Yes sir deaddog, You got that part right. If you do not know how and why and when to Enter and Exit a trade day-to-day, everyday of the year, trading will be very complex for you. Before I take a trade, I know my risk and I know where I my stop loss will be. And I know how to exit for a profit. Yes, it is alot of work knowing all that before entry in the heat of the moment. But its better than the Shoulda Coulda Woulda after making a mistake starring at loss too.
Evermore2017, Take the $100K and subtract $98K from it. This leaves you with $2K. Put the $98K in savings. Use the $2K to trade stocks. Risk 1% or $20 per trade. Do this until your account balance is $5K. After that you will know for certain, if you ready to risk $100K stock trading.
Its funny you say that . In 2001-2002 i had of my biggest yr's ever in a super bear mkt going long 90% of the time . I find it much easier to trade long in bear mkt s as the rally's are incredible .
I've trained or known 100's of traders over 31 yrs and every single one me included had huge almost career ending loses going short at one time or another . Seriously no novice trader should ever go short and most seasoned traders should not be shorting more than 10-20% of their trades short . Imho on what i've seen over 3 decades .
I honestly don't use charts as i almost have a photographic memory . Depending on the volatility my trades are usually 5 min's to a few hrs max . Nothing wrong with shorting with defined stops in if your an experienced trader . Unfortunately most newbie traders hate to take loses and as we all know a short can run to infinity ending the career of a small trader .
hafez50, A long can also run to infinity ending the career of a trader as well. A newbie trader needs to understand the math behind taking a loss. They need to understand the probability over a series of trades (100 to 500). Out of that 500 trades, they will not be all winners. A loss is guaranteed happen and win is guranteed to happen. The trader must be happy with the loss AND be happy with the win. If I was mentoring a trader, the first thing I would do is have the trader 1. Flip a coin 200 times. 2. Open a spreadsheet. 3. If heads, write a loss of $200. 4. If tails, write a win of $400. 5. After flipping 200 times and recording the results, calculate the winning/losing performance and expectancy. From this exercise the trader will see and feel how important the math is in trading.
To extend coin flip exercise, I'd have them: 1. Tell them they'll have to make 2 decisions, as in trading 2. Bet heads vs tails (like long vs short) 3. If they win, what do they do next? Choices = cash out, or try to double/let it ride 4. If they lose do they take the loss and move on (smart) or let it ride (add to loser, wrong)