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<span
>Thank you.<span
> I understand what your saying.
<span
>I have actually
been trading full time for 6 months and like you said, I’m break even.<span
> I guess only my brokerage firm has made
$10 per trade.
<span
>
<span
>My whole
intention here is to get everyone collectively involved in something.
<span
>
<span
>You say you
use support resistance. Care to
elaborate? Maybe I [we] can learn
something. I’ve been watching
Parabolic SAR to some extent. Does
that fit into your style?
<span
>
<span
>Do you
filter for a handful of stocks as well?
<span
>
<font size=2 color=black
face=Tahoma>-----Original
Message-----
From: nikku
[mailto:nikku@xxxxxxxxxxxx]
Sent: Monday, April 14, 2003 5:26
PM
To: Metastockusers@xxxxxxxxxxxxxxx
Subject: Re: [Metastockusers]
EXPLORER
<span
>
<font size=2 color=black
face=Arial>hello
uhehs
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=2 color=black
face=Arial>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. <font
color=black>
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=2 color=black
face=Arial>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. <span
>
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=2 color=black
face=Arial>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.
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=2 color=black
face=Arial>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. <font
color=black>
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=2 color=black
face=Arial>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. <span
>
<font size=3 color=black
face="Times New Roman"> <font
color=black>
<font size=2 color=black
face=Arial>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. <span
>
<font size=3 color=black
face="Times New Roman"><br
>
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