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Strategies & Market Trends : Are you considering quitting your dayjob to daytrade?! -- Ignore unavailable to you. Want to Upgrade?

To: Ron McKinnon who wrote (145)	1/18/1999 10:15:00 AM
From: Paul A	Respond to of 611

funny, Im starting to notice that a good percentage of successfull traders on s/i as well as books read to help me trade show most of these folks have experience in accounting, and psychology... which leads me to my next 'oh so smart' conclusion- money management, emotion... bottom line.. I started seriously trading over the last 2 years.. I have seen weeks where ill double my trading account, only to give it all back as I watch like a deer in the headlights when a stock is free falling.. I cant tell you how many times I sat here at night, no tv, no radio, just thinking 'it will never happen again.. learned my lesson this time and ill follow my 2% loss rule next time', only to go back in a week later and take a 20% loss.. Now im trading full time, and I sit here again after taking a nice 15% haircut on a stock last week.. I averaged down 2 times, and after all these mistakes I still waited another 10% before getting out.. After reading the book 'trading for a living' several times (after each major mistake) it still has trouble sinking in.. I dont position trade.. All good and great in a bull market, but one thing that attracts me to trading is unless the volume drops so ridiculously low, and we go thru a decade where the market is taboo and people start storing money under the mattress, wether the market is going up or down a trader will make money off the volatility.. Position trading now is rather simple because if it drops, just hold another week or two and if the company is fundamentally sound it will recover and proceed to move up.. like DELL, MSFT,.. In conclusions, I feel its safe to say playing the market is really not that difficult. A child could do it.. I believe this, regardless of how many people say it requires sleepless nights and constant stress.. I honestly believe its a game of numbers, managing your capital, no emotions (s/i has been a problem for me because it creates emotion),.. This is where I have failed and im not ashamed to say it.. I have an incredible success rate on trades.. Close to 80% and this has been achieved over the long term. I fail at managing my money and my risk.. I fail to take the loss.. Last weeks mistake took 1 hour, and lost me all the profit I made in 2 months. A mistake I have made over and over and over.. 80% success rate is worthless now as you can plainly see looking over my tax records, it all gets destroyed usually once a month with a nice fat loss.. for whatever its worth, if you plan to do this for a living- draft a serious strategy. How much money are you working with? The general rule is no more than 2% loss of cap. on each trade.. Cut out the emotion. Its as simple as a or b.. if it goes up? you made money. if it drops to your sell point? Pull the trigger.. If 5 in a row fail? keep moving to a new one or re-evaluate your timing, stocks your picking. Also never fall into the trap of 'if I had 100k in my account like him/her, I could make this work'.. More money in an account of a non-pro just means more to loss.. ...also important to realize that people like Jenna, Tim, and others I follow have been doing this for quite some time. They have become incredible at letting the winners run and cutting the losers.. This is why they can do 1-200% a year.. Dont try and match that success as I always try to.. this one again creates emotional trading, and boom... if you can do 30-50% in a year that is incredible. If you can double your money in a year, either you got very lucky or you already took your lumps for years and have become a professional..