Have you studied your exits in a systematic way? I have many different exit indicators, but by far the best is "stops to b/e and take a nap". At least, I usually aim to hold a portion of my position for a few days, if it is profitable.
This is a little vague. Is "quite some time" three months or three years? You haven't wasted your time. You learned something valuable, namely that noneof the stuff you learned actually works, at least all the time. So now you can go on to other things. All of us have gone through this stage. For me, it gradually came together after reading an early version of what ultimately became Gary Smith's book , which I believe is called Trading For a Living. I'm not saying the actual setups are the key, but the approach helped me tremendously. Also I loved an older book called West of Wall Street, but that is for futures traders. William O'Neill's book on stock trading is great, and you get it for free if you subscribe to Investors Daily. Finally, Buzzy Schwartz' book Pit Bull rang a bell with me, although again there are not actual setups there for you to copy. You confuse me a little with your mention of 50-50 and "70% results." Winning percentage is not the key, unless you are a scalper. You don't book win percentages. You book profits and losses. In fact, some very good position trading methods will have sub-50% win percentages. Perhaps it would be useful for you to explain what you are trying to do and how you do it. Don't get discouraged. This is a tough game and it takes a while to get a handle on it.
Yes, indeed I have read Gary's book and his recommended book by Darvas. I guess I should clarify that my approach is daytrading and scalping. Gary's approach is based on a longer term which does not really fit my personality. I think it's a good book and very insightful. Although, I wonder how he is reading te VIX lately? I know Gary has written another book which I have not read and he has a site on yahoo-groups. Thanks for the help! I think now that the boys are back in town things will return to a bit more of what I have grown accustomed to???
Don't confuse Gary Smith with Gary B. Smith. They are two different people, the latter of whom is the street.com commentator.
You need more than a high probability strategy to be a successful trader. That's only 1 piece of the 1000 piece puzzle. Well, that's just a silly perspective to have. (unless you have a crystal ball) Please read the article below: I copied and pasted part of the daily update from www.innerworth.com Skill Building Produces Consistent Profits Seasoned traders often describe peak experiences in which they trade "in the zone." Everything seems to "click." They trade in synchrony with the markets, and act almost instinctively with the ebb and flow of market prices. Although seasoned traders frequently report trading in a peak performance state, novice traders rarely achieve it. That's because trading in the zone comes with experience, and in that sense, trading is much like professional athletics; one must build up a high level of skill so as to perform effortlessly and intuitively, and for traders, that in turn leads to consistent profitability. Once you discover a winning trading strategy, using it to make consistent profits is a matter of reading the markets accurately, executing the strategy, and exiting the trade flawlessly. The strategy may not work every time, but from historical data, you know it works with "casino odds;" just like a casino, the odds are in your favor. When the overall odds are in your favor, it's just a matter of making trade after trade so that "the numbers work for you." The more trades you make by trading your plan, the more likely you will make an overall profit across the large sample of trades. (*******he's the point in regards to this thread*******) However, if you "choke" on some trades because you have not yet developed a high level of trading skill, it doesn't matter that you have a strategy that puts the odds in your favor. It's similar to professional sports. There are strategic plays that are executed during the game, but an athlete must have honed a set of advanced skills to execute the play flawlessly. Otherwise, it doesn't matter how ingenious the play, it will fail without capable players. When the professional athlete sees the ball coming, he or she must take action in an instant. The receiver on the football team needs to get into the right position, catch the pass, and make it to the goal line; he doesn't have time to let his poor catching ability prevent him from spoiling the game plan. The outfielder is better off during a baseball game if he can automatically and almost instinctively catch the ball without having to over-think it. When one doesn't have a high level of skill, an inspired plan is doomed. And it's the same with trading. It doesn't matter how favorable the trading strategy is if one doesn't have the skill to execute it flawlessly. Both traders and athletes must act on a moment's notice. They must work intuitively to observe and interpret signals quickly, yet accurately. They need to work intuitively to see signals so quickly that it is almost unconscious. Building such skills takes practice. One needs to make trade after trade, so as to perceive subtle changes in market conditions that are hard to read. Across time, one also learns how to set protective stops to manage risk, without getting "stopped out" due to extreme and sporadic volatility. And, eventually, one learns to gauge when it's time to close out the position for a profit, or cut one's losses to protect capital. The markets are continually changing, and only with practice can one learn to execute trades freely, and intuitively react to subtle market conditions. So don't underestimate the importance of practice. Sure, a winning trading strategy is necessary, but you must also have a high level of skill to take advantage of those winning odds. Skill building can help you take advantage of those odds and generate consistent profits.
I once tried to mentally create the ideal trader, and here is the profile I came up with: 1. An undergraduate degree in math or engineering. 2. A graduate degree in psychology. 3. A stint in the Marines. Why? There is a lot of math in tech. analyses. Understand yourself and others as human behavior is what moves markets and how you react to trading successes and failures will determine how far you will go. It takes discipline and IMO a Marine has it far beyond what normal people have. IMO, if you have these 3, then trading becomes simple. DS PS - I have #1 only, an engineering degree. It took me a few years to develop skills in the other 2.
#1 may help; #2 could as well study astrology; #3 you should have gotten the "discipline" required in #1. nononsense
gotta trade, That piece you posted "Skill Building Produces Consistent Profits" did'nt tell you how to find one high prob trade. The guy just rambled on about nothing to do with trading stocks. And you dont need a "crystal ball" to find high prob trades. A good real-time scanner is all the crystal ball that you need. I said in my earlier post "Figure out how to tell which stock is likely to go up". I guess you have'nt been working on it. It brings rewards to work on it. Pick one stock that is likely to go up tomorrow when they get going around 9:35 - 9:45. That's it . Do that every morning that stocks trade until you know the rally stocks the moment that they point upward and you check out their vital stats. Then buy or paper buy. A stock is price, volume, chart pattern, support levels, resistance levels and reaction to news. When you get good at it this is what you will be able to do: Buy 10,000 shares. Sell at .20c profit = $2,000. When you hit every day that's $10,000week, $40,000month, $480,000year. SUBTRACT the misses and comm and you can net at around $260,000year. Days when the buying is heavy you can take two and three positions easy, because stocks are performing strong to the upside. With no one to tell you the secrets of their strategies and to share their edge with you, it can take a year to aquire the knowledge to pick a couple of winners each trading day. What is stock trading if you can't tell most of the time, which two stocks will go up. Teach yourself to do it.