JJ: "When I talk about money management they tend to laugh"
Excuse me for being simple minded. What exactly is money management? I always think that if I buy 100 share of ABC at $100, assuming the cost per trade is $20, I would lose money if ABC is less than $100.40, gain if greater than $100.40 and break even at exact $100.40 (assuming also that I trade the IRA account so tax isn't a factor)?
About "gambling", when guessing is involve, it's gamble, whether it's an educated guess or just a wild guess. An educated guess in trading involves proven TA and/or fundamental. A wild guess involves all kinds, such as bottom fishing or jumping in with the crowd, which sometimes works well. A simple example is the buying last Wednesday morning: an educated TA guys would wait for confirmation from their fancy indicators, while a wild guess guys jumped in and bought when they heard CNBC said it was the bottom.
Sometimes they got killed, sometime they got money. A friend of mine, who is totally ignorant about TA. His portfolio is currently up more than 60% this year alone, because he bought technology mutual fund (just mutual funds!!!) every time the market looked so gloomy such as in April, May, September and October. He sold when his funds drop 7% from its recent high, or his price, since he heard from some guys whom he doesn't even know, but he heard that the guys was good (I believe it's McNeal), that one would not let his money drop more than 7%. The guy know nothing about intraday chart or intraday trade. He uses Yahoo daily chart, just to see "how's thing going."
I hardly knew any educated traders that made more than he did this year, not to mention last year when he was flipping Japanese and technology funds, because he had no idea which company is in the biotech sector!!! I can't talk much to him about stock, since he always said: "you analytical people are too complicated. Life is simpler than you made it to be."
Now would you consider him, a gambler, a bottom fisher, a jumping in with the crowd guy, a successful trader? <ggg>
With his record, I would. <vbg> |
