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(I have about 20 years experience with futures)
For the past 3 years I have been in contact with PH D's that take
products from ideas to the sales floor. What is interesting to me is
the process and how it relates to what we do as traders. We buy or
develop a system or method. Then we go test it out (if possible) at
that time there is often the idea that historical testing on trade
station is all that is needed....but knowing what I know about drug
testing and development I suggest that there is more to this than that.
Did you know that there is a drug that has been shown to have variable
degrees of effectiveness for treating anything. This substance has
been tested more than 80% of ALL the drugs out there combined. The
drug has no side effects and is cheaper than an aspirin. I would sell
it but the FDA won't let me. ...The name begins with a P and ends
with and o and works because of belief...
Any way how this relates to us is that many traders do not take the
new system/method/drug ...oops strike drug... through a complete
test... they just implement. We give it to a broker with a few
thousand dollars and the broker doesn't die so it must be ok...if it
doesn't work out we can rationalize it somehow.
Last year I did this with stocks for a while...only lost a grand or
two. Then made a fortune the rest of the year ....trading based upon a
solid technique that tells me which way the market is going. ...I made
a lot of dough in sept-oct and went long oct 9. ...you know the rest
of the story....just look at the SnP.
This year as I was entering all those losing stock trades for taxes i
lived through the pain again. I decided to prevent that as best i
could. I opened an account at marketplayer.com and have been trading
stocks there..... Ok so i can't make a real nickel there but i can
develop the habits necessary to be a successful stock trader and that
is more important than taking risking 5-10k and trying again in stocks.
The result so far has been wonderful I have successfully gone through
the "stuff" that real money managers need to go through...Setting up
and utilizing money management....this is so easy you wouldn't believe
it.
Also I'm dealing with the emotional stuff of being bored with it. You
see trading is more interesting when your balance is going up....My
results stood at +3% profits for 2 weeks..the 3rd and 4th week..... A
friend reminded me that so far I was on track. Since i only used part
of my equity most of the time I was on track to making 60% to 120% a
year....in a very diversified portfolio. Also there is the temptation
to change the system along the way....I find myself looking at the
losers and saying what did they have in common so that I can eliminate
it or visa versa. ...Any way as we speak the marketplayer account is
up over 5% in a little over 5 weeks in a 20 stock portfolio. Now my
next area is to do a simulated account in futures.....Why??? I have 20
years trading experience and need an environment where I will develop
better habits.
One of them is my relationship to my broker. When ever I have five or
more winning trades in a row he talks about how his customers loose
money....He'll bend over backwards for me but he is part of the
dis-functional environment. ...Here I go with the simulated account.
I am going to use the one at futures for $10 a month and $2 a round
turn I can do it real easy. Then i have found that there are firms
that use the same computerized interface to trade with that have
reasonable rates.
If you have some ideas you can give me to support my success please
let me know...
What is my system?????...pattern based ...it gets about
4 trades a year per market traded. I can trade about 25 markets with
it ...4 trades per year.. Average trade lasts 3 weeks. ...Money
management here is important I am looking at a 100K theoretical
account that probably needs use up to 30K in margin at a time.
My exits on trades is different from what i have used in the past. I
use a cyclical feature that says if profitable exit not made by a
certian date .. stay in till the next date (if loss is not taken). The
advantage of this model is phychological. If i look at a chart and say
to myself it goes up here get out there is uncertainty as to whether
or not it will make it to that price. However it will always make it
to my stop loss or profit date. (oh yes i do have an exit for quick
high profits)
If you have any ideas that may support my road to success please share.
==
Big Lucky Dick
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