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Gwenn Ael Gautier wrote:
> 1 - Don't trade to be right. What you label mental maturity hid a true
> desire to
> be right nevertheless.
I am not quite sure what to say. Don't most people want to be right /
correct when they develop a trading strategy and then enter a trade
based upon it. So of course I want to be right. But maturity and right
are two separate things.
> 2 - Trade your plan. Where was your plan? It should be laid out
> before, so you
> don't have to think about it midway, and start listening to all these
> greed and
> fear voices leading you off the trail...
Easier said than done. I have been at this about 1 1/2 years with most
of my (successful) trading since Oct. 97. Since I am still wet behind
the ears I am still learning. But I am beginning to be aware of several
thing about my trading. I position trade with several independent
mechanical trading systems. I also look at the daily charts for support
and resistance and where the price is in the intermediate term channel.
I would say that all of the above are part of a "mechanical trading
system", i.e., they are for the most part "objective".
The next area is the "subjective" decisions that need to be made that
are not made explicit by the mechanical trading system. This is also the
area that is improving as I gain experience. Something subjective might
mean that I am observing some weakness in an advancing price and decide
to go short before I get my signal from my trading systems, but I am
also knowing that this is also going to be the last up day from a
several day run. So I know at some point very soon I will be getting a
signal from my trading system. Or if I place a day trade and I go short
and then I realize that the sellers are drying up. Time to cover. (Some
times this would be done by intuition as well.)
The last area of my trading is "intuition". To me this is the easiest
but yet most difficult to act upon. It is easy in the since that I can
take a look at a chart or see something on the news and my intuition
tells me it is either going to go up or down and my intuition is usually
correct. The difficult part is that I had lost too many trades when I
first started to trade and I still have the emotional battle scares.
> 3 - Whatever you do, and however you do it, be systematic and
> consistent.
> Any other way will give you a few lucky gains, and most of the time,
> losses.
I am pretty methodical in my approach. I use the analogy of fishing on a
slow lake at times.
> 4 - Make sure you are consistently applying something that is indeed
> profitable.
> Hit and run on a small short is OK, if you know what you are doing.
> Know its
> drawbacks, and plan in advance for handling these. Here you were
> hoping, not
> trading. In the long run, it is going to hurt you if you don't plan
> for a
> profitable war strategy...
Actually this trade was part of a very well planed out strategy.Stop. I
was going to say that hope wasn't one of my indicators. And I've heard
that hope and prayer are not any indicators that come with Metastock or
any other charting software. But I have to say form a psychological
point of view, people do hope that their trades turn out well. So when I
read what you say about hope and trading it is a bit of a bull shit
statement. Now if a person is hoping more than planning a strategy then
yes that is not good. But if a person puts a great deal of effort into a
good strategy and hopes that it works ( while in the trade) then there
is nothing wrong with that. In fact, hope is probable some where between
fear and greed in the psychological battle.
Harley
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