I would be very interested in how you do. Not that I am much of a trader, I just swing trade in my 401k, but I have been thinking about why the vast majority of people fail to become profitable traders. One possible reason is because they try to learn everything before they start. That is they study and study and study and attack the problem with all possible tools. When things break down, they have no good basis to determine what is not working right. I have been trading for 4.5 years with an average anual return of about 50% and my biggest draw down was only a few percent. I had almost no variables to consider because I was very limited in what I could do within my 401k plan. It seams to me that it is best to sequentially master trading techniques one at a time instead of trying to master them all simultaneously. I truly wish you the best of luck and hope that you will kindly report what you experience when you go live. Regards, Grizzly One truth I would like to pass on: you don't have to be the "smart" money, you only have to be smarter then the stupid money.
Paper Trading = Boxing Mike Tyson on Playstation 2 Real money = Boxing Mike Tyson for real Hehehehehehe Well good luck
I hear ya, you did your homework...you got ur game plan.....you understand the basics......... just wait until your long and the FEDs come out with a surprise rate cut........do u really think ur gona get out of your longs with out any losses? cant use limits on that....youll never get filled unless you pay up.....at market...they will give you the worst possible feel. Or, ur long a stock and unexpected news comes out......stock is halted......reopens...gaped down 4 points and no one in sight to take the other side of ur trade...it drops 4 more and ur just trying to figure out, what happen. here is another.....all your indicators tell you to short....10 updays and today is the first down day with heavyer volume than normal. So you short....out of nowhere a buy program kicks in far away from the Caculated levels you had figured out for pivit....a huge fund has decided to go long and takes u for a ride. See,,,,its beyound just having ur mechanics.....there is a lot more to trading and ur system, mechanical or not will run into situations like the later. You as a trader will be staring down the barrel of a gun.....you will have to make a decission in a split second....the decision may have to go agains all that you thought you knew. Welcome to wallstreet.
Be careful with your statistics. How many years of back testing have you done? My experience is that a complicated mathematical approach will not be able to confirm in the future. At least, not as good as your tested years. My own system is for swing trading. So far, after 2 years, it works good but not as good as statistically tested. Gradually, I am simplifying my approach. Wish you good look !!!
This is excellent advise. DO NOT go in 100% until you've tested yourself in real time with real money on the line. For most it makes a huge difference. Best of luck Oten
All of your cynicism is truly appreciated. It actually re-affirms (to me) my pre-experienced ability to be mildly successful from initiation. Although I might normally place stoploss at points of support... ie TLines, price, Cpatterns, MA's (w/ confirmations), I think that at first I will risk potential profits by placing the stoploss right at point of entry (or a single point below type thing.) Stop failures in their tracks so to speak. This I believe will begin allowing me to see if my selection and entries are on target. I am not keen to limit orders at this point, so once again I think it might be wise to risk some profits by only utilizing market orders. BTW I totally will walk(crawl) into 100% investment.
Hehehe, Good stuff You know trading is a lot about emotions and nerves of steel (besides the other important factors). No matter what you tell yourself, your first set of serious down days are gonna demoralize you. 90% of people can't get back up from them. Especially if you have a "full-proof" system, it just comes as such a shock. The reason most pampered Ivy league traders working on wall street still struggle to beat the S&P 500 is because they never experienced raw life. Solomon Brothers proved it best in the 80s by hiring hardened guys that were educated by street life to work their bond trading. They just rocked the house.
Hi, some question. Have you already traded stocks overnight, or stocks at all? Have you experience with loosing money? You know about the success rate of daytraders, especially in the future business? Am I right. You wanna start trading by trading futures? You think intradaytrading is limiting your risk? Apart, do you ride a KTM EXC 200? I'm just fine with my LC 4. Ktm rocks. Keep on going.
Richard, I am not some sophisticated day trader with a system, I simply swing trade in my 401k which only allows me very little flexibility. I can only take long positions in a very limited number of mutual funds in the Alliance family and can not trade except at close. I started trading because I hated loosing money. I would just sell and go to cash whenever the market dropped which of coarse presents one with the problem of how to get back in. After buying a couple of peeks, I promised myself that that was never going to happen again and started scaling in as a dip developed. After a while I would just jump in at the bottom of strong dips. This was in 99 which was a very favorable environment for buying dips. At the time, I would just write down the market numbers from the radio. My best year was 2000 in which I grew my 401k by 89%. Had to love the volatility of the crash. Last year I was only up 20% and this year I am up 44% but my account has been frozen by the mutual fund family and I am no longer allowed to trade. My experience has been that is is unnecessary to master a broad range of skills in order to successfully trade. Instead, I think it is better to keep things very simple and maximize you ability to use a few tools. I was forced into this behavior because I had a very restricted environment in which to trade. Now, my 401k plan is changing providers and I should have brokerage privileges in mid Q1 which opens up a far greater range of possibilities. It is my plan to slowly add complexity to my methods in order to be able to make a rational assessment as to weather or not a change results in an improvement to my performance. As an example, I will probably swing trade QQQ instead of a teck mutual fund and try to optimize entry and exit points inter-day. Unlike most, I came to trading because of risk aversion instead of greed. I think this is a great advantage because it is very hard to blow out when you are a chicken. Regards, Grizzly