|
PureBytes Links
Trading Reference Links
|
hello uhehs
I rarely respond to posts like yours but I felt I
had to tell you - IMHO, you should take a few weeks and rethink your trading
plan. A 70/30 win ratio is so improbable that it is a bad idea to base your
plans around it. If you are just starting out, you should be very happy if you
are breaking even after 6 months of active trading. I am not saying that 70/30
is impossible, it is just very very unlikely. Also, it seems as if you are
counting your profits before placing your first trade. Do you have a clear
understanding of how many people like you and me blow out of the markets within
the first 6 months? The ration is very high - maybe 85/15 or higher. You should
ask yourself the following question - why do almost 9 out of 10 people fail and
what am I doing to make sure that it doesn't happen to me? The
rules you use to enter trades are far less important than your ability to stick
to a good risk management plan. You seem to be choosing a plan which involves
risking no more than 2.5% of your total equity per trade (you mentioned a $500
stop loss and it seems you are entering the markets with a $20,000 stake). This
is a little high in my opinion but not too bad. The first thing you need to do
is place a few trades and see how it feels when you lose - do you stick to your
planned risk stops? Do you go chasing your losses in the next trade and lose
again? Or are you very disciplined and are your entries working out? Keep a
diary of all trades and write down everything - why you entered, how you felt
when the position went for or against you, when you exited and why. Print out
all charts pre, intra, and post trade. Keep them and look back at them often.
You seem to believe that as long as you have a
winning 'system', you will be a winning trader. Nothing could be farther from
the truth. The simple system you are describing is neither winning or
losing - there are 100 different ways to generate entry signals that are just
the same as the system you have described in your first post. Thousands of
people have developed and tried dead simple systems such as this. I have
several indicators that I have developed over the years that
would probably seem to you to be the Holy Grail, because they just seem to
trigger off at the exact moment they should. They are not. The best
'black box' systems are ones that you and I will never ever see; they are not
sold - they have been constructed by dedicated mathematicians who spent years
working on them and are used by those who constructed them or by those who hired
the people who constructed them. I am not saying you can't create your own
- after all, I don't know anything about you!! Perhaps you have what it takes to
spend the thousands of hours necessary to familiarize yourself with the basics
of indicator work and then go on to apply what you know in a creative manner in
order to develop a system that can be the BASIS for profitable trading. If you
did, however, I don't think you would be posting here. But... THIS SIMPLE SYSTEM
MIGHT WORK JUST FINE!! It all depends on your discipline.
The fact is, judging by your posts, the best chance
you have is to become good at the non-system aspects of trading - the
psychological aspects - and to make sure that you don't make the same mistakes
that have been made by thousands of people just like you who went into the
markets thinking - 'Hey!! This software seems to show winning trades!! I could
make money doing this!!' Seek out people who have won and then seek out people
who have lost and get them to tell you why they had the experience they did.
Write out your rules and then see if you can follow them.
There will be some on this thread who disagree with
my comments - they will say that there is nothing to be scared of and you have
to go for it and see what happens. Others will say that I am too pessimistic.
Still others will say that they have made it just fine without paying attention
to any of the things I have mentioned here. The fact that you were already
calculating how much money you will make is what made me write this - that is
just a very bad idea. Forget about how much money you are going to make - it is
overwhelmingly likely that you will lose what you have - this is not a matter of
opinion, it is a matter of statistics. You should be 100% focused on how much
money you can lose.
The last thing I will say is this - if you feel
that I am trying to discourage you, please understand - nothing could be farther
from the truth. I WANT you to do well, and I DON"T WANT you to make the same
mistakes that have been made by the vast majority of those who have come before
you - this is the only way you can make it. For people like you and I, the most
important thing is to have a good game plan and to stick to it.
BTW... the most important weapon in my arsenal
is... SUPPORT AND RESISTANCE. My S & R lines serve me better than any one of
the hundreds of custom indicators I have at my disposal. Good Luck - I mean it.
Yahoo! Groups Sponsor
ADVERTISEMENT
To unsubscribe from this group, send an email to:
Metastockusers-unsubscribe@xxxxxxxxxxx
Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
|