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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Eric P who wrote (3404)	8/29/1999 8:46:00 PM
From: Magnatizer	Read Replies (1) \| Respond to of 18137

Eric/Thread Friday I made an error which I am having some trouble overcoming... Situation: Carried over spoo (sp future) short position from Thursday which had a good entry based on my personal support and resistance lines (just above nearest resistance on Thurs close). Friday morning the market came up to test the resistance and it held so I now have a downward bias on a end of day read. About 10:00 rolls around and I start to see some buying come into the market. My intraday system was showing very oversold readings so I felt the market was going to try to make a run at the resistance on probable short covering as they book profits. I decided to take my 3 points and wait for the pop. 30 seconds later AG beat his drum and the spoos dropped 10 points in 1-2 minutes. Knowing news many times overrides TA I decided this was just something I had to deal with, no biggie. Problem was it seemed to effect my decisions the rest of the day. This is a common problem for me and I was wondering how others get put past trades in the past. I usually just leave and go golfing but I was wanting to get back into the proper short position so bad I struggled the rest of the day with it. Another problem I have is trying to get the "perfect" entry/exit. Nailing long entrys at support and shorts at resistance is just too hard. I find myself letting trades go if I do not hit it correctly. What do the experienced daytraders do on entries? Average in, chase up to a point, let go....? ht david

To: Eric P who wrote (3404)	8/29/1999 9:21:00 PM
From: KM	Read Replies (1) \| Respond to of 18137

Here's something that I got in email today from the Linda Raschke site. Very good points: WHAT MAKES A TRADER SUCCESSFUL - Mark Cook Many people have asked me over the years what it takes to be a successful trader. The answer is not clear but here are a few thoughts to ponder and apply. First, you must have a complete commitment to trading and do it full-time. If it is a hobby or a secondary pastime, I know how the bottom line will be - a big minus. Trading must be addressed as a profession because if you do not treat it as such, let me assure you, those who do treat it this way will separate you from your money very quickly. Secondly, you must fit your trading habits to your individual personality. If you are an impulsive individual, your style will reflect more trading than a calculating individual who waits for all the indicators to fall into place. The personality factors more than any other factors I know will determine success or failure. If you are an emotional person, admit that you are and structure your trading habits to make emotions a positive influence, not a negative one. If you are either greedy or fearful, that will affect your decision making on a position and without recognizing the governing emotion, your decisions will tend to be wrong. When I experience emotions in the market, they tend to be fear. Whenever I am the most fearful of the market, I recognize that at these times there can also be some of the best opportunities. Whenever my fears become overwhelming, my discipline tells me to buy or sell, and discipline must win out or you are doomed to failure. The work ethic can never be overstated. I watch the market all day long from the opening bell to the closing bell. I have kept diaries on every day in the market for the last nine years, sometimes having over 40 entries in my diary per day. If I do not do my work, my profit suffers. There is no short cut in trading and the market will quickly find if you are lazy. Planning is the objective part of trading. Start with the worst case scenario and work from there. You will never be more objective than before you execute a trade. Once you are in a trade, emotions take over. The plan must be in place before the activity takes place. Determine a plan that tells you when you are wrong and admit it. Get out, retreat, and live to fight another day. As the day progresses, know how much money you have made or lost. It is much like knowing the score of a basketball game at every instant and you are the coach. Trading is a job and your paycheck is determined by your ability. You can only maximize your ability if you have all the information. The key to S & P trading is to live by the rule that "a dollar made should be kept." This means that profits should be guarded like Fort Knox to keep losses from stealing your net worth. Enter every trade with the understanding of your risk, not your profit potential. If you can honestly answer to yourself that this risk is acceptable then the trade should be implemented. What happens is that human nature causes greed to become a focal point in minds. This thought of "how much money can I make" dominates the mind set and blots out the negative of "how much money can I lose". Until your focus is entirely comprehending the negative, or losses, the positive, or profits, will allude you. Many times I have seen people trading the S & P Futures to have a very profitable run of short duration. The 'walk on water' conviction does one thing, it enables you to get to deeper water before you drown. The mistaken air of confidence is just an emotion that precedes the consumption of humility. Let's look at one last rule - a must do. Have complete faith in your indicators. Many times your indicators give a buy or a sell signal and you don't follow it because you just don't have the confidence that this time the signal is right. Successful traders believe in their indicators but are also very aware that nothing is 100% foolproof. Not taking a trade that is set-up using indicators you have developed is like calling yourself a liar. The indicator is a product of you telling yourself to do a trade and you respond by saying, " Indicator, you are not giving me a true signal." Grade yourself a 'red F' and go sit in the corner. The best advice I can give to anyone who aspires to become a trader is to observe those who are successful. Any information that you can procure on trading philosophies, trading mechanics and trading techniques of the pros is well worth your while. If learning from those who have experience cuts down on your learning curve time, isn't it worth it? I have heard persons say that they were going to learn by themselves. Learning for yourself will work if you have the time and the financial resources. Stubbornness and pride can be hazardous to your wealth. If you do pursue learning from the 'masters' do not be surprised to find that there are many different ways to trade profitably. Do not try to clone another individual because your personality is never exactly the same as theirs. Observe, learn and test the waters to arrive at the confidence level you will need to achieve consistent success. Finally, and most importantly, trading is a long-term commitment. I fervently believe that it takes several years to become a true professional. Each year you should become more consistent in your profits and enjoy more confidence in your indicators. My final daily rule is to take every trade and dissect it. This will provide a road map for success by knowing where you have been and what mistakes you can learn from and which to avoid.