I just post my thoughts and ocasionally see someone elses that I feel are worth reading and sometimes I throw a question out there. Thats what I use this site for, not trying to sell myself to a bunch of forum handles.
If you have success after success after success because as a seasoned, savvy trader you've seen certain things happen again and again and again, you may begin to feel incredibly smart and confident. You may begin to use margin and hold overnight positions because a certain pattern that worked 103 times in the past just set up again and you want to catch a whole lot more of the move than you did last time. You may find yourself facing a rare event that wipes out your account. This happened to an extremely successful trader of my acquaintance on October 19, 1987.