Quote from wolfpacker:
Robert,
I have been following your journal for quite some time and you are one of the most focused, professional traders out there. Congrats on your focus, discipline, hard work, and results.
I have been investing for many years and have focused most of my time on longer term investments and swing trades. I am ready to move into the world of daytrading and have spent about 5 months studying and reading many approaches and tactics.(There seems to be endless ways to build a rabbit trap as you say). I have read most of the books on your list and many others.
I cannot seem to get very comfortable getting a setup of two I am comfortable starting with. Even though I backtest and I believe in starting out with small trades, I lack some confidence to move forward with this part of my system. Could you provide some insight that may make me more confident moving forward. I feel somewhat stuck where I am.
Thanks again and keep up the great work.
Wolf
Hello Wolf,
Thanks very much for reading my journal and for taking the time to make a post. Especially thanks for your kind words.
Its a good question that we are all faced with. Finding new ways to maximize our return for the effort we put in. I know I look for different time frames to trade in and currently been going out a week or two but staying very small in doing so.
One thing to consider when changing your time frame is to ask if its worth it. If your going to be sweating bullets and missing out on other trades due to the time devoted to new time frames it may not be worth while.
Your personality may be best suited to trade in the time frame your currently in and a focus there for new setups may provide a better return on your time and effort
On the other side of the coin its no surprise that the reason why so many fail is that they refuse to leave their comfort zone. Letting losers ride and cutting winners short is a classic example of doing what feels right is wrong.
If you feel that the backtesting and your other research shows you have a profitable method/setups along with your exits than you could micro size the trades to the point that your comfortable with. If your like me and pay a per share charge then maybe 25 shares or 50 shares would be a size you could trade and stick to your plan with. There are no rules (for the most part) that says you have to trade a minimum of 100 shares.
Another way is to just wait for low priced stocks to fit your criteria so that your outlay is small compared to your overall capital.
Remember that you don't want to get to caught up in any one trade, good or bad. The idea is to let the odds work in your favor from an edge that you develop and to stay small enough that the risk to ruin doesn't have much of a chance to get you.
I hope that I provided some help and please let me know your progress and/or choices with daytrading.
Respectfully,
Robert
