Transition: loser to winner

ChartingMarkets · Oct 25, 2003

Most of my success in trading comes from having a great defense.
I consider my game of trading sometimes to be akin to football. I try to play year to year as the number one defense with a great running game. I go for conservative yards.. and once I see them not covering the receivers (aka the easy money) I pass the ball and take the long yardage.

Defensive means...watching your stops. Make sure your losses are small and as for your winners, those stocks going in the right direction, you keep trailing stops on either physical or mental. Learn how to take partial profits on the way up and you will feel the pressure of trading begin to ease over time as you start cashing in green. Its a long marathon not a sprint in this game. The easy money in trading probably occurs 2 trading days per month and either you miss it or you don't. Its your job to stay alert at all times and know your game plan. Remember we are playing against experts and novices alike and you have to stay sharp out there in order to win those playoff spots year over year.

A friend of mine and a long time trader once told me over a decade ago when I was starting out, that it's the traders job to be ready for those couple of days where the money is just being given away. The other 90% of the time play defensive, defensive, defensive and move the ball methodically.

Hungry4Knowledg · Oct 25, 2003

Quote from hoodooman:

I started trading in the late eighties. my first winning strategy was trading the 30 year treasury bond from watching CNBC and plotting the interest rate with paper and pencil. The first year I made almost 50% on my money with only 4 trades.

My next winning strategy came from trading closed end funds. I was so confident in this strategy that I would risk my entire life savings on it. When they stopped acting right, I got out and then the bottom fell out. Scared me so bad that I never bought another one.

I thought that I had found the holy grail when I started swing trading. I worked for hours writing stock scans. The best I did was 21 successful trades in a row without a loss. Then that went sour.

I had a daytrading strategy that was based upon price action alone. Its the best strategy that I ever had. I made an average of 100 trades a day. It doesn't work any more.

I now have a working strategy but it is only good for one or two trades a day. I'm finding it harder and harder to make money.

It certainly hasn't been a bike ride for me.

regards

This is what really scares me. Do all strategies just quit working after a period of time? Do you start completely over at "square one" or do you try to reconfigure your original strategy? Is this something that has happened to every trader?

dbphoenix · Oct 25, 2003

Quote from Hungry4Knowledg:

This is what really scares me. Do all strategies just quit working after a period of time? Do you start completely over at "square one" or do you try to reconfigure your original strategy? Is this something that has happened to every trader?

Do all strategies just quit working after a period of time? Yes and no. If you're rigid about them, then the answer will most likely be "yes". But if you break them down into their components and see what's failing, you can then use the same basic strategy with what may amount to one minor change.

It pays to have several options at hand, at least one for each type of trade: breakout, test/reversal, and retracement. That way, you're not just sitting there twiddling your thumbs if the action on a particular day isn't the type that your one strategy is designed to exploit.

Cheese · Oct 25, 2003

Forget "Gann. Elliott wave, retracements, support and resistance, MA crossovers.." IN2WIN

Concur.

Its about numbers; not trendlines and other cabbage.

lindq · Oct 25, 2003

Quote from arnegr:

all traders are losers

Really? All traders are losers?

I''ve netted well into six figures thus far this year on low risk swing trades. I work where I want, when I want, and I answer to nobody. I pay no employees, no office rent, and I have no clients to report to. In June I traded from Hawaii and in September I traded from Rome on two week "vacations". I have two Mercedes in my garage - paid for in cash - and zero debt.

I file with the IRS as a "Trader in securities", and gain all the benefits of a self-employed business owner.

But funny, I don't feel like a loser.

chasinfla · Oct 27, 2003

Quote from lindq:

Really? All traders are losers?

I''ve netted well into six figures thus far this year on low risk swing trades. I work where I want, when I want, and I answer to nobody. I pay no employees, no office rent, and I have no clients to report to. In June I traded from Hawaii and in September I traded from Rome on two week "vacations". I have two Mercedes in my garage - paid for in cash - and zero debt.

I file with the IRS as a "Trader in securities", and gain all the benefits of a self-employed business owner.

But funny, I don't feel like a loser.

hear, hear!

DHOHHI · Oct 27, 2003

Quote from Pabst:

Plenty of guy's have lost at age 60, everything they made between ages 23-59.

To do so would require a lack of discipline IMO. To not reallocate some assets to "safe" investments as one accumulates more profits is foolish. Again, IMO.

DHOHHI · Oct 27, 2003

Quote from lindq:

I''ve netted well into six figures thus far this year on low risk swing trades. I work where I want, when I want, and I answer to nobody. I pay no employees, no office rent, and I have no clients to report to. In June I traded from Hawaii and in September I traded from Rome on two week "vacations". I have two Mercedes in my garage - paid for in cash - and zero debt.

But funny, I don't feel like a loser.

You should feel like a loser ... why don't you have 3 Mercedes? LOL

Seriously, you hit on some of the great facets of trading ... working where (and when) you choose as opposed to most in society that have to live close to where their job is where they face rush hour commutes. Tough to find a business with lower overhead than trading. I love the fact I can close up shop any time of day I want.

Daryn · Oct 27, 2003

If you truly believe you are not a winner in this game until you retire, then you need to change your definition of what a winner is!

Daryn

leapfrog · Oct 27, 2003

I read this over the weekend and thought it was relevant to this thread. I certainly need to re-evaluate my expectations about how long it usually takes to become profitable...

Quote from Linda Bradford Raschke earlier this year:

I think that the initial learning curve tends to be a bit longer than people estimate. On average, it tends to be around three years. Many people are attracted to this business because they perceive there to be unlimited upside in earnings potential. However, the first few years, many are lucky to just scrape by. The people that I see do best as traders are people who like to play games (such as cards, bridge, backgammon, etc) and understand game theory. You trade because you like to winâ¦.the dollars are a way of keeping score. The passion for trying to figure out the game must be there, because during your initial apprenticeship with the market, more likely you will be paying the market to teach you. It is OK to read books, go to seminars, learn from other traders in the beginningâ¦but ultimately if you are to be successful, you must learn how to play your own game. This means that you must believe in your own analysis, and not listen to other people or second guess yourself. And this type of confidence can only come from repeated observations and study over time.