Disillusioned http://www.elitetrader.com/vb/showthread.php?s=&postid=1133695#post1133695
Quote from 2manywhiners:
This is a reality check. Log it into your checkbook, and find some satisfaction in knowing that you have been paying your dues. Not sure how long you've been at this, but guess what, you have not failed.
Payed, have you, all of your commissions? And still, after all of this time, have a trading account do you? Already know you, that which you need.
Okay, now that I'm off my Yoda trip, you need to find some satisfaction in knowing that you're not one of the 95%, or whatever it is, that failed at trading. You did not lose. Put that into your mind. Log that into your checkbook. Maybe you're not yet one of the 5%, but you never will be if you keep your current mindset.
"Every battle is won before it is ever fought."
I'm not saying that I drink from the holy cup, by the hand and the grace of God, or any of that Holy Grail bullshit. I don't. But when I started out I wasn't as lucky as you. My account was getting gouged. Bludgeoned to death very quickly. I had to learn, it is Kill or Be Killed.
Trading is simple... That being said... Trading is NOT easy. The winning plan is conviction. It is belief in what you are doing. Adhering to the rules, adhering to your guidelines. Develop a sound trading strategy. Target Profits MUST be larger than losses. If the expected per/trade win percentage is 1:1, then develop a plan that can continue to exist at 1:3. Losses MUST be limited. If your Target Profit for any particular trade is $2.00, and your Stop Loss is $1.00, but your actual Average Winning Trade (over a long period of time) is $0.75, then you are going to, on average, lose money. Trading is a numbers game, and getting the numbers right is half the battle. Over-exposure will kill the new trader. Many new intra-day traders who end up losing are in the market for 7+ hours a day. Why? Do you feel a need to get even with the market after a loss, so you jump right back in? Are you feeling a bit greedy, like you just gotta get that extra $0.05, only to lose $0.15 more? Are you up on the day, but down after commissions? Is that a good reason to jump in head first? Capital Preservation is of the utmost importance. You can NOT make money, if you run out of money. Put Capital Preservation above all else. Period. Risk Management is the name of the game.
Any Ego is too much of one. I am not a winner. I am not a Loser. I am a market participant. I am not winning. I am not losing. I am long. I am short. I am not up. I am not down. I have a vested interest in the market's direction and where it is going. Effective analysis is key, not an under utilization of available resources, not analysis paralysis either. Know what you need to know. Ignore the noise. Trade with the market. Go where the market wants to go. Ride the waves. Don't buy tops. Don't sell bottoms. The most important indicator is, and always will be, Price.
Quit going long during lunch in stocks that consistently chop or go down during that timeframe, even in a Bull market. If you trade intra-day, then trade intra-day. Do not take home a trade that was losing, only to find it gapped down even more overnight. If you have multiple trading time-frames, trade in multiple accounts.
Don't short Oil during a war crisis in the area of the world's largest supply of Oil. Not even if the Bollinger Bands, or the Moving Averages told you to do so. On the flip side, don't go long Oil after reaching historic highs during an oil crisis. It may go higher, it may not, but if it is not a trading vehicle that you specialize in, fight the urge and avoid it. Trust me, Cramer was not the first to coin the phrase "Pigs Get Slaughtered." Don't trade on fundamentals alone, if you are a short-term trader. Don't go long just because a moving average made a cross-over, it is a lagging indicator which means it has no bearing on future direction. Look at the orders, look at the ticks, look at the charts, look at the buyers:sellers, look at the market advances:declines, look at the corresponding exchange's direction, look at the sector's direction, how weighted is it in its corresponding ETF? What is that fund doing? Read its news, what is the sector news? What are its relatives and what are they doing? Have you found a better prospect yet? Collectively, what has all of this information told you? Go Long? Go Short? Avoid it altogether?
Like I said, Trading is NOT easy. But that doesn't mean that it can't be simple. In my opinion the most valuable indicators are not the ones on the price charts, they are all of the independent variables that come together to form a matrix around each trade. Look at all of the variables surrounding the trade, when a large percentage of these indicators match what the price chart is telling you, pull the trigger and make the trade.
Really, it's all only as simple as you make it. You break one rule, and you will lose clarity. You break a few, and those very same rules will end up breaking you.