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Ulrich:
This is a wonderful concept. A great way to separate feelings
from your executing your system.
Pete
At 06:29 PM 7/11/98 +0200, bullcom wrote:
>Don,
>
>Lets start with the common knowledge that 80% to 90% of traders loose
>money
>trading. How could we consider it a winning game then. And if you begin
>trading with the assumption that you are in fact in a loosing game, you
>should know that every position you take is a loosing position - until
>it
>proves you other.
>Its lot said about cutting losses fast and since loosing sure is a
>normal
>part of the business, its essential to stay alive. So if I put a
>position
>on assuming its going to be a looser, I donīt need to wait a thousand
>dollars a contract to find out its a looser. The position is a looser
>right
>when I put it on, the only chance of not becoming a looser is moving in
>my
>favor right away. Right away is the problem. Random factors canīt be
>ruled
>out, so you need to give it some time, but since you have a looser on,
>its
>not necessary to let the market prove it a looser by hitting your stop.
>So
>you have nothing like a price stop, more a time stop.
>
>When you buy beans monday afetr the opening, why do you do it? Because
>you
>want the beans to move up the next week or tuesday - surely not, you
>want
>it move up right away. You have a high possibility that your timing is
>wrong, since you have a looser on, so if monday wasnīt the right day, or
>
>you are to early within the day, remove the position and try later
>again,
>no need to wait to see the beans move 10 cents against you, before you
>admit that your winning position turned out to be a looser. You are in a
>
>looser right away and if this position isnīt prooving you other fast,
>get
>out.
>
>With that approach you easily overcome the problem that you stay in a
>position too long, just because you want it to be a winner and have an
>ego
>problem with accepting a loss.
>I try hard to trade this style, but it still brings some ego problems.
>My
>winner/looser ratio got worse, but the losses are so small, usually a
>couple of hundred dollars with multiple contracts that the winner easily
>
>out weigh the problem and so my average profit/loss a trade surely got
>much
>better.
>
>Questions remain : Like when I put on some beans and an hour later Iīm
>two
>cents into profits, are the two cents enough to prove the position
>correct
>or should the market have carried the trade higher already, if it is
>indeed
>a position qualifying to hold onto.
>
>Maybe we can get to a discussion like that later. The big item is just
>the
>difference in attitude when entering the market. This attitude gives you
>an
>edge since its much easier to get ride of a looser than of a
>wanna-be-winner, you usually can go to bed without worries and pain.
>This
>makes the entire trading affair less stressy. It reduces the negative
>feedback and only allows positive feedback (almost, Iīm far from
>perfection). So it turns trading in a very positive experience by
>eliminating the big pitfalls the lurk around the corner.
>
>Hope it explains a bit about the attitude - Ulrich
>
>
>
>
petena9090@xxxxxxxxxxxxxx
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