Been studying trading for 6 months now and wanted to throw out some random thoughts and suspicions from a newbie to get some comments. 1) People say its a tougher market to trade now. Why? The stocks that used to be profitable trading are now looking pretty flat and lifeless. Less movement = less action. Larger percentage of false signals. Lots of little pops and quick reversals. Maybe they are getting stuck tading the same old baskets. I suspect the master traders take their profits very quickly or have moved on to a new set of stocks. They probably spend or have spent a larger percentage of their time identifying stocks for their baskets. Less market movement due to the overall loss of faith in the markets by the general public. Note: I focus on a small portion of the Naz...so thats my bias. 2) Playing the correct stocks is 80% of the game. Am I repeating myself? Simple methods work with stocks that behave well. It took me only a couple of hours to develop a set of rules that would have made a killing in a market with big moves. The stocks it made a killing on no longer work. Stocks change behavior over time. Seems to take months. The smart guys dump a stock when it starts misbehaving and move on to new gems that obey according to their rules and style. I suspect a master trader can skim through a few weeks of intraday charts of a stock and almost immediately know if it will be pofitable or not. Trying to get $$ out of some stocks is like trying to extract blood from a turnip. 3) The trend is your friend. Yeah no kidding, but absence of a trend is also your enemy. Avoid stocks with small trading ranges or stocks that dont move often enough. Many little losses accumlate with slippage to kill you. PS. Small scalps are not my style. Maybe someone can play these stocks...not me. 4) Certain methods work better in certain types of markets. Identifying the type of market your in and syncing up with it using the proper method is key. But how? I suspect this takes the greatest experience since you must go through several market shifts to learn this process. I have devised some methods that worked well in one market and worked great in a different market just by reversing the buy/sell logic. 5) Control your emotions or your toast. I have a whole list of trades that would have been profitable if I SIMPLY FOLLOWED MY VERY OWN RULES..... aaaaaarrrrgghhhh enough said! :eek: 6) Sometimes throwing out everything you have read, taking a step back, and staring at a zillion charts as if it was your first time wtih NO bias, works wonders. That grey matter upstairs is a wondeful pattern matching machine. Let it. 7) Slippage is a bitch. Drawdown is a bitch. Discipline is a bitch. Emotional control is a bitch. I have one system that makes lots of money but I could never survive the pain of the drawdowns. There ya go.... more thoughts later...maybe... axe
Discipline above all else. Cut through all the noise. There are 8000 some odd stocks and other vehicles available to trade every day. Given this, taking a trade should be a rare event.
The market is random... give it some structure using whatever indicators or strategies you care to use... and above all else, KEEP YOUR LOSSES LOW, so that you have capital to actually make gains with...
if you stick by the things you posted and rules you create for yourself you should be around for a long time. good luck
Hey, we've been getting some pretty good response. More panel posts than from members. Teresa Lo has been by and so have Vadym Graifer and Bo Yoder (of RealityTrader.com). Stop on by if you have the time: www.innerworth.com