Gekko,
Well, this is one of the few threads here that touches close to home. I started out pretty much the same way you did. I've completely blown out twice (small amounts <$10k), been on the brink many times, only to luckily avoid margin calls and have my heavily margined position bounce back, and even though I made over $100k during the boom, I've given back more than half of it, but luckily still have enough for a trading stake. I used to hate taking money out of my trading account and racked up the ol' credit card instead. I traded from home, mainly position trading, but I never had any discipline or a trading system to trade off of. I was stubborn, held positions too long, doubled down into bad positions, always tried to catch bottoms and tops. I've read every trading book in the world, and when I talk to random people about the market, they think I'm rich because of "how much I know." You, of course, know this is not true.
I said "screw it" and went back to finish school, but as chance would have it, I ended up at a prop trading firm after graduation. This is where I learned discipline. During the boom days, I would sometimes hold positions TENS of points out of the money. Short OR long. I'd just double down when it "felt" right. I'd get back to breakeven and have endured emotional stress far beyond what would have happened if I had just stopped out. I did a lot more trades daytrading, made a little money, paid a lot in commission, but most importantly, learned DISCIPLINE. Daytrading's not for me though. I don't like the fast paced action. I don't like what it does to my stomach when I'm watching pennies tick by.
Now I'm back to position trading. From home. I'm still struggling, but I'm profitable and am confident that what I'm doing will work. I no longer take huge rips. If I take a .50 loss on a stock, that's pretty steep for me, my stops are usually no more than that. I trade multiple positions based on setups that I *KNOW* work well in THIS kind of market. You have to be confident in YOUR trades and YOUR setups. Just because someone else on this board made money off a type of setup, doesn't mean YOU will be able to trade it successfully. You won't have the confidence, nor the experience trading someone else's setup.
I set tight stops, and I let the winners ride 2-3 points or more. I follow the trend. I no longer try to step in front of a speeding train. I don't mind if I miss a point, if I can catch the next 3. I find that trading multiple positions helps a great deal, because you are no longer subject to "lost opportunity cost" if everything else goes, but you're just long 5000 shares of one stock. When the market gets less choppy, I'll scale up my size. If it becomes worse, I'll scale down my size. No reason to put your money on the line if you have any doubts at all. I'm finding that it's hard to keep my hands off the keyboard though. I keep making money in my position trades, but I give it back a little bit here and there, and in commissions when I try to daytrade. I assume that I will always pay the high and I will always sell the low. I will always be too late or too early. Therefore, it's not advantageous for me to daytrade, but to stick to my system and my discipline and only trade the setups that I know work. It's hard to keep my hands off the keyboard though. All those pennies flying by... hard to resist.......so I just play video games. Watch porn. Chat. Surf. Anything to keep me from pushing buttons to execute trades other than my setups. It's hard to find setups sometimes though. Need to put more of my money to work if I'm going to do this style of trading. I just ordered Metastock Pro 8.0, but I'm still waiting on it... backordered...sucks. Once I'm able to scan the market for setups that I know work, then I'll be set.
It's hard. Very very hard. But I know with a system, and with discipline, you CAN make money. It's that simple.
Well, this is one of the few threads here that touches close to home. I started out pretty much the same way you did. I've completely blown out twice (small amounts <$10k), been on the brink many times, only to luckily avoid margin calls and have my heavily margined position bounce back, and even though I made over $100k during the boom, I've given back more than half of it, but luckily still have enough for a trading stake. I used to hate taking money out of my trading account and racked up the ol' credit card instead. I traded from home, mainly position trading, but I never had any discipline or a trading system to trade off of. I was stubborn, held positions too long, doubled down into bad positions, always tried to catch bottoms and tops. I've read every trading book in the world, and when I talk to random people about the market, they think I'm rich because of "how much I know." You, of course, know this is not true.
I said "screw it" and went back to finish school, but as chance would have it, I ended up at a prop trading firm after graduation. This is where I learned discipline. During the boom days, I would sometimes hold positions TENS of points out of the money. Short OR long. I'd just double down when it "felt" right. I'd get back to breakeven and have endured emotional stress far beyond what would have happened if I had just stopped out. I did a lot more trades daytrading, made a little money, paid a lot in commission, but most importantly, learned DISCIPLINE. Daytrading's not for me though. I don't like the fast paced action. I don't like what it does to my stomach when I'm watching pennies tick by.
Now I'm back to position trading. From home. I'm still struggling, but I'm profitable and am confident that what I'm doing will work. I no longer take huge rips. If I take a .50 loss on a stock, that's pretty steep for me, my stops are usually no more than that. I trade multiple positions based on setups that I *KNOW* work well in THIS kind of market. You have to be confident in YOUR trades and YOUR setups. Just because someone else on this board made money off a type of setup, doesn't mean YOU will be able to trade it successfully. You won't have the confidence, nor the experience trading someone else's setup.
I set tight stops, and I let the winners ride 2-3 points or more. I follow the trend. I no longer try to step in front of a speeding train. I don't mind if I miss a point, if I can catch the next 3. I find that trading multiple positions helps a great deal, because you are no longer subject to "lost opportunity cost" if everything else goes, but you're just long 5000 shares of one stock. When the market gets less choppy, I'll scale up my size. If it becomes worse, I'll scale down my size. No reason to put your money on the line if you have any doubts at all. I'm finding that it's hard to keep my hands off the keyboard though. I keep making money in my position trades, but I give it back a little bit here and there, and in commissions when I try to daytrade. I assume that I will always pay the high and I will always sell the low. I will always be too late or too early. Therefore, it's not advantageous for me to daytrade, but to stick to my system and my discipline and only trade the setups that I know work. It's hard to keep my hands off the keyboard though. All those pennies flying by... hard to resist.......so I just play video games. Watch porn. Chat. Surf. Anything to keep me from pushing buttons to execute trades other than my setups. It's hard to find setups sometimes though. Need to put more of my money to work if I'm going to do this style of trading. I just ordered Metastock Pro 8.0, but I'm still waiting on it... backordered...sucks. Once I'm able to scan the market for setups that I know work, then I'll be set.
It's hard. Very very hard. But I know with a system, and with discipline, you CAN make money. It's that simple.
that's a good one.