This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
All too often when we read trading books, we see a pattern that plays out perfectly. Then we go on to spot double bottoms, make our trade, and finally find out it wasn’t the bottom. We average down, the position comes back to break even, and we feel some relief. You know what happens after that. I laughed when I saw this chart. Although I don’t average down, and hold losers overnight (winners either), this chart reminds me of my own trading.
I would love to see at least one chart in every trading book like this. If I had a better grasp of the English language, I would write a book myself. I think its easier to write the book, than to actually trade. I would almost bet that many of the books I have bought are from washed out traders with enough knowledge to become dangerous.
Zoomie pointed out on Prospectus’ post that he believes it takes about three years to become profitable. If nothing else, after two years, we should have enough knowledge (and maybe a secret indicator or two) to write a book.
That’s Plan B!
And before everyone starts bashing Boogster, how many traders are willing to air their dirty laundry every single day without fail. I know I’m not. I will quickly drop out of the VO, and change my name. However, my fourth grade writing skills will be easily recognized.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
August 30th, 2007 at 8:42 pm
Ah, Boogster is the man. But I am going to post my returns on a friend’s account I am trading. It is below 25,000, so 3 daytrades per week. I will call it, “Daytrader on a budget.” What concerns me is that it will exceed the returns on my trading account. Real life, real drama, real trading. Coming to you soom on MtM.
August 30th, 2007 at 9:04 pm
I hope that chart is a joke and Boogster isn’t really doubling down and day trading with such huge stops (or no stops at all!) like he shows on that chart. You’re right that it would be a good chart for a fright gallery in a beginner’s guide to trading but it’s not something we should see a multi-year veteran doing.
August 30th, 2007 at 9:32 pm
Even now I find myself usually unable to get out at b/e when a trade has run far against me. It’s funny that the whole time I’m deep in the red, I’m thinking “just let me get out even” and then when it gets there all I can think is “let’s see if I can get a little profit.” When a trade is flat or only slightly red I don’t have a problem dropping out for b/e. Only the serious losses. Funny!
I get the feeling boogster’s got more than enough money to live on. Maybe that gets in the way of learning the trading approach we’re used to seeing. I have the fear of homelessness keeping me from averaging down. He probably doesn’t… and if he can afford to risk large sums maybe averaging down once or twice isn’t a bad strategy. I’d try it in his position.
August 31st, 2007 at 1:32 am
I definitely agree it takes a while to be profitable. I’ve been trading for a year and a half and I’m still not profitable. What I have learned from my own trading and just from reading other blogs is that the biggest problem people don’t have a plan they’re willing to stick to. If you can’t teach somebody else to trade like you in less than 30 minutes by following your plan, than you don’t have one. The key is sticking to your plan. Once you figure it out it doesn’t work, you find a new one. However, you must give it time. If traders did that from the get go I think they would be making money sooner. We all know that humans just don’t work that way, we have to find out the hard way. Good luck.
August 31st, 2007 at 6:54 am
zoomie: now that ur a big time money manager, don’t forget about us pikers at MtM…gl
August 31st, 2007 at 12:05 pm
random guy: i agree with everything u say…the only thing i would add is that the reason it takes a few years is prolly not the system, but learning about yourself…over time we either stop sabotaging ourself or find a different hobby
sometimes the hard way is the only way to truly find out…i wish u luck as well
August 31st, 2007 at 1:34 pm
I agree completely with John. I’ve been trying to trade for over a year and a half, embarrassingly enough. It has been an incredible struggle, but the struggle has been with me. Trying to come to terms with the lack of control, the imprecision, the unquantifiable nature of many decisions, the risk, and my own intense desires for correctness and control.
I’m a computing scientist by trade and for every question there is one correct answer which can be discovered through some intelligence and some hard work. Nothing like that exists in the market and it is extremely difficult for me to adjust to!
The biggest things I’ve learned in the time I’ve traded are all about myself - what styles I like, what risks I’m comfortable taking, what I need to make intelligent risks. I’m also learning a lot about my responses to fear, greed, danger, and hope and how they affect my thinking, and starting to learn responses to them.
It’s not easy, but it sure is rewarding.
Best of luck, BAT.
August 31st, 2007 at 3:36 pm
[...] if you haven’t read the comments on this post, check it out. Random Trader made sense on sticking to your trading plan, but Tyro was able to put [...]