|
PureBytes Links
Trading Reference Links
|
David Bozkurtian wrote:
> I say double the indexes, or else why bother?
Anybody to bid higher <g>?
On more serious note, my own experience very much confirms what I heard at the very
beginning of my trading "career", but ignorantly ignored - a major issue to tackle
when trying to get better in trading is to learn yourself, in particular finding your
"pain threshold". In the markets you can make as much money as you wish. I believe
it's true. The catch is the higher return you expect, the more risk involved. Mind
that we are talking here not about chances to loose some or all money, we all a kind
of accept the idea that losses are probable and more, inevitable. No, here the issue
is your psychological ability to go through large drawdowns, streaks of losses, etc.
However good a system is (double, triple the indices), it wouldn't be really good if it
deprives you of sleep, spoils relationships, i.e. disrupts your life. The problem is that
no system testing, however thorough, or paper trading - all kind of training available,
will help to know yourself until you get into the real, with real money and excitement of
happening on the markets that is very difficult to avoid day in, day out. One pays for
this knowledge by his/her own money. To find some basic system which you are comfortable
with,i.e. whose "moves" do not exceed your "pain threshold", is the most important part
of making a good trading system. Unfortunately, this concept of "pain" is not marketable,
so all ads to advertise trading systems are filled with mind boggling annual return
numbers. Even if they are real (let's make this wild assumption for the sake of arguments
<g>), in vastmajority cases I ( the way I am as a personality) won't be able to follow
them to get these returns. Van Tharp in his book "Trade your way to financial freedom"
notes to the effect that there are million ways to make money in the markets, but it's
very hard to find your own one. By the way, all above is discussed in much better ways
in his book which I highly recommend if you are at the stage when you feel a need to learn
about psychology of trading. Also, the interviews with market "wizards" in J. Schwagwer's
books "Market wizards" and "The new market wizards" are very enlightening too.
Now, back to the benchmarks. Certainly, a trading system should be better than the
markets, otherwise why bother, indeed? If you have one that is better, AND you ARE
comfortable trading with it, work on it further getting concerned now with returns.
This is a sequence of steps to go, IMHO.
Thanks for bearing with me, was a bit too long.
Cheers, Vitaly
>
>
> From: URNMOR@xxxxxxx
> Reply-To: metastock@xxxxxxxxxxxxx
> To: metastock@xxxxxxxxxxxxx
> Subject: Trading goals
> Date: Mon, 14 Feb 2000 22:01:06 EST
>
> To be very successful as a trader what should one expect for a yearly return
> on their trades. I am not referring to a day trader or a florr trader but
> one whose philosophy is to buy and sell a position normally within 30 to 60
> days. I am trying toestablish a goal but I am also looking for a benchmark.
>
> Thanks for any assistance
>
> ______________________________________________________
> Get Your Private, Free Email at http://www.hotmail.com
|