18 year old trades

[NoDoji]

Quote from Hester:

NoDoji, you are the only person who has consistently commented on what this thread is about, my trading strategy. Thank you.

Thank you.

What you're doing can be very profitable as long as you exercise good risk management. I attached a screen shot with the results of my first 3 months trading, swing trading 1-5 days off major stock corrections on news. This was on a $180K account so it reflects a nearly 23% return in less than 3 months.

I can't emphasize good risk management enough. During this period of incredible beginner's success, I never used a stop loss. It just didn't occur to me because every trade was profitable. Then there were some trades that left me with large drawdowns, but lo and behold, they came back!

As you can imagine I was now programmed for disaster, and the bear market last fall took away my gains and more.

I became a much-humbled trader who had to claw her way out of the bottom and now struggles every day to regain the confidence I had during my first 7 months of trading, because as recently as this past spring I managed to throw risk management out the window and reduce a nearly 34% YTD gain to a 20% gain in a single month.

So I can't emphasize enough the importance of knowing your absolute max risk on every trade and sticking by it, never moving a stop except in your favor.

And most importantly, just because a certain pattern results in a profitable move 99% of the time, or just because a certain signal results in a profitable trade 99% of the time does not mean for a single moment that you should overleverage or leave a losing trade on beyond the max loss your account can bear.

I had an acquaintance many years ago who was an extremely successful short term trader. He lost absolutely everything (I mean everything, not just his trading account) during the 1987 crash while on vacation, fully leveraged and with no exit plans in place.

Someone on ET posted this not too long ago and I have it hanging on my wall:

“Being disciplined in the past isn’t good enough: on each and every trade you must be disciplined. Forever. Like a drunk in a program you can NEVER slip off the wagon.”

 

[Hester]

Quote from NoDoji:

Thank you.

What you're doing can be very profitable as long as you exercise good risk management. I attached a screen shot with the results of my first 3 months trading, swing trading 1-5 days off major stock corrections on news. This was on a $180K account so it reflects a nearly 23% return in less than 3 months.

I can't emphasize good risk management enough. During this period of incredible beginner's success, I never used a stop loss. It just didn't occur to me because every trade was profitable. Then there were some trades that left me with large drawdowns, but lo and behold, they came back!

As you can imagine I was now programmed for disaster, and the bear market last fall took away my gains and more.

I became a much-humbled trader who had to claw her way out of the bottom and now struggles every day to regain the confidence I had during my first 7 months of trading, because as recently as this past spring I managed to throw risk management out the window and reduce a nearly 34% YTD gain to a 20% gain in a single month.

So I can't emphasize enough the importance of knowing your absolute max risk on every trade and sticking by it, never moving a stop except in your favor.

And most importantly, just because a certain pattern results in a profitable move 99% of the time, or just because a certain signal results in a profitable trade 99% of the time does not mean for a single moment that you should overleverage or leave a losing trade on beyond the max loss your account can bear.

I had an acquaintance many years ago who was an extremely successful short term trader. He lost absolutely everything (I mean everything, not just his trading account) during the 1987 crash while on vacation, fully leveraged and with no exit plans in place.

Someone on ET posted this not too long ago and I have it hanging on my wall:

“Being disciplined in the past isn’t good enough: on each and every trade you must be disciplined. Forever. Like a drunk in a program you can NEVER slip off the wagon.”

I completely agree. Before I enter into one of these trades I first ask myself, what is the risk/reward. What can I make and what can I lose. If the risk reward is bad, I don't put on the trade even if I think a correction is coming. I answer that question before I answer all others. That gives me a good idea of where to cut losses and where I should take profits.

The only time I don't use a stop is in a small option position or a large cap low beta stock. An example of a large cap low beta would be a wal-mart. If wal-mart rallies 5% one day because of some news and I deem it an overreaction, I may short it or buy puts without a stop because a wal-mart is very unlikely to jump 10 or 20% in a day. An example of a small option position would be the FLEX position I am currently in. I risked $1000 on the trade but feel I am sufficiently leveraged to make profits. My max loss is the $1,000 I risked, which is roughly 3% of my portfolio.
Whenever I choose not to use a stop in those two instances, its because I do not want to get whipsawed out of the position, which has been a problem in the past.

 

[dirkd]

Hester its obvious you have no control over your emotions. Perfect example that you are not ready.

 

[exaltedangel09]

1 time out of 10 your plan will fail, and you'll blow up.

Keep the stops in & good luck.

 

[Kassz007]

Quote from Hester:


I DONT GIVE A SHIT ABOUT WHAT YOU THINK I SHOULD DO WITH MY MONEY.

If you wanna comment on my TRADES, or talk about my strategy, or propose new ideas for trades, I'd be thrilled to engage you in a productive conversation that we both can benefit from. If you want say how much money I will lose or what is the best age to start a hedge fund, or say how dumb I am cause I'm 18 even though you dont know me at all, or even speculate about my gender, then dont post it on this thread, PLEASE.

You are the one who cares about your money the most, and should therefore make you own decisions on what to do with it. I am glad you have realized this. Keep focused on the trades, weed out the bad advice, and embrace the good advice. If you can do this, you will learn a lot from some posters on this site. Most people who are trying to convince you you'll fail are likely those who were flipping burgers at age 18 and couldn't even fathom having the capital you have.

Ensure strict risk management and stay level emotionally. Good luck to you.

 

[Kassz007]

Quote from NoDoji:


“Being disciplined in the past isn’t good enough: on each and every trade you must be disciplined. Forever. Like a drunk in a program you can NEVER slip off the wagon.”

Great advice. One bad trade can ruin many many hours of hard work. There is no worse feeling than knowing you've just wasted an entire months worth of work.

 

[Hester]

put in a limit order for puts on MWA, below market price.

 

[Hester]

Wow check out arena pharma. Down 30 some-odd percent premarket on news about its weight loss drug. Then this morning it was down just 10 percent. I thought about getting long but figured the I missed it. Now its UP 15 percent on 40 times the normal volume, and its barely lunchtime!!

 

[Swan Noir]

Quote from NoDoji:


“Being disciplined in the past isn’t good enough: on each and every trade you must be disciplined. Forever. Like a drunk in a program you can NEVER slip off the wagon.”

WOW! If I live to be a thousand, NoDoji, I might not find a better mantra.

I think a lot of the psycho babble that passes for a way to control your emotions is crap. The beauty of this concept is that it is not about controlling anything but your actions. If I do this one right ... day after day, trade after trade my bet is my psyche will be in fine shape.

This one, if implemented as suggested, builds emotional strength much as spending an hour exercising every day builds physical strength.

Hard to think like an asshole when you are acting like a champ.

KUDOS, NoDoji.

Keep up the good work Hester. You are already on your way. Keep each individual play small -- as I know you are -- and allow the cumulative "feel" you are pocketing time to grow.

 

[Hester]

Quote from Hester:

shorted 200 shares of xeno port, xnpt, a few minutes ago at $24.77.

Typical overreaction that I see a lot in this industry. Pain reliever drug met mid stage trial goals and reduced pain with only minor side effects. they are partnered with glaxo smith kline, and they are flat right now.

Covered the 200 shares at $24.17. Didn't move like I thought it would today. These biotech stocks pull back sharply oftentimes. If they don't they usually go sideways or up slowly. This may trade sideways for a little while.