hi guys (and girls
here's my little story. i'm posting it mostly for my own benefit (the way tutor benefits from teaching) cause i wanted to put my experience together and kind of look at it from the outside. I started trading in 99 I think with little capital. It was the mania time - a POS firm announces a web site and its stock goes up 50x. im sure you all remember those times. well many of you would say it was a good time to start because you could buy anything and it would go up. well it wasn't for me because i was going short. i tried to look at the companies that were shooting up and it was mind boggling how such POS could go up in such an extreme fashion. So being kind of a contrarian by nature and reluctant to follow the crowd I shorted those stocks. You didn't even need to know fundamental analysis to see that the forecasts of bright future for a POS that just announced a web site or something like that were complete nonsense. Anyways, I shorted them as they were shooting up. Every one POS that I shorted went down but I had to wait months and months while the stock was doubling on me. By the time it came down I was so scared I covered at breakeven. So that's how I spent maybe 1/2 year. I thought that I was being rational, I was being "right", the crowd was idiotic for running these stocks up and I was doing the right, "prudent" thing. Sadly I couldn't be further from the truth. I always put on huge positions relative to my equity. So for months my equity was tied up in losing positions but thats just icing on the cake. After half a year, I took another big position, it went against me, I disregarded my stop, became an investor, the usual sad story. Also I let some personal factors interfere with my decision making. Also regarding stops, I didn't really think I needed them. I kind of expected to be right every time, I don't know how but I did. I considered stops something that's too boring and probably unneccesary. So when that big position went against me I was blown out. I was out of the game. I went thru the typical denial stage of not looking at my account for weeks and trying to convince myself that I don't care about this "trading thing". I tried to forget about it, I occupied my mind with other things. But 1/2 year later I decided I wasn't going to be beaten so easily. As painful as my defeat was and as stupid and degraded I felt, I decided to keep at it.
Well I wanna talk a little about the reasons of my downfall. Well the reason is simple: it just seemed too easy for me. You joined any trading chat room and all you saw "supertrader sells ABCD +12", etc. rarely did you see someone posting a loss. It seemed like there wasn't much to it, it seemed like everyone and their grandma was making a killing. Naturally I didn't want to miss out. Noone in chatrooms was talking about risk management and taking losses. To be fair a few people were but very few. Most were just chasing the latest hot stock or craze or guru. Another big reason is I assumed a direct cause and effect relationship between firm's prospects and its stock price. I learned the hard way, that assumption is very false.
So anyways, I decided to keep at it. I haven't had the capital to trade so since then I've been studying about the market. Plus I figured why would I need the capital if I don't have a winning strategy. I got completely disappointed in fundamental analysis for obvious reasons. So I concentrated my studies on technical analysis and risk management. I learned many counterintuitive truisms such as you can win less than 50% of the time and still be a net winner if you cut your losses short. That's counterintuitive, ok? A good "stock picker" is only good if he picks more winners than losers right? Wrong. I also learned about trading with the trend. That concept is counterintuitive also at least for me. If something's "expensive"(high) humans don't want to buy, they want to sell(short) because the thinking is something will happen and the price will become "normal" (lower) again. I have't found a winning strategy yet but I feel like I've progressed a lot and I'm getting closer. I'm papertrading trying different stuff out. My timeframe is swing trading. I feel pretty stupid about the way I started out. I wanted something for nothing. I was taking stabs in the dark, completely didn't know what I was doing. I'm serious about succeeding and I will persist until I'm successful. Many successful traders have blown several times and/or spent year(s) before turning the corner. Sometimes it seems like I'll never get there but I look at many of you guys who are kicking ass and it inspires me and I keep at it. Meanwhile I found on the net many successful traders who are happy to "give back" for free, I think many of them post here on elite boards. I for one am thankful for that, you're my inspiration.
Sincerely,
Trader Kay
here's my little story. i'm posting it mostly for my own benefit (the way tutor benefits from teaching) cause i wanted to put my experience together and kind of look at it from the outside. I started trading in 99 I think with little capital. It was the mania time - a POS firm announces a web site and its stock goes up 50x. im sure you all remember those times. well many of you would say it was a good time to start because you could buy anything and it would go up. well it wasn't for me because i was going short. i tried to look at the companies that were shooting up and it was mind boggling how such POS could go up in such an extreme fashion. So being kind of a contrarian by nature and reluctant to follow the crowd I shorted those stocks. You didn't even need to know fundamental analysis to see that the forecasts of bright future for a POS that just announced a web site or something like that were complete nonsense. Anyways, I shorted them as they were shooting up. Every one POS that I shorted went down but I had to wait months and months while the stock was doubling on me. By the time it came down I was so scared I covered at breakeven. So that's how I spent maybe 1/2 year. I thought that I was being rational, I was being "right", the crowd was idiotic for running these stocks up and I was doing the right, "prudent" thing. Sadly I couldn't be further from the truth. I always put on huge positions relative to my equity. So for months my equity was tied up in losing positions but thats just icing on the cake. After half a year, I took another big position, it went against me, I disregarded my stop, became an investor, the usual sad story. Also I let some personal factors interfere with my decision making. Also regarding stops, I didn't really think I needed them. I kind of expected to be right every time, I don't know how but I did. I considered stops something that's too boring and probably unneccesary. So when that big position went against me I was blown out. I was out of the game. I went thru the typical denial stage of not looking at my account for weeks and trying to convince myself that I don't care about this "trading thing". I tried to forget about it, I occupied my mind with other things. But 1/2 year later I decided I wasn't going to be beaten so easily. As painful as my defeat was and as stupid and degraded I felt, I decided to keep at it. Well I wanna talk a little about the reasons of my downfall. Well the reason is simple: it just seemed too easy for me. You joined any trading chat room and all you saw "supertrader sells ABCD +12", etc. rarely did you see someone posting a loss. It seemed like there wasn't much to it, it seemed like everyone and their grandma was making a killing. Naturally I didn't want to miss out. Noone in chatrooms was talking about risk management and taking losses. To be fair a few people were but very few. Most were just chasing the latest hot stock or craze or guru. Another big reason is I assumed a direct cause and effect relationship between firm's prospects and its stock price. I learned the hard way, that assumption is very false.
So anyways, I decided to keep at it. I haven't had the capital to trade so since then I've been studying about the market. Plus I figured why would I need the capital if I don't have a winning strategy. I got completely disappointed in fundamental analysis for obvious reasons. So I concentrated my studies on technical analysis and risk management. I learned many counterintuitive truisms such as you can win less than 50% of the time and still be a net winner if you cut your losses short. That's counterintuitive, ok? A good "stock picker" is only good if he picks more winners than losers right? Wrong. I also learned about trading with the trend. That concept is counterintuitive also at least for me. If something's "expensive"(high) humans don't want to buy, they want to sell(short) because the thinking is something will happen and the price will become "normal" (lower) again. I have't found a winning strategy yet but I feel like I've progressed a lot and I'm getting closer. I'm papertrading trying different stuff out. My timeframe is swing trading. I feel pretty stupid about the way I started out. I wanted something for nothing. I was taking stabs in the dark, completely didn't know what I was doing. I'm serious about succeeding and I will persist until I'm successful. Many successful traders have blown several times and/or spent year(s) before turning the corner. Sometimes it seems like I'll never get there but I look at many of you guys who are kicking ass and it inspires me and I keep at it. Meanwhile I found on the net many successful traders who are happy to "give back" for free, I think many of them post here on elite boards. I for one am thankful for that, you're my inspiration.
Sincerely,
Trader Kay
