How long did it take you...

Discussion in 'Professional Trading' started by Chris Paciello, Jul 19, 2006.

  1. Bullet


    I understand your point, however, you are making the assumption that the emotional stress from one aspect of life is identical (and carries the same weight) as another. Someone with very little money may find monetary uncertainty more stressful than all other matters. Still I know where your coming from.

    #21     Mar 21, 2007
  2. I totally agree.

    We learn the most from our mistakes. Unfortunately, for people like me, I have to make the same mistake a dozen times before I start to truly understand the underlying causes of my mistake.

    Psychology plays a huge role in trading. EMOTION is a four-letter word to traders. Emotion causes more losses in the stock market than any other factor. I truly believe that.

    If you play by the Warren Buffett rules, you buy and hold forever. The reason that works -- the market has an upside bias. Since 1927, the S&P 500 has risen an average of 10% per year. If you buy and hold forever (provided you diversify your holdings), you negate emotion, and your account will rise. Simple fact.

    But for those of us who try to beat the market, we have to buy and sell, and that sort of constant decision making can be affected by the two biggest EMOTIONS -- greed and fear.

    Greed tells you to shoot for the moon with every trade, ignore stop losses, and refuse to take reasonable profits.

    Fear tells you to stay in cash (fear of pulling the trigger) or exit your winners too early.

    We've heard all this preaching before...

    So then, what is the answer to controlling EMOTION? How do we negate the power of emotion over our trades?

    Create a PLAN that gives you consistent profits when it is followed religiously. Stick to the plan. Don't deviate. Don't experiment and try to find a "better plan." Some people will trash me for saying that. They will say it is good to keep experimenting always. Okay, I'll give them that -- but if you do experiment, looking for that plan that yields even better results than the one you are currently implementing, then let me suggest experimenting with paper trades (a.k.a. practice trades) for at least 3 months before you risk even $1 on "your new brilliant plan".

    basically, I'm saying that if you have a current trading PLAN that creates a 50% gain on your total account value (TAV) per year, well then, you are kicking the market's ass and have a good thing going. If you think by experimenting you can create a plan that allows you a 75% gain per year on your TAV, by all means, explore your plan. Just make sure to paper trade it for at least 3 months first while you continue to implement your current 50% TAV gain per year plan.

    Just my two cents. I've learned the hard way. 7 years of trading...always looking for a better PLAN. Then it just clicked a little while back. I have a solid plan that gives me a 75% TAV gain per year. Why not stick to the plan month after month? took me 7 years to learn that? I'm absolutely pathetic. What a slow learner! But at least I am learning. And yes, I have paid my tuition to Wall Street. I blew out one account... took a year off from trading to clear my head. Now I'm back in the game with a new attitude. Not much smarter than when I started, but definitely more experienced.

    #22     Mar 22, 2007
  3. Good advice

    There is a middle age friend who start around the same time as me. 6 months on, he is still looking. He changed time frames, indicators, systems etc...

    Meanwhile, I fellow throught with my systems, refines it, and keep on going. Now, I am on 6 fullsize HSI and he is still one 1 mini.
    #23     Mar 22, 2007
  4. MarkBrown


    you know the way i look at trading is - i just settle myself with the feeling - i have lost or am going to loose my money trading. that way it settles my emotions where i can just let my systems do its thing.

    mark brown
    #24     Mar 22, 2007
  5. I am totally amazed how many successful traders are on this board. The strange thing is the names keep changing except for a few. I guess they leave after couple of months and more successful traders come on board.
    #25     Mar 22, 2007
  6. Hyparxis


    "Getting it" is a relative term. It all depends on the person.

    I have been doing countless hours of research since I began this adventure and the best advice I have found thus far, many times in fact, is to have a solid realistic plan and do not deviate from that plan until you are confident your new plan will be better than your old plan.

    The second piece of advice pertained to "where you play" in the market. You might think about looking to play in an area of the market you have specific interest/knowledge in. Learning studies show you are more apt to learn about subjects you care about over those you don't.

    The principal idea behind that advice is to specialize in an area and master it before you move on to a new area. Scattered focus leads to misplaced knowledge and lower productivity.

    I doubt you are going to find any one particular person to guide you, at least for free anyways. Just do your research in an area you have interest or knowledge in and look for a good stable to work off. Forums like these are great for insight when people are willing to offer it up. I like to call those lil gems "keepers"

    Oh and the last thing, I agree totally about not force buying. You just have to accept there will be days where you make no moves. Coincidentally it looks as if I will close out today with 0 transactions, but it isn't 2 yet so who knows.
    #26     Mar 22, 2007
  7. Cutten


    I'd say it took about 3 years to get a decent feel for things, and keep the basic noob errors to a minimum. Luckily I got that experience while studying & working, so once I went full time I was already a few years ahead of the average beginner.
    #27     Dec 6, 2008
  8. mike007


    Why do people keep responding to posts that are over 2 years old? Do you not read the dates?
    #28     Dec 6, 2008
  9. Ha, and here i was about to respond. Hopefully he's gotten it figured out by now :)

    #29     Dec 6, 2008