What is your personal stop loss set at? $1.00? 3% below the 14 day low? 10% of the option cost basis?
Not exactly. If your seminar fraudster-friend had 4,000 posts here, his pattern of frequent lying would have become apparent to everyone a long time ago. Lies are like ants- find just one, and you know there are hundreds more of the little shits lurking nearby. In contrast, if you were to read enough of my posts, you'd recognize an obvious pattern of consistent honesty.
Thank you, that is an excellent idea. I started adding my emotions and thoughts into the trading journal.
That made a lot of sense. No, I don't use a trailing stop and now I'm getting flashes of myself doing over analysis, staring at the chart, and somehow convincing myself to take profit and run before it goes south. I think the little wiggles from price movement still gets me worked up, despite I KNOW that's how price moves. Not sure if it's originated from pure fear or a non-trading life issue, but it should become apparent in time with the trading journal. thanks again for the advice, much appreciated.
Becoming 'emotionless' is in fact becoming motionless or ineffective. Trading, like a number of other 'higher level' activities in life requires focus - extreme focus. And in order to be successful, extreme focus married with extremely quick execution skills can set you apart. Emotions are good... you have to use them, channel them into a state of focus; one should attempt to take their concentration to the next level by using emotions, not by trying to suppress them. From experience... It's kinda like pitching in front of 50K screaming fans. You don't just magically have the ability to do so once you're in the situation. It starts in the minors when mistakes are "permitted" (trading tuition) and emotions are running high. But at the same time, if you end up at that level performing, then your focus should have developed along side your physical skills. I would say it's akin to starting our with 500 share trades and then moving onto 10K and then to 50K and on. There is a push and pull that takes place in the developmental process. Your reasons for entering a trade are probably the same in all three cases, buy your ability to focus and execute need to be near flawless in the latter as opposed to the former where mistakes can be (once again) "permitted" to some degree IMHO
You're equating focus and decisiveness with being emotional. Focus and decisiveness, however, require just the opposite. When a decision is required, one can't waffle around with how he feels about it; he has to do it or not do it. LC
I suggest you look at posts 5 & 8 in the following thread: http://www.trade2win.com/boards/showthread.php?t=16681 LC
Let me chime in... (and note these ideas work well for my trading style. I'm no scalper. If you have 90% success rate on your trades, you can afford a little more leverage. For the rest of us, these rules are good). Its very simple actually. All of this talk of stops is great, but there is something else even of greater importance that needs to be mentioned. It fundamentally connects to money management. The way to prevent impulsive and undisciplined behavior on trades is actually easier than you think. It means reduce size. You should be able to let a trade breath to conform to your TA. Don't set your stops too tight, otherwise you're just asking to give money to the market. In fact, set your stops a notch or two below or above where you believe support and resistance levels are. Read Bruce Kovner on market wizards. No more than 1% portfolio risk per trade; I am assuming stops must be set wide enough to include that 1% portfolio risk if the stops are hit, so he had to allow for market volatility. Stops have to be gauged to match market volatility. Example: You have a 5k account: maximum portfolio risk 1%: $50 loss. Lets say you want to long AAPL. Lets say short term support is $75. Set your stops to $72 (allow breathing room). That is $6/share from current level. Your position size should be an amazing 10 shares !!! Not very exciting. But that is how many big players trade !! That way, they aren't forced out. Now, the most important thing: reduce your trading size so your trade can go to those losing levels and you can feel you can afford to scale in even more (higher probability of success than even your original entry), perhaps after your supports are tested successfully if you aren't feeling much interest in gambling. There is so much nervous money out there because so many are entirely overleveraged and risking too much per trade. That is where opportunity lies for a trader. I doubt you'd become very emotional about blackjack or poker if the stakes were $0.01. Thats why paper traders can do so well - because they only have to pay attention to TA and fundamentals, not their emotions. The money may seem slower to come, but it will be much more consistent. Of course, this makes it more difficult to survive for the guy trying to make a living off a 5k account. But honestly, most people have no business trading a 5k account with intent to make a living. And that is why there is so much opportunity available to the better traders, since so many people are undercapitalized and overleveraged. Just the facts. If you want to make it big from a $5k account, I think you'll just have to take large risks on only the highest of probability trades. And the odds are you'll lose, but some win. Thats not how wealth is maintained and consistently grown, though (generally speaking).
um... "If you want to make it big from a $5k account, I think you'll just have to take large risks on only the highest of probability trades. And the odds are you'll lose, but some win. Thats not how wealth is maintained and consistently grown, though (generally speaking)." trading is a business. MOST businesses fail. trading is no different. i would not say "starting a business is not how wealth is maintained and consistently grown". tell that to the fortune 500. the point is that trading, like running and starting a business is competitive. i don't care if 80%, 85%, 90%, 95% (nobody knows the real #, since there are no real studies on it) of traders fail. that says nothing about me, or my potential. it only speaks to the aggregate. i am not the aggregate, and I am not average. if i thought i was, i never would have traded in the first place. of course, most people think their IQ is over 100. clearly.. they are wrong. but the proof is in the pudding. you can make a living daytrading futures. scalping them. and a 5k account is more than enough to trade 1 contract (i have traded 2-3 with that size account on occasion). STRICT money management, high probability setups and ruthless discipline. are necessary. i somewhat agree with the wealth thing in that i do not keep winnings in my trading account and just add size. at LEAST every month (and usually ever week or two), i filter out 75% of profits and INVEST them in longterm stocks (using mostly fundamentals), some swing trades (using Ta and Fundies), some option plays (mostly spread), and some commodities. if you start trading, OR investing with the goal of "making it big" , you are almost guaranteeing failure, because you are concentrating on "making a killing, etc'. don't concentrate on your setups and your trade execution. the money will take care of itself. and if not, just think of yourself as being a "liquidity provider"
If you truly have the skills to make a regular living off a $5k account, you shouldn't have a $5k account for long and should increase your size. Otherwise, I call BS.