Letters from a Pro Part I

B

bandit

Words of Hope, Words of Wisdom

I have been trading for 13 years now, and it has never been more difficult than it is now. I have seen hundreds of traders fall by the wayside over the past 2 1/2 years. But there is hope. Some developed strategies that have worked for many years involving 1 to 5 day strategies. Some true daytraders like myself have changed profit targets from 1/4's and 1/2's to .05 cents. We all do what we have to for survival. Try and find the people that are truly profitable. Trade with them if you can. There are some places like Paltalk that have some forums during the day where people talk about thier trades. Get as much REAL information from REAL traders that you can.

For all the new traders, their will always be opportunities to make money. currencies will always be volatile, commodities will work, futures and mini's, and then stocks. I know traders that couldn't trade stocks to save thier life, but currencies just fit them like a glove.

As many have stated, Trading is the hardest endeavor that one can undertake, but it is also the most rewarding. I truly believe that at some point in the near future (6 mos, a year, who knows), that trading will improve to some degree.

Once a month I will post a few words of wisdom, and I hope it helps. Let me know if you have any questions, I will help if I can.

Bandit:cool:
 
currencies are not necessarily easier, it is just a different animal. Most stocks have a kind of personality depending on the specialist, institutions that trade it, daytraders that trade it, manipulation that occurs ect... Some people do better on one stock than another. Same goes with different types of markets. I tried trading futures, and I found myself averaging losses until I racked up such a big bill that I threw in the towel. With stocks I do so much better.

bandit
 
I think the reason why currencies, and other futures contracts are "easier" is because they respect technicals better. They trend better and when you see a known candle pattern it usually follows through. In stocks a lot of known patterns constantly fail because of a million variables (market, economic reports, volume, etc.).

Think about it......there's a reason why every single picture in Steve Nison's (awesome) candlestick bible is of a commodity, currency or metal. Because technicals actually work in those markets. Not that they don't in stocks, but just not as well. You have to keep so many other balls in the air to make a stock trade work. Futures are about support and resistance, and not much else.

As for the market being bad? I'm not sure I agree. Maybe you are scalping the wrong stocks. Theres still plenty of $50-60 nasdaq stuff out there that moves 2-3 pts daily. Whats wrong with ERTS, INTU, AMGN, DNA, IBM, NVLS, KLAC, etc? They're all over the place like they've always been.

:cool:
 
Great point on Currencies. They do "follow the rules" much better. Technically they are a head above stocks.

As for those 50 to $60 nasdaq stocks. No matter who you are, if you take big positions to scalp in those stocks you will take big hits. As for me, and many that I know, the market has become so unpredictable, and no follow though, that taking the big position is not a good risk reward ratio so it is hard to have the big days without having the big draw downs as well. It is better to take smaller positions with manageable ratios to limit exposure.

bandit
 
This thread pulls together in one place in a coherent,
agreeable, debateable manner, a lot of the points
made in piecemeal and scattered among the many
other serious threads here on ET.

Have hit the thread "subscribe" link for this one.

Waitin' for some more good stuff.

And, let's keep "Letters" a zero poop thread while we're at at... :)
 
Bandit,

Your words of wisdom is like a breath of fresh air.

I started trading full time a year and a half ago and I couldn't have picked a worse time to start! It's been a struggle the whole time with some glimpses of hope of what it could be which keeps me motivated to keep working at it. I've been fortunate in that I made some money in the stock market during the dot.com years (albeit I didn't have a clue of what I was doing) and I was smart enough to save some of it for a "rainy day." I'm barely making a living but I keep working on developing my skill by continuing to trade smart, developing and testing new strategies, and reading everything about trading.
 
Manipulation is forbidden you know, it can't be :D

Quote from bandit:

currencies are not necessarily easier, it is just a different animal. Most stocks have a kind of personality depending on the specialist, institutions that trade it, daytraders that trade it, manipulation that occurs ect... Some people do better on one stock than another. Same goes with different types of markets. I tried trading futures, and I found myself averaging losses until I racked up such a big bill that I threw in the towel. With stocks I do so much better.

bandit
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