Successful Trading
- Thread starter rs7
- Start date
I am not a big proponent of legging into or out of trades. Not against it particularly either. This is a subject that has no clear right or wrong answer...or at least it can be debated forever. It is a matter of style and personality. Sometimes I will try to build positions. Usually more a factor of the time of day than anything else.
But exiting positions....I seldom leg out because I only exit if I feel the position isn't worth holding. When I do hold a part of a position, it is virtually always on an overnight trade that gaps against me, and I want to lower my exposure, but also don't want to completely throw in the towel. I do this rarely, just as I will rarely average against in the same circumstances. Again, this is just me. I know of many truly great traders that do it differently.
I NEVER leg out of a day-trade position.
BUT....for traders that have a hard time holding winners, I think it is a great idea to get accustomed to holding by keeping a small part of your original position just to get comfortable holding longer. I know that a lot of traders have this problem. So if you have (for example) a 1000 share position, keep just 100 shares....see what happens. In most cases it will not affect your overall p&l enough to matter much. However, you may get more comfortable by easing yourself into holding longer this way. I realize that beginning traders may only trade 100 shares, and this strategy is not applicable. But 100 share traders have other things to worry about. Holding time on winners is not a crucial issue for a 100 share trader.
I have been getting a lot of private messages asking essentially the same stuff. In an effort to avoid having to re-think and re-type, I will simply re-post what I wrote in another thread. Took me a while to find it, 'cause I couldn't remember where it was. But after a bit of searching, I found it. So for all of you that have been sending me Private Messages about how to best get off the ground as traders, here are my thoughts (once again):
For more further thoughts, if you missed it, see the first post on this thread. Not intended for quite as inexperienced traders as the above, but there it is if you are interested. Now you should know about everything I have to say that I believe can be of help. I tried to answer all the PMs, but my wife is getting nuts that I am spending too much time on this site. Not that I don't find it interesting and stimulating, but there is a limit. And I know I get pretty pissed when I see my son always playing Everquest on line. I don't understand what he is doing any more than my wife understands what I am doing, but I guess I can empathize with her. Hope this covers most of the bases, and satisfies the guys that PMd me.
As Commisso would say,
Peace and good trading!
For more further thoughts, if you missed it, see the first post on this thread. Not intended for quite as inexperienced traders as the above, but there it is if you are interested. Now you should know about everything I have to say that I believe can be of help. I tried to answer all the PMs, but my wife is getting nuts that I am spending too much time on this site. Not that I don't find it interesting and stimulating, but there is a limit. And I know I get pretty pissed when I see my son always playing Everquest on line. I don't understand what he is doing any more than my wife understands what I am doing, but I guess I can empathize with her. Hope this covers most of the bases, and satisfies the guys that PMd me.
As Commisso would say,
Peace and good trading!
I am sorry if you feel this is a contradiction. I guess I did not make myself clear.
FOR ME and me alone, I don't leg out of day trades. There is no right or wrong...just personal style. My suggestion to hold a small part of winning trades was for those traders that were having a hard time holding long enough. Just an excersize to get them used to holding good positions. Hope this explains.
Hope that you understand that I do not believe there is any one correct way to trade. Look back over what I have written here. It is just all a matter of personal style, which equates to comfort.
Good luck and good trading.
RS7
I agree....I too would rather be uncomfortable and make money. It sounds good to me as a concept. But I have seen that in practice, good traders adapt their trading styles to fit their personalities.Originally posted by Magna
rs7, while I fully understand the intent of your response, a recent post by another member is worth repeating....With that said, I don't find either of your comments contradictory.
Yes, it takes some adapting of your personality too. That is exactly why I suggested those who could not hold winners to keep a small portion....that is a way to help them find a way to ease into an uncomfortable scenario.
But there are definitlely traders that stay with what is comfortable and make it work. I don't pretend to understand why they do what they do, but it works for them.
I worked with one guy that never traded a nasdaq stock. Also never took overnights. One day a few years ago, he decided to do both at the same time for whatever reason. He bought Intel, held it as an overnight, and they warned. He lost about 10 pts. on it (this was when the stock was trading over 100...a few splits back). He never traded another nasdaq stock again, and never took an overnight again. Maybe if it had been a winner, he would be a different trader today. But he still makes a 7 figure income. I think he would no matter how he traded. He is just a GOOD trader.
I could give a lot of similar real life examples of how traders do stay with what is comfortable for them. Different strokes...etc.
Bottom line is that traders do need to learn. They do need to find what works for them, and what they like to do (comfort?). There is no one right way to trade (unless you believe that Super_ego has some real magic formula). I know so many really good traders. I don't know of any two that trade exactly the same way. In truth, I don't even think it is possible to sit next to a trader and copy their trades successfully. I have seen people try and it doesn't work.
I hope this isn't a dumb question. But if what you say here is really how things are, then how do people learn from other traders? I read today on ET where someone said it is better to work on a good desk at a bad firm. But from what you said here, I don't get why it matters? But it seems that I hear a lot of stuff like that. To get with good traders to learn. Do you disagree with this? And if everyone needs to trade their own way, how do you find out what way is best to try? How do you think some traders got to only trade one way and others the opposite like you said?
Hoepe this question makes sense. Thanks, Marc
MarcD.
I think I can understand your question. My feeling is that new traders need to hear more then "you need to find your own style of trading". How can you tell a new trader that and then leave him with no styles and strategies to look at. I think new traders befit the most from being around other traders, and viewing what they do. Once new traders have seen many different styles and ways of trading then they can start to find out what will work best for them.
I think I can understand your question. My feeling is that new traders need to hear more then "you need to find your own style of trading". How can you tell a new trader that and then leave him with no styles and strategies to look at. I think new traders befit the most from being around other traders, and viewing what they do. Once new traders have seen many different styles and ways of trading then they can start to find out what will work best for them.
How does someone become a good golfer, a good pilot or a good pastry chef? How does someone become a good ANYTHING?
Study, listen, practice, screw up, learn, repeat.
Just do it. Listen, learn, put ideas together. Then go do it. Make mistakes. Burn through thousands of dollars and months or years of learning. Its called tuition, just like med school. There's no secret, no special list of do's and dont's, no rite of initiation. Just learn what you can and fall on your face a thousand times and keep at it until you are making money or until you quit. That's it. JUMP IN. LEARN.