Conclusion, "when can I expect profits"

Discussion in 'Trading' started by Amkeer, Oct 10, 2002.

  1. Amkeer

    Amkeer

    Thanks for all input to my prior question, "when can I expect profits".

    I have come to this conclusion after the feedback from fellow members and from my own experience the past 22 months or so of trading these wild markets:

    Don't expect to make a profit trading the first 2 years or so if you are self taught. With the importance of technical analysis and the time required to become somewhat knowledgeable in technicals will take the better part of a year. Then you have to backtest your trading program to make sure it works. Most business ventures take a few years to be profitable, stocks is no different. Can you fail? Sure. You can fail at any business.

    Do find a broker with decent service and low commissions. If I did that in the beginning I would already be profitable.

    Do trade both sides of the market when necessary, both short and long. You need to adapt to the market conditions instead of waiting for the market to adapt to your conditions of trading. I haven't shorted this market once in my 22 months! Shame on me!

    Don't trade large blocks of shares when new. Start small lots of 100. When you master 100 shares move to 200, then 300 and so on. Take your time! You can read the market better when you are not stressed out!

    Do set stop loss! Cut your losses short and let the winners run a little longer. If you lose, find out why you lost. If you win, find out why you won. Paste a winning chart setup next to your terminal and only trade that setup.

    I have a plan ready before you enter a new trade. Know your stop loss limit, your profit potential and how long you intend on holding the trade. If the indexes start to move against you, are you going to bail and take profits or are you going to honor your stops?

    If you are tired, lazy, sick, don't bother trading! Trading requires mental alertness. The market will eat your money like a garbage disposal if you are not alert.

    If I had followed some of the above I would be profitable and wouldn't need to type this up. Unfortunately, I didn't and I also let psychological part of the market take control which was deeply affected after the events on 9/11. It took me many months to overcome those events my psych was just not into it.

    I figure if some of what I typed helps someone then it is well worth the time it took.

    Good trading!
    :)