Best or Worst Trades Ever
- Thread starter rs7
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PubliasEnigma
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Well I equate sitting on your hands until the odds are grossly stacked in your favor with playing offense, for me defense and offense are one in the same, two sides of the same reality!
Publias
Back in May of '98 i had been following the riots in Jakarta very closely, primarily because I had been heavily involved in trading Telekomunikasi Indonesia (TLK), which is the principal provider of telecommunications services in Indonesia. I was heavily short TLK during the riots. I sensed that the riots had become out of control and something had to give. Soon later Suharto agreed to stop down. I flipped my short position and went long. I cleaned up on both sides of the trade. I'm not very proud of the fact that I prospered off of others misery but, I guess that is the nature of our business.
IMO there is a different mindset that needs to be aquired for trading(as opposed to a regular job).
In a regular job you are making money or not making money.
In a trading job you are making money or not making money, or losing money. There is a whole third dimension there. Now that I have figured this out I can sit for a day or two doing nothing, because there have been no opportunities, and be perfectly content. Sitting is an important and profitable part of the job.
When I first started trading back in 1975 I was convinced I was a trading genius, but it was only a roaring bull market. I found some cash in my account so I bought a uranium mining stock the day before the 3 mile island disaster. Finally sold for a 75% loss.
The best trade I would have made if my "full service" broker hadn't talked me out of it was also back in the mid 70's. I found MCI warrants priced at 2$ excersizable at 9$ and the current stock price was 7$. My broker told me "we have MCI service, but whenever I try to use it its always busy. (that fact alone should have told me something about MCI) Do you think ATT is going to let MCI get away with anything" I don't want to calculate what I could have made on that trade! What I learned from that incident was to drop my full service broker and get a discount broker!
Ed
The best trade I would have made if my "full service" broker hadn't talked me out of it was also back in the mid 70's. I found MCI warrants priced at 2$ excersizable at 9$ and the current stock price was 7$. My broker told me "we have MCI service, but whenever I try to use it its always busy. (that fact alone should have told me something about MCI) Do you think ATT is going to let MCI get away with anything" I don't want to calculate what I could have made on that trade! What I learned from that incident was to drop my full service broker and get a discount broker!
Ed
Dan is it my imagination or do we frequently end up disagreeing...I don't want to get on your bad side but it seems you have a habit of nitpicking points for argument's sake without looking at the deeper level. Surface level knowledge isn't much better than ignorance, in fact in some ways it could be worse because it breeds false confidence.
Defense is MUCH more important than offense in trading, no question whatsoever. None at all.
Do legions of traders wash out because they can't see the obvious opportunities?
No.
They wash out because they waste their precious capital on crap plays and emotionally frag themselves in the process, thus inevitably winding up busted out and scared when the golden play materializes.
'XYZ would have been a motherload but I was too emotionally scarred / my money was already gone....if only I'd waited patiently...' is the sob story of a million losers.
Traders don't need 'offensive prowess.' They need the patience to lay chilly until the big score comes. They need to preserve their capital and their emotional reserves to assure full strength for the easy layups and the fastballs down the middle.
And that, my man, is a DEFENSIVE game.
this one was my 3rd trade ever - some years ago. i got no clue about charts, t/a, etc.
i bought tobacco stocks after some stupid news (just had money that needed to be invested ...) - bought them on a lower top - already on their way down (stupid me). thought i hold 'em for a few weeks or months and then sell them for a nice gain.
well - i bought at 64 - they went down and found their bottom at 35 (i also didn't know what a stop is).
this thing really drove me crazy - but this time i started to learn about charts. i started to understand why things happened that way.
fortunately - the stock turned out to be a takeover candidate. more than a year after i bought it - it started to climb from its long bottom - and at the end i sold it for about 83 - more than 2 years after i bought it!
the point is - i learned very much - and at the end i even got payed for it - who could ask for more? so this was obviously a good and a bad trade.
edit: this one actually healed me from buy and hold.
i bought tobacco stocks after some stupid news (just had money that needed to be invested ...) - bought them on a lower top - already on their way down (stupid me). thought i hold 'em for a few weeks or months and then sell them for a nice gain.
well - i bought at 64 - they went down and found their bottom at 35 (i also didn't know what a stop is).
this thing really drove me crazy - but this time i started to learn about charts. i started to understand why things happened that way.
fortunately - the stock turned out to be a takeover candidate. more than a year after i bought it - it started to climb from its long bottom - and at the end i sold it for about 83 - more than 2 years after i bought it!
the point is - i learned very much - and at the end i even got payed for it - who could ask for more? so this was obviously a good and a bad trade.
edit: this one actually healed me from buy and hold.