Here's my one half of one cent: I got my psychology right long before I got my method right. Money management, discipline, patience, no hesitation, no jumping the gun, 'listening to the market'- all those things. I still had to fall on my face at least a hundred times before getting anywhere, and this was AFTER being well along the knowledge and discipline path. Think you can stand up to a mental and financial beating? Multiply your estimate by a factor of ten, and then maybe you are in the ballpark. A lot of would be traders wash out for the exact same reason a lot of would be Marines wash out of bootcamp. Or think of it like golf: you have to have the proper mindset, and psychology is definitely a key component of the game. But if you don't have a well honed technique that comes with hundreds of hours of practice, you could be a mental cross between Tony Robbins and Deepak Chopra and still suck. I like Mark Cook's answer for what it takes: "Five years of 12 hour days and losing money." That's a bit extreme, but it gets the point across. p.s. i'm talking real trading here, not the free money window of '98/'99 when Barbara Streisand was cleaning up.
I got off track by taking quick profits on the stocks with good fundamentals ( gold stocks in this particular case ) and holding the tech stocks overnight for swings that never happened. That was just lack of discipline and is my own fault entirely. Can't blame the market or wcom or anything else. My analysis and my trade entries have been good but my trade management was not disciplined, so I am in the hole. I now only have a straddle on QLGC and am hoping for big volatility to bail me out ( it isn't blind hope though, QLGC is a big mover ). I can't help but think what my situation would be like if I had just held the gold stocks through April and May. Regret sucks.
Taking responsibility is the first step. Vowing to learn from all mistakes is the second. Embracing the possibility of failure and moving forward anyway is the third. If all my screwup losses and opportunity cost losses were added up, I could buy a condo in Barbadosâ¦
I appreciate your response. I understand how you feel about what you say. Please try and understand that the purpose of my post was not to diminish the importance of strategy, systems, risk management, or even luck. I essentially agree with what you say. My intent was only to add another dimension to the arsenal of what we have to work with as traders. For me, as well as for so many, it is the mental approach that accountability plays into that I felt (hoped) would be helpful....or at least something to put into words for others to evaluate. I am a big believer in trying to verbalize what I have come to slowly realize over a long time. If this "accountability" mindset does nothing for you, that is fine. Nothing works for everyone. Perhaps I should have included my beliefs in why different personalities are more suited for different strategies. A whole different issue that I could go on about forever. Probably an important issue to talk about, but not right this moment. I will, however, for the sake of you and others that have not seen what I wrote in another thread, indulge myself and you as well, and paste my advice to a beginner trader who asked how to best start. You will see that essentially I am consistent in my beliefs that trading is learnable. My "accountability" remarks were intended to help others, who like myself have learned what to do, but have had problems keeping the proper focus on what not to do as well. This is an answer to a 17 year old that asked (or I believed at the time was asking) how to learn to trade as a beginner: Now as you can see, I didn't say anything complicated. I did not talk about specific strategies. I did not talk about finding a style to suit one's personality, risk tolerance, whatever. Just a starting point for the novice. What I believe works overall. Do I personally trade as described here to this young man? Pretty much this is my basic approach. But do I alter to adapt to different market environments? Of course....but sometimes you just need to remember the basics. Learning to trade is one thing. Understanding yourself is another. For me, I needed to understand that I had to think more objectively about my personal account activity. It has helped me. And like I stated, I only hoped that my thoughts could possibly help someone else. I don't think I am so unique. And finally, LUCK...yes, it exists, it comes into play. But the good and bad luck seem to cancel each other out over time. My time frame as a trader is over 20 years. I try not to look at my results in short periods. I get aggravated like everyone else if I have a bad day. I feel better when I have a good day. But I try and stay as emotionally even keeled as possible. Because the truth is, I cannot undo the bad luck, and I can't count on pressing the good luck always working. I do, however try. One last thought ...about pressing..... If you flipped a coin and it came up heads 9 times out of nine, and you needed to wager on the 10th flip, what would you do? Would you feel that a tail was due? Would you feel that it was statistically a 50/50 proposition so it didn't matter? Would you feel that "heads are on a roll"? Is there a right answer to this? I believe there is. Does that make me an illogical person? I know this is off the subject, but I find it an interesting question to ask prospective traders (I have been in the position to interview and hire...but not now, so please don't take this there). What would you answer? And why?
Well as a product of the human condition I would have to say tails... BUT after many years in this game I see the folly in looking at the micro-level... Last play or coin flip in the macro-view has absolutely nothing to do with the next one... So the "right" thing to do is treat it like anyother play or coin flip... IMO of course COMMISSO
If you believe that the tenth outcome depends on the previous nine then you are projecting your own belief and memory onto the coin. The coin has no idea how many times it has been flipped nor does it know how many times it has come up heads or tails. It is a coin. The same can be said for the market The market also does not care how many times it has gone down or up. Or whether you are making money or losing it. By believing that it should go up or down because of what it has done in the past, you are replacing the market with your own value system.
Yes Babak you said it better than I take a look at miy sig... That is the key "mind of a pure mirror" PEACE and good trading, Commisso
Commisso, you are perhaps the person here whose posts I most admire. Your thoughts and how you express them have impressed me consistently. Remember yesterday I said I wanted my wife to read one of your posts? (and she couldn't be less interested in the subjects we discuss overall). BUT...I disagree with you here. The reason that I feel you should bet on heads again is the old "when your hot your hot" expression. The trend is your friend, etc. etc. Logical? I would have to say not. The logical part of my brain agrees with you. It is just another play. But experience tells me to not try and buck the trend. And trends, or more accurately, repetitive events, seem to work so well in trading. I said something to the effect that you need to watch for common traits in what works....well I can't begin to remember all of the repetitive trends that I noticed in the stock market. This has made me a lot of money. And saved me from losing a lot of money. For example, there was a period when I was trading SOES for a while. I noticed something that seemed to be happening almost every day. Was really costing me big time. Finally I just went along with it (which was against my "system" at the time)...but I just decided to give a try to letting what was hurting me help me. So essentially I did the opposite of what I thought I "should" be doing. (the George Castanza approach ). Anyway, it worked for several months. Then when it stopped working, I stopped doing it. It is about adapting. And remembering that the market is never wrong. The market was not doing what I believed it should do, but what I believed didn't matter. So I went along with the market, not with my convictions. That is a big part of my success over the years. Go with what works....very simple, but sometimes very difficult to accept. Commiso.....keep posting! You and Darkhorse always make my days go by faster!!!
Hey thankyou very much for the kind words As I said with my prior post, I would treat this flip independently from all others... With a coin flip the saying "when your hot you are hot" does not apply at all... It is an illusion and can be proven mathematicaly... Goes back to Desartes (there is no causality between mind and matter in this case) BUT as you very well know as a discretional trader you are not exactly betting on coinflips... Essentialy what you are doing is betting on 1) yourself, that you will do the right thing at the right time 2) the mathematical expectation of the "method" you employ... So I totaly agree with you that if you are a discretional trader than the point you are trying to stress is abolsutely appicable... When I am "feeling" it or what others would call "in the zone" it would be extremely wise for someone to up there bets on my next trade PEACE and good trading, Commisso