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Hey, this is very good and very practical letter.
> There is a proverb: "A smart man is learning from other people
mistakes, a
> fool is learning from his own mistakes, and only an idiot does not
learn at
> all".
So far, by reading this interesting letter, I see more than half of
myself in a category of "fools" .
Now, I would be interested who invented such a proverb? I bet that it
is "smarts".
So, Albert Einstein or Newton, what
----- Original Message -----
From: Alexander Levitin <alevitin@xxxxxxxx>
To: <Anthony3@xxxxxxxxxxxx>; <omega-list@xxxxxxxxxx>
Sent: Sunday, July 23, 2000 2:40 AM
Subject: Re: Intitial Trading Methodolgy
> At 02:52 PM 7/21/00 -0400, Anthony wrote:
>
> >...exactly how did you find your trading style? Was it by
> >trial-and-error?
> >--
> >Anthony
>
> Dear Anthony,
>
> There is a proverb: "A smart man is learning from other people
mistakes, a
> fool is learning from his own mistakes, and only an idiot does not
learn at
> all". Try to be a smart man. I will outline general plan how I wish
I have
> started my trading. (Please, do not ask me how I actually started.
But to
> give you a hint: I am an imbecile.)
>
> First, I would read and reread and think through a few books left by
great
> traders and teachers of the past: Richard W. Schabacker, Jesse L.
> Livermore, for example. I would skip initially their trading
technique and
> concentrate on strategy of trading, on logic of trading on cardinal
rules
> of trading business.
>
> Second, I would read a basic literature on trading (classics are the
must).
> I would ask any trader who makes living from the trading and had
survived
> doing so for more then ten years (let say) to give a list of his
favorite
> books. When you collect those books, you will see many of the same
names.
> Make a note of different techniques that excite you (get your
attention).
> Check them out - do they work on the charts of what you attempt to
trade?
> Do they work in all kind of markets or only in specific ones
(trending
> market, sideways market)? If only in specific markets how to
recognize the
> market they are working in? If they do not work go to next one. It
may take
> a long time to find techniques that work, but if you do not have
them, if
> you do not know how to make money from the history chart, what are
your
> chances to make money trading?
>
> Three. After you found an acceptable techniques of trading, you need
to
> come up with a trading plan (trading strategy). It should specify
what and
> when you buy, and when you sell if you trade is successful or not.
Take
> your plan and go over all history of the instrument you will trade
(stock,
> commodity). If it is working to your satisfaction go to next step,
if it
> does not, improve it. If you can not make money on paper you can not
make
> money if real life (do not tell me about luck, I know all about it).
>
> Four. Start trading with the smallest position you can take. Do not
> increase your position until you are very confident that you plan is
> working under different market conditions. Trade you minimal
position for a
> year, two or better a full market cycle in your instrument. Do not
rash. If
> you could figure out how to make a penny a year for sure you will be
a
> zillioner in no time. In business of trading you could increase your
> business manyfold any time and you could have practically unlimited
> leverage. Plus, if you know how to make money, everyone would love
to give
> a lot of money to trade (like banks, for instance).
>
> Five. Analyze your every trade. Go to step one.
>
> Good luck.
>
> Yours, Alex.
>
>
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