Quote from PatientOperator:
Hi Matcha,
Thank you very much for your response regarding the stops. I need to fine tune mine as it is an important part of a trade. Every tick counts. 
I am glad that you got the book. Hope you like it. I re-read Marcel Link's Chapter 1 on "The Tuition of Trading" tonight. I like the way he put it regarding PPC and cutting losses. The analogy of playing great tennis and trading (pg. 11) is right on. The key to being a winning trader is to play not to lose. "If you hit the ball over the net 4 times, you'll win 80% of the points. Don't worry about winning points. Let the other guy lose them... It's easier to win when you switch your focus from trying to win to trying not to lose..." His tips on cutting losses (on page 12) was funny but also right on - "Handing out $20s" and how it relates to the importance of using protective STOPs to a bad trade.
When I first read his Chapter 1, I did not think too much about what he said on the learning curve that he suggested a trader needs 3 -5 years to get through the learning period. It just takes as much time to get a college degree!!! I thought it doesn't apply to me..... :eek:
Marcel Link also stresses the significance for keeping a trading journal as you have done it here. He also mentioned that paper (SIM) trading is an important step in the training programs of professional trading firms (pg. 19) that new traders don't trade live in their first 3 months but only intensive classroom learning and paper trading. I think you did the right thing on starting out committing the time in SIM trading. This will speed up the learning curve without having to pay too much tuition...
...
--po
The book is a great and pleasure reading. I liked it!
In order to be a master, you got to achieve 10,000 hours, it takes 4 years to study/work fulltime to master the skill. So 3-5years is the right time frame to learn how to trade. But in this career, 10,000 is not garenteed to be a CP trader... There are so much emotions to deal with. One blow out could wipe out everything. So we have to tell ourself as we learn, control risk, place stop, control limit loss.
But I think we can do it! Even though I might need to go back to full time job, Eventually I believe can make as a trader. I don't give up easily.
To avoid some major blow out, I need to stay in SIM. To tell you the truth, when I first started to look at the market, that was last April, I had no idea there is such thing called sim. There is such thing called stops. I thought Fundamental Analysis is the way to succeed in trading. I bought a book called fundamental analysis, I analyzed JPM, HP, CSCO and a whol bunch others I heard from TVs. I also briefly studied Benjamin Gramhan's formulas on stock future value. I did all the stupid forcast for each companies with "realistic" projections. I purchased those names last May, they did go up at one point. So I made some profits. I thought myself was a Hero at that time. Then I repurchased some other stocks in July, based all on my ridiculous fundamental analysis. Until December, all my stocks didn't do anything. So I was a little discouraged. One day, Friend's friend's friend who is a so called guru told me to buy some options, so I totally listened. I bought whole bunch of naked puts. In January, all the options went to 0 value. At that time, I was just traveling in Asia. My dream of shopping like a queen there went to toilet too. After I came back from trip, I thought that this is not the way to trade. My porfolio shrunk 25% over a month! Then I started to do research on trading and realized trading is the most difficult career in the world. Technical anaysis is the key to success.
Now I am thinking everything back, the blow out could be the best thing ever happened to me. If at that time, I did make a lot of profits from those options and stocks, I would have probably lost 50% or even 80% now because I would have put down more money.
I will have to still stay in SIM for a while... because I know I am still not ready yet...As you said, focus on loss first.
