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Tom B. wrote:
> I would like to thank both of you for sharing your experiences with
> discretionary trading.
> I hope the list is really listening..
>
> I would appreciate it if you could share any money management strategies
> that you use for risk management (% or fixed dollar Amt., etc.), adding
> strategies, scaling etc.
> Do you pull $ out as you go ? etc. Any insights would be beneficial to
> all of us.
>
> Thanks in advance.
Hi Tom -
Glad to be of help!
Yeah, I really liked Bob Kodama's post too - A real insight into the life
of a real trader....I like the way he slept near his computer for the
alerts. <g>
Well, let's see. I generally decide how many contracts to trade based on
my conviction for a particular trade. Remember, my S&P trades last only an
average of 30-90 minutes with a TIME pattern really deciding how long to
hold. If a number of key factors line up and I get a real instinctive pull
saying " this is so obvious"...I load up to maximum day margin with full
size S&P's.
But...if I feel luke warm, I may even rarely do 2-3 mini's...or just pass
on the trade. It's all an ANALOG thing for me, not digital. Like a VU
meter has gradual levels from 0-100...I have gradual convictions.
I am strictly a counter-trend trader, attempting to buy or sell a
panic....never buy break-outs anymore....used to.
Well, maybe on a rare occassion, but for the most part, I usually regret
these "public trades". I look for these "counter-trend" entries to turn
into "with the trend" trades, of course.
I do not scale in/scale out ...just initiate all at one price. I know
Tudor Jones is a strong advocate of scaling in and out...so who am I to
say? In fact, on my big score in Oct, 97...I scaled out some of the
position on Friday, and thank God I held the bulk to the open on
Monday....It worked there.
I always pull money out of the account when I can. This keeps me sharp. My
biggest losses have usually come after a big score. (sound familiar?) This
is really true for me probably due to overconfidence. It's almost a way of
protecting myself from myself. Perhaps I will never do a "Larry Williams"
(10K to 1M this way) , but I personally cannot hack large positions (more
than 5 full S&P's) at this point...maybe later, maybe never.
I personally feel pyramiding is a mistake. I guess Ken Roberts started a
whole new generation of 'em out there.It seems everytime I do it I blow
what was a good trade. I start with a profit, then add, then the market
comes back to past my breakeven and I panic out. BTW, I am a very lousy
long term trader. I mean well, and do OK with forecasts, but cannot hold
through adversity.
In fact....I don't know if he's still around, but there was an English guy
who did psychological profiles for about $300. I saw a writeup in Club 3000
back in '93? and gave him a call. He sent me a questionaire (maybe 50
questions) and it profiled my trading psych makeup. It came out to be
totally biased to a short term, type 'A' personality. He later said that a
person like me would probably do poorly long term but has the potential to
do quite well short term. That was the best $300 I ever invested in
trading. I was so tuned to reading Gann, and all the long term stuff, I
thought long term was what I needed to do...but I guess as they
say..."beware of the man who knows himself well" <g> Now that I think of
it, Linda Raske recommended him in an article she wrote in Club 3000. I'll
bet Bo would have his contact info if he's still at it.
Well, that's enough for now. You won't be hearing much from me probably
'til next week 'cuz the market is starting to get going again.
Oh, I saw the CODE post about the "Master" system. Do you suppose that
this is the notorious currency system that was offered by a doctor in Club
3000 for $35,000, then $60,000???? Man, how things deflate in price
to their "real" value, huh?
Have a great week all -
Tom Cathey
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