How am I doing? Been watching for the most part of it, hanging out in a great small iRC channel with the regular company that has really taught me a lot... Today is my 3rd day of trading (actually I have 4k so im in the swing trading category) and im long 100 DRMD (which I think may not have been such a good play) but im planing tio get out tomorrow. Too thin issue for my taste but it was on the TRadingmarkets pullback list or something so I took it. Anyway, Im really determined to succeed at this so Ill stick to my plan whatever. Wanted to sell it but there was no OBJECTIVE reason (except I was losing some money ) so Ill wait for my stop to get hit. Today I experienced all of the feelings I thought could never happen to me : Anxiety - as I was waiting to trade something (ANYtHING) greed - once I bought it Fear- when it started crumbling down ( a little but hey, "It didn't do what IT WAS SUPPOSED TO DO"-sound familiar?!) Helplessness - this is the stage Im at now because I dont know what to do, so I decided to go with my plan whatever happens. IT IS EXTREMLY DIFFICULT! Sometimes I think one has to be Mr. Spock to succeed... Five to beam - Energize! Alex
Funny you mentioned Mr. Spock. I'm looking for a big poster of him to hang in my office for inspiration. He'd be the ultimate trader. Since you're only taking one position at a time, why not just enter a stop and a limit sell and take the day off? That way you remove the temptation to do something you might later regret.
Neo, Do not make an effort to silence the feelings and cultivate bland indifference. See through the universal illusion that what is pleasent or a gain may be rested from what is painful or a loss. To see this is to see that a gain without a loss is like up without down, and that to make an effort to persue the good is like trying to get rid of the left by constantly turning to the right. One is therefore compelled to go around in circles. PEACE and good trading, Commisso
Since it seems that your emotions are your biggest obstacle I recommend reading Trading in the Zone by Mark Douglas. I'm about half way through it myself and am impressed with the way Douglas breaks down the traders mind. He uses the newbie traders thoughts to build on, and much of what he talks about would help you. http://www.amazon.com/exec/obidos/ASIN/0735201447/002-2000018-3131210 There was recently a discussion on SI about this book...it comes highly recommended by some great traders: http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=16446678
Dustin - can only agree. Read Mark's book I don't know how many times during my vacation in September. It's really an eye-opener. However, since we are not ( yet ) robots, it'll take a while to apply all the good advice. But , step by step - it works ! Had 2 stops hit on Friday ( profit-taking stops, though ) and seen the stocks went on higher afterwards - but no regrets - only a very short " damn.. st... " and then I went on my with other things to do. I think, a great deal of fear comes, when you trade with money, which you really can't afford to loose. You'll start to count the $ with every tick - that's really a devastating habit. One must get rid of it ! You see an opportunity, you take your position, you put on your stop ( write off the risk-money in your mind and lay back ) - anything else is anyway beyond your control. So why being afraid ? You know, you can't loose more than your stop - that's it. If one can't even afford to loose the stop, than I'd say one should papertrade or put one very tiny positions. NEO : No reason to sit and watch the stock whole day long. Especially not a a stock like DRMD - declining volumes since July, declining strength since July. Trading in a sideways channel since end of July, Stoch = way overbought, 23 = strong resistance - 3 attempts to break it failed since July. I'd rather go long if it brakes 23 with increasing volume and than comes back again a bit. Or go short with a tight stop slightly above 23. Or wait t'ill it comes back to 19.50 - 20 and than go long again with a stop at around 18. - 18.50. IMHO, 100 DRMD for a 4K account is way too much - you put more than 50% of your money on one trade. I don't know exactly at what price you went long. I assume at around 22 or so. But if your stop is somewhere below 20.50 ( where it should be, in order to avoid being stopped out pre-maturely of this swing-trade just by daily volatility ) than your risk is approximately 1.50 - 2.50 points - that's around 5% - 6% of your total equity. I had rather put on 50 initially and when the stock goes where it should go, put on the next 50 and raise your stop. Most traders don't like to risk more than 2% of their equity on any one trade - no matter how promising it is. If you need to set a logical stop far away, than just use smaller positions in order to stay with your MM rules - you'll see, that this will also have a positive effect on your emotions. You "feel" more save because you know there's not much at stake. If the stock comes down to your stop and bounces back without hitting it, than you can still consider to put on some more money, since you have the confirmation you're looking for. Hope this helped a bit. regards
I have had an ongoing debate with another trader on whether Spock would be the best trader from the Trek series....or perhaps if Data would be better. Clearly Data would be better from a pure speed/order execution viewpoint. Remember that early STNG episode when he re-aligns those crystals in seconds, moving his hands at lightspeed? Data plus the Watcher = the best momentum trader that ever was. On the other hand, Spock's human half may come in handy in that he obviously had mastered control of his emotions and they would not be an obstacle as they would for a full blooded human, while maybe his human half would provide just enough intuition to help when the market just doesn't act logically...which we know is all to often. Here Spock would have the clear advantage. Sorry to digress.................
I'd say, Data would also make a great RT scanner for trading opportunities including backtesteing of thousands of systems in milliseconds and choosing the appropriate one for each stock - together with mathematically sound money-managment and risk-control - needless to say, that Data would be so emotionsless and fast in his executions, that the MM's wouldn't even know what hit them a second ago. Great trader - he would be indeed.
re: "Remember that early STNG episode when he re-aligns those crystals in seconds, moving his hands at lightspeed?" i seem to recall that Data was suffering from some odd malady resembling alcohol inebriation at the time...i could be wrong...but sober he would be a handfull no doubt