ah u forgot one more secret. cut your losers shorts and let your winners run....that is the secret of trading....pssssss...past it it on...
I would add one more piece of advice. If you're struggling with trading, trade size so small you almost don't care what happens. I employ this strategy by making a lot of small trades rather than bet the farm conviction trades. I also space my trades out in time. I'll start a small trade, then if the market moves in my favor, I'll add a little more. I never double-down. If the trade goes against me, I don't add to it. I accept that the market might be telling me that I'm wrong and although I may not immediately close the position, I definitely won't add to it.
i'll summarize in a few words as possible. average up on your winners. never average down on a loser. because you will make 2 mistakes when you average down on a loser: you not cutting your lost shorts and adding to a loser! you stick with loser and you will become a loser!
Yes, I do agree with you.. I just didn't feel like writing everything down because there are so many things to say ..
In one year a newbie under a good mentorship and willingness to read/research outside of market hours can become pretty decent trader. In big houses like GS, JPM etc. new guys are put under a senior mentor in intense training who is always whipping the stick for mistakes done. They usually try to specialize a trainee in only few instruments and then make learn everything about them. Constant reading, youtube vids, forum participation etc. is always required. Actual trading might be merely 1 hour a day but rest of efforts take 9 hours. Each day, 2 youtube videos, 1 blog articles, 1 hour on forums reading various discussions etc. etc. can take a newguy far and long in one year. Like others mentioned above, got to learn to quickly cut short the losers is probably most important in staying alive in this business.
Fist off I congratulate you on your quick success, but be careful, most traders that think they learned a niche, three years later they were gone cause they never really learned to chart read. I actually do both, all systems including very long term I average down a few ticks in scalping, over 100 signals per day just in ES alone and dollars in long term stocks, all automation, but I have geared my systems to be first risk adverse. I been trading very long time and know charting well and also have done years of back testing and also understand Trend & counter-wave swing averages, my protective stocks based on knowing what is normal activity, and my risk adverse nature is best it has ever been for myself. I don't believe in sticking with a loser either, but there are "grey" area of every trade and I doubt you risking one tick? Continue the good trading, nice to hear someone didn't take the years as most of us. I do double down on stocks, but when only certain pattern presents itself that back tests very low losing percentages. I think the key to trading is losing percentages to be as low as you can go, then can add more size. But we all have our ideas of what works for them. Botton line, if the account is going down consistently, stop and readjust till you KNOW you have an edge, otherwise you be tossing money in the air. @MarketAddict very good post you started, but guess I am one of the ones who never got use to losing and still don't, I wake up in the morning and have a sense I will be profitable everyday. I have just found ways to take risk aversion to different level, and yes, bottom line might be smaller than ones who can risk more each trade, there is give and take in most of trading and if you can live with your trading plan once finished. It took me 7 years to get profitable scalping, and another 7 years to get good scalping, and 37-39 years to design very good day trading methods, LOL, but I can't stand to lose very often.
what makes you think i don't do chart reading? i do chart reading 8+ hours a day. i do it during the day, night, weekend, and i even dream in charts. i put alerts on my phone when stocks hit certain price and by looking at the chart i will decide to enter or not...u don't think i work my butt off to get to where i am? first thing for beginners is to get educated if you don't know how to trade. either thru some mentoring or someone you feel you trust or learn from.
Friday was easy. It doesn't count unless you can can make consistent money in chop trending down. Thats when you know you're good.