I would guess there are very few successful traders who approached learning to trade as a hobby. Perhaps this seems like nitpicking on your word choice but I believe it is not. If you haven't already I would think about "Why" you want to trade then set some trading goals and fully commit to accomplishing them. Good trading to you ! jas
You are both the student and the teacher in the world of trading. The easy part is being a student. The hard part is being the teacher. As a teacher, you have to teach yourself what you should learn. You have to decide what is really relevant. You may have to overcome a stigma or two. In addition, you have to decide how deep you need to go into certain topics--like Mandelbrot set, Gaussian distribution, fundamentals, etc. You also need to see through some smoke and mirrors. To quote Sun Tzu's Art of War, "Every battle is won before it's ever fought". (Sorry I hate sounding like Gordon Gekko) This applies to trading. Once you got it all figured out, you don't need a journal. Enjoy this journey and don't let it stop. PA
Thank you Xela, DDR, Redneck, Market Surfer, jas and PA for your welcome posts and feedback. Some insights I've gained from your posts are 1. It would be a better idea for me to have demo account practice in addition to the paper trading I've done. The fact that I have not done demo account practice highlights several psychological issues. As an end of the day trader, I only get maybe one or two good relatively uncorrelated signals per week using my system. Amassing enough statistics on demo trades would take me another several months at least. I admit that I do not have the patience and discipline to refrain from placing actual trades when I see a good setup. This also highlights another issue that I have had since I first started trading 10 years ago. At each stage I always thought I knew what I was doing. Doing a few months of demo trading would provide evidence that this time is different. As a compromise, because I know I can't pass up what I think is a good setup, I have reduced my initial risk to only 2% of my portfolio and have included a drawdown safety net in case my pportfoliogets into trouble from the get go. Also, I have provisions to increase the amount of predefined risk I can use as I become more profitable. A 2% initial risk is lower than the 5% I usually take, but perhaps I should lower the initial risk even less than 2%, perhaps to 1%. Let's see how my first few trades pan out and if I have a quick drawdown I will strongly consider doing so. 2. I will try to document each step of my trades so that I can expose any areas needing improvement. 3. One of my biggest trading problems has not been adhering to a strict stop loss procedure, but rather taking profits haphazardly. In the past I've always taken my time when selecting a trade but then am easily frightened out. My account therefore has an average reward of about the same size as the initial risk but I only score about half the time leaving me basically break even year after year after year. 4. I agree with Redneck and jas perhaps the term hobby does not apply when describing the passion that it takes for some of us to become successful traders. If I was able to rewind the last ten years and start over again knowing how much time and effort it would take me to be a successful trader, I think I would choose some other pastime. 5 However, because I've put so much time and effort into this "pastime" I want to succeed more than ever. In addition, even though I am fortunate enough to have health and a good full time job outside of trading, I have family members who are not so fortunate. Going forward, I would like to continue to be able provide them with financial assistance as they need it. In short, I have incorporated into my life story that I will be a successful trader. It gives me great satisfaction to believe that on my death bed I can look back on my life and see that I faced and overcame an incredibly challenging technical and psychological hurdle, and by doing so I was able to help some other people that were less fortunate than myself.
Very sound plan ! but the important question is whether you really know what you're tallking about...seriously, I have seen people who's been trading over 8 years, and yet, still can't even distinguish between reversal and pullbacks. But good luck to you!
A&M isnt a method. Maybe if you open your mind a little your results will improve. It doesn't take a lot of effort to just read a few pages. Then you can decide whether there's anything there for you, without being dismissive at the get go. If you don't like it you can just move on. Maybe after ten years a change in thinking is required.
Oh, I have always pictured Redneck on front porch with his dog name Old Blu a rocking on his chair that looks like it is on it's last five minutes. He is a selling a 1998 Saturn for cheaps money of $3,000, odometer says 3,500 miles and 2_bits come strolling on by to check out car, Redneck limps on down with his two canes saying it was his mothers last car she had before she went into the skies and she only drove it once a week on Sunday, golly 2_bits thinks he gots a steal, he pays Redneck the cash without a test drive cause old Redneck looks to be in a great deal of pain to even go for a test drive in that hole pitted area he calls a farm, them pigs wallowing for any kind of fresh meat, so Redneck says it needs a good old fashion tune up and a bit of new air in them tires. 2 bit starts up the car and huge cloud of exhaust comes out and it is a missing and herky jerky down the road she a goes, Redneck says keep the petal to the metal or shes might stall on you, little does 2_bits know Redneck has his sheriff/tow truck driver son down behide the biilboard sign that says 15mph as Redneck going out to the barn to push another 1998 Saturn out, hmmm einee Minnie moe, I have twelve colors so this next one be midnight blue, so hes a pushing that car to replace the other one and he has thems canes on the roof. Redneck sure loves his "hobby" for Sunday afternoon, he laughs out loud it was a bargain to get al these 1,000 Saturns that he got that really had 1,003,500 miles on them for $12 and he just had to pick them up at railroad station. Well Redneck gots to go down to Skies casino to meet up with MaMa for another Sunday buffet and tell her he sold another Saturn, cha-ching. Yep, Redneck gots that saying down real good that he just a simpleminded dumbass. Well before 2_bits know it, it is in jail cause he was a doing 55mph screaming down the hill on no breaks and broke a dozen rules of the road cause Old Blu County has and Bubba Redneck saz he is the sheriff and he is justs a simpleminded dumbass as he putting handcuffs on 2_bits for the dozen violations he has committed, no safety sticker, no insurance to boot, well bubba saz you in luck though caz he the only tow trucker in the county and he can hook that car up for only $5,000 bucks manatory, oh you don'ts have it on you, well mees going to have to puts you in jail till our judge can come by when he can, but hes very busy cause on Sundays he has dinner with his MaMa at Skies casino. Yea boy, cant' always tell a pullback from a reversal, you must have one hell of a crystal ball to know beforehand, some pullbacks turns into reversals and some reversals turns into pullback. I started trading as a hobby and I still consider it a more than full time hobby that I retired long ago from my hobby, even when I was losing, never considered it a job and I have fun calling it various things. My job is really looking for cheap cars for old Redneck and putting holes in his farm and his house is that 32 room mansion on other side of town. I am sure lucky redneck lets me have that side room to his barn for my cot and fast internet speed for meez laptop. hes a nice guy, he brings meez back some leftovers from the buffet, so green stuf and blue stuff, hot damn.
I agree. There's alot more to Trading...then just trading. -- You have to be wise, worldly wise and mature. You can't just jump into this world as a young inexperienced buck and think you'll dominate it. There's so many variables and elements that are constantly intertwining with one another -- you'll be tested...both as a trader, and human being. Not everyone has the mettle for it.
I see that A&M (Approach and Methodology) isn't another trading technique and that J_S was trying to steer me in the right direction. I looked up RN's outline and it has a number of categories that I have not considered in developing my trading plan. I also see that I need to flesh out my trading plan in more detail, especially by precisely defining my setups and not just relying on my intuition. I will work on this.
Maybe I'm mincing words here, but I don't quite agree. Many professionals in other fields started out with their profession being an all-consuming hobby until they reached a level where it was no longer a mere hobby. Yes, full-time trading is a very serious business for professionals only, but you can maintain it as a hobby and passion until you've put together a really good methodology and market understanding. Realistically, this is a process that takes YEARS and most people will never even get there. On the contrary, I see too many on ET who's not ready to trade yet, but still want in on the action, learn by 'trading' (and often with money, yikes) and don't have the patience or interest in spending the necessary time learning the requirements of the market place. My word of advice to the OP would be essentially what I said above: Take the time needed to put together something extremely good until you start trading. Simulator trading done seriously and realistically is great. If you can't make money that way, you'll never be able to do so live. You have a long way ahead of you, so good luck! PS: I would never recommend anyone to get into active trading. Too hard to learn. I have friends who's making good money over time as long-term investors in dividend stocks. That's my recommendation to anyone who wants to get into the market.