To:shawnwolff who started this subject
From: shawnwolff Tuesday, Mar 6, 2001 6:47 AM
shawnwolff wrote:
Re: Three ways to lose
Here are some ideas I have about losing.
As I see it, there are only three ways that a person could possibly be losing at trading. Sounds like and over-simplification, I know, but I find that for myself anyway, if I organize the possibilities, I somehow gain a better grasp and control over them. So I busy myself often with mulling over these possibilities, and ways to overcome each one. Each possibility has its own issues and is in itself a frustratingly difficult quandary for many.
1. You are blowing stops, taking occasional huge chunks out of your gains, or worse, your investment capital.
2. You are taking nothing but stops and small gains, spinning your wheels, and slowly decaying your portfolio.
3. You are freezing and doing nothing, in which case the fees are eating you up slowly, and your are wasting precious time.
What is interesting to me, is that two of the three are emotionally related, rather than related to the trading system.
Any thoughts on this ?
- Shawn
(Hope this thread isn't dying)
Here's a thought - all 3 are the result of undisciplined, emotional trading.
#1 - stops are/should be inviolate. If you blow your stop, are you afriad to admit you're wrong? Are you hoping that "it will come back"? In the markets, in trading, hope and prayer are sure roads to losing.
#2 - small stops and small gains? Are you relying on the indicators as you've defined in your trading plan? Are you staying with the winners according you the rules you set for yourself? Or are you reacting emotionally - grabbing the little gain "before it gets away"?
#3 - do you have a trading plan? have you paper traded it, to gain confidence that its a workable approach? Did you start small, trading the approach with, say, 100 share lots in order to refine the approach, and gain confidence in its validity? Or are you just "winging it"? Because if that's what you're doing, you're not trading - you're gambling
(PS - hey shawn, how come your picture doesn't display on the website?)
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