Does anybody ever start anything new and know sufficiently what they are doing? In my experience, I had no clue what I was doing when I first made the jump. I found that in order to eventually get to the point of sufficiently knowing what one is doing, you need belief in yourself that you will persevere through setbacks that will usually occur through ones journey. Some people quit after a few setbacks. I am not sure if these people really had the belief in themselves that they would make it no matter what. Maybe they did. I found that the key is to get back on the horse and especially learn from our mistakes based on testing upon prior experiences. Unfortunately, I did not sufficiently learn from my mistakes until the same mistake happened to me like 5 times or probably a lot more. I was very close to calling it quits and a coworker that I solely traded with did quit. He is happy though since he did well enough in his gmats to go to a top 5 b school. It seems in this case we both got what we wanted. By the way, I am still learning and by no means an expert but I have definitely gotten over the critical hump.
This one of the best threads! Why? Self belief is absolutely the best attribute anyone individual can possess. Think about it , the last losing trade could have been better and the next trade can be the one that sets you apart from the crowd, but only if you have the belief in yourself reguardless of what others have to say about YOUR progress.
How does it help to be jacking away some or all of your capital before getting to the point of sufficiently knowing what you are doing? Its not a good idea to believe in yourself while choosing to be a loser through not studying the market and first reaching a sufficient level of expertise.
No offense, man, but that's "rookie-think". The best trader of all time would have been Mr. Spock. His style would have been to analyze the situation and do what was *most logical*.. then use a stop to necessarily protect capital when wrong. That's IT! Nothing else matters. Every single trade stands on its own merits and always boils down to THAT. "Confidence" and "Belief in Yourself" is just mind-mess. (Expanded violation of New Year's resolution to the duration of this thread...)
So you are telling me that you reached a sufficient level of expertise without ever taking a trade? WOW....Your experience differs from mine. From my journey, it seems that paper trading or studying the market can only take you so far. Its the experience of taking a trade, putting some money on the line that really allows one to learn. Paper trading or studying does not incorporate the emotional aspect which I find to be important in trading. To each his own. Edit: I do not think I would be at the level I am at if I did not take real trades. If you were able to not take trades, and reach an expert level, congrats. As long as we reach that level, it really makes no difference.
The importance in believing in yourself or not believing in yourself is a lower tier issue for most people who are interested in making money. The trip from beginning to novice to intermediate to expert is promarily a case of your IQ (Intelligence Quotient) and your EQ (Emotional Quotient). The attached chart illustrates that of the nine cells it is possible to continually operate from B to N to I to E in just the upper left cell. It is not exactly the Dr Spock scenario posted, however. Making money is the way to go from day one. There are, however, several considerations. Only no risk trading can be done at the beginning because of lack of knowledge skills and experience. This definitely sounds Dr. Spock-like and it is attributable to the reasoning required by any person entering into trading. The risk map of the market is rarely discussed in ET. And it is not very well understood that there is not a risk/reward relationship in trading. For making money belief is not a requirement and what is a requirement for making money comes under three headings: knowledge, skills and experience. Strating with none of these requires that a person not take any risks. It is simply a requirement that a person starting out make four overlays of risk, knowledge, skills and experience. These four maps ditacte where to begin and where advancements may be made in a coordinated manner. Most people do not elect to be methodical in making money. you can see that by two rituals that are common: 1. paper trading and 2. edge trading. Both are good ways to get from a starting point B in the upper left cell to the lower right cell (Irreversible Failure) The Beginning is a state of emotional balance and an intellectual pure desire. Emotions can become inflamed as in the example of physiological manifestation of infection. Treatment is required and usually not with the source of infection present. The pure desire to intellectually pursue making money is not a contaminated thing and has every possibility of being achieved for a short period of time. The only way it can continue is through an orderly process of acquisitions of knowledge, skills and experience. The compound impact of a non orderly approach (failures witnessed instead of successes (this is called by the uninformed as a necessary tuition)) and its inflaming of the emotions counterpart, is what leads to the pervasive level of failure in trading (try to find a greater level of failure in any other money making enterprise). So "belief" is not really in the picture for those who are destined to succeed in trading. There are many many ways to make money in the markets. If one were to look at the no risk corner of the four superimposed maps, the knowledge part comes down to quality assurance only (three elements: top quality by EPS and RS; repeatability; and reliability); the skill required is only to enter and exit at market (the worst case is a wash trade) and the experience is in a slow motion setting (the beginner is ahead of the beat at all times) and none other. None of this is commodities trading. No one can learn to make money by starting out in commodities since there is no "no risk" commodity. Making money is a slow beginning process. It will only yield 10% a trade every several days. It will take 1/2 a quarter for the beginner to double his money by the REPETITION over and over of the same no risk process. By taking out the initial capital at this point and starting over only using profits the traders begins to become a novice. Here is the first moment that "belief" can enter the picture. And it has nothing to do with the person. It has only to do with the markets. The person can get to "believe" that the market is an unlimited source of capital always available to him. If he has begun to do intellectual sets of things (four independent ones), he gets to have knowledge about monitoring, analysis, decision making and taking timely actions. He can become a novice at monitoring, at doing some meager analysis based upon the repeated truths he has acquired. He compares over and over a few salient items between his monitoring data set and the few no risk truths. He does get to experience deciding on the level of shooting fish in a barrel. And he learns to use a market order to enter and exit. He hits T and money goes away and later reappears in a larger amount than initially. 10 percent every few days in slow motion. Over and over. Every eight trades a doubling of capital occurs. Obviously this is only a beginning and eight money velocity doublings are also possible on the way to intermediate and to expert. Lets say the person is doing cross over trading in equities (intermediate/expert levels). This is simply an adjusted method based upon the no risk trading he did initially. He uses the same QA approach and is now replacing his lowest money velocity holds with hot list stocks that are rising in money velocity past his poorest money velocity holds. So the hold durations are shorter and his equity curve is steepening according to the general market potentials. He is doing partial fills as well because of the size the positions. So what is the belief situation for this type person? He probably focusses his beliefs on the economics of society and how society is coping with the problems it faces. Today we can see how individuals with consciences are those who lead by beliefs in their responsibilites to help out. People in ET do not express that they can do much of anything as a rule. The belief dialogue looks more like a "hope" type substitute for the real fabric of making money using skills experience and knowledge. When you look at the risk map there is a line across it for the places not to go. Obviously you do have to have the associated knowledge and skills and experiences to stay out of those places. It is not possible to go there and expect "money management" to keep you out of trouble. Money management has nothing to do with loss prevention; it has verything to do with getting to and maintaining a high money velocity on your equity curve. Belief is a lower tier consideration it turns out.
Why would you think trading is not a skill to be acquired and honed? Why would you want to trade with insufficient knowledge and understanding of the particular market you choose? If you are talking about having to experience emotional impact and real money on the line it is a silly substitute for not doing sufficient homework so that you know what you are doing and you know what you can get and should expect from the market. Otherwise you are just playing roulette.
"Become?" I thought you already were one of the best in the few months since you started trading. You really should try to keep your story straight.