Greed and Fear
- Thread starter indahook
- Start date
Happy Saint Patricks Day! Especially to my better half who is 100%.
My 8th Grade teacher Mr Cooper (Irish
) gave us a class on the stock market. Real basic overview and how to read quotes. Then broke up the class into several groups and we had a stock picking contest. Our group picked a company name that sounded cool! I forget the name or actual results but I remember that we came in last. At that point I forgot about the markets but in retrospect it stayed with me. All those numbers we would check everyday. Changing for no apparent reason. I knew I wanted to be involved but didn't KNOW WHY. Fast forward to 1994 and an honorable discharge from the armed forces. I went to college for 1.5 years and took economic and psychology classes. The two seemed to go hand in hand. But I DID NOT KNOW WHY. I took 4 classes seriously 2 eco and 2 psych. Then dropped out. Classroom settings are not for me. On the job training is the only way I stay focused. Around this time we know what was happening in the US markets. So as I searched the help wanted ads I noticed the entire financial section would be filled week after week with stockbrokers positions looking to be filled. "Make 6 figures" they boasted. Done! I can do that...or so I thought. I hated being a salesman but stuck with it for 4 years because I was learning about the markets and getting professional licenses. I never made much money because I always did the right thing...sad huh? Yet I hung around brokerage. I couldn't FIGURE OUT WHY I still wanted to be in this field. Then in 2000 I said to myself if my stock ideas are so great that I am trying to sell them why not just trade the ideas myself. In 2001 I FIGURED OUT WHY I stuck with it. Trading is the only career in the world that ever existed for me. I had a few false starts during the learning curve..we all do. But this time it is sticking. Its my passion and cant envision myself doing anything else.
In addition to trading the SPY with my indicator I have two directional strategies. One long/short momentum strategy and one long only flat base breakout strategy. The FBB strategy scans my universe for dormant junk thats begun to move. Running daily scans usually produces 0-4 names. But for the last two months or so I have been getting lots of candidates. Its been more like 0-10+. My point being that when the junk flys it usually indicates a mature Bull Market. General sentiment about this is that since most of the "quality" issues have been lifted beyond attractive levels. The only things left to put cash into are the most speculative of names...JUNK.
But i`m currently biased
My avg hold per trade is 10 days and I am on day 6. Starting to feel like an eternity. And my minds reaction to those 6 days is telling me a move is underway. How do I know that a move is underway? Because i`m aching to trade and make a premature decision to do something. That is the absolute wrong decision so I know the right thing to do is stay short. Which i`ll say was hard after the move yesterday...
It amazes me that my body gives clues about the proper action to be taken. Its like being able to read my own tells.
Often when I feel the need to trade my face will get flush and cheeks burn. So I have learned that when my body has this reaction to NOT DO ANYTHING. Yesterday afternoon I was burning up...on fire. Body screaming "cover now and save some profits". But the mind was saying "play the %`s ..if you get stopped you get stopped...its only one trade in thousands at 1/2 your avg gain".Ultimately the mind won out. Never let the body win.
Excellent thread, indahook.
I also trade systematically now and I could not agree more with the difficulty to stay disciplined and do what the system wants you to do. Actually, my weakness is still with me taking my profits a little too early, by fear of losing them all. I track , in parralel, the "pure" result of the system and mine, and more often than not, the pure system has better results.
As you said, trading your personality is critical in this business. What I do, to satisfy my urges, is to keep a small account to "mess around". It does not harm me, financially, and it enables me to optimize the performance of my two systems, basically by leaving them alone !
I also trade systematically now and I could not agree more with the difficulty to stay disciplined and do what the system wants you to do. Actually, my weakness is still with me taking my profits a little too early, by fear of losing them all. I track , in parralel, the "pure" result of the system and mine, and more often than not, the pure system has better results.
As you said, trading your personality is critical in this business. What I do, to satisfy my urges, is to keep a small account to "mess around". It does not harm me, financially, and it enables me to optimize the performance of my two systems, basically by leaving them alone !
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