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Strategies & Market Trends : The Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (665)	4/19/1998 12:10:00 PM
From: HeyRainier	Read Replies (3) \| Respond to of 1720

[ Further Analysis ] To give you a better idea of the cause of my poor performance in the past, I categorized the losses into certain groups: By far, the greatest cause of loss was Trading Against The Trend, which accounted for over 70% of my losses. Another 15% came from being impatient, and the rest was just being plain dumb. And most of these came from the one year trading period I undertook to get a better understanding of the dynamics of trading and TA (which came near the end). Throughout this period, it was in fact my longer term investments that I took the time to analyze that was providing me with the majority of the profits to fund my losses. Embarassiing? Certainly. But I value these experiences more than any of my successes in the market, for as Primo Levi once said, "More is learned from one's errors than from one's successes." What I did to turn the situation around was to (1) Eliminate all trades that ran counter to the trend and (2) Exert patience and discipline in my trading. These experiences might explain why I am adamant about trading stocks that only go with the trend. What has happened now is that (1) My longer term investments continue to provide me with my profits, and (2) My trading is now providing me with profits as well, now that I trade with the trend. Both results are showing on the bottom line,whereas before, my undisciplined hyper-trading outpaced the slow-going profits from my long term investments. I think it's scary to expose my past faults and weaknesses on the public forums like this, especially when a few hundred people read this thread regularly (or so I estimate), but I believe it's more valuable to pass on these lessons to others than to keep it hidden for the sake of not looking dumb. I think some disappointment will be felt by some readers, for I am not omniscient and infallible. Far from it. I have gone through my period of initiation through loss and disappointment, but what has transformed me and made me stronger was learning from these lessons so I don't repeat the mistakes again in the future. "What does not kill me makes me stronger." Manage your downside, and attempt to eliminate loss, and you will find success. To close, let me quote Jack Schwager's conclusions from his interviews with the nation's top traders in Market Wizards: 1. All those involved had a driving desire to become successful traders--in many cases, overcoming significant obstacles to reach their goal. 2. All reflected confidence that they could continue to win over the long run. Almost invariably, they considered their own trading as the best and safest investment for their money. 3. Each trader had found a methodology that worked for him and remained true to that approach. It is significant that discipline was the word most frequently mentioned. 4. The top traders take their trading very seriously; most devote a substantial amount of their waking hours to market analysis and trading strategy. 5. Rigid risk control is one of the key elements in the trading strategy of virtually all those interviewed. 6. In a variety of ways, many of the traders stressed the importance of having the patience to wait for the right trading opportunity to present itself. 7. The importance of acting independent of the crowd was a frequently emphasized point. 8. All the top traders understand that losing is part of the game. 9. The all love what they are doing. I think some similarities can be drawn from my development. I intend to become as successful as those profiled in Market Wizards, and I believe I am on track to achieve these long term goals. Regards, Rainier Trinidad