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While reducing position size to a "sleeping point" I can certainly
understand. However, advising someone to both reduce the position size to
20% of normal and then to seek FIVE TIMES their normal profit objective per
contract?????
Does anyone else see something wrong with this advice?
Bob
-----Original Message-----
From: nwinski <nwinski@xxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, April 02, 1999 3:05 PM
Subject: Re: was [Bull Market]
>
>
>Linda Swope wrote:
>
>> Regarding Norm's and others' suggestion of longer terms trades:
>>
>> I'm coming around to that point! I sure was ready to give up the stress
of
>> scalping! My new system sees the trades. I believe this system will
suit
>> my personality. All things point to go, but I've been afraid to pull the
>> trigger for one reason. I'm afraid to hold anything overnight. A stop
>> won't protect me from a major move overnight against me.
>>
>> Help me face that fear and I'll be ready to go!
>
>NW: Easy! Dr.Norm has the answer. Just cut your position size down to a
>"sleeping point". For example, if you are accustomed to scalpping five
lots,
>try taking a position with a one lot and then target at least five times as
much
>profit per contract. When you cut the position down to where it feels
boring and
>you should have done more, you have found the right size for your account.
Now
>that you are trading smaller and are better captilized, you will gain more
>flexibility in your trading. Trading smaller positions gives you the option
of
>taking trades with greater dollar exposure and when there is the occasional
over
>night extreme gap way thru your stop point you will have the option to
trade
>your way out of trouble. By allowing greater dollar exposure, you should
also
>experience a higher percentage of winning trades, as it will be much harder
to
>shake you out of good positions due to normal daily market noise.
>
>> My final pearls of wisdom are that one should see trading as a
strategy
>> game, similar to checkers or chess. One of the keys to winning in chess
is to
>> get your pieces in a position where you don't care what the opposition
does.
>> In fact, you want the enemy to try to hurt you.. Just let him take that
>> knight and you will take his Queen or put his King in check. Another way
to
>> put this is that AMBIVALENCE IS POWER! The source of ambivalence is
BALANCE.
>> If you have a balanced position, you have thought thru all the likely
outcomes
>> and most of the not so likely outcomes and you are prepared to welcome
and
>> manage those outcomes to your advantage. So, which ever way the market
goes,
>> you see it as an opportunity for which you will use to your advantage.
When
>> you adopt this approach, you don't care what the market does, so you have
>> little reason to be stressed by your trading. After some practice with
this
>> approach, you should be more profitable, more relaxed, and you should
have no
>> problem sleeping.
>
>Relaxedly,
>
>Dr. Norm,
>The Trading Doctor
>
>>
>>
>> > The bottomline is that the daytrader must undergo many times the
>> stress
>> >than does a longer term trader in quest for a return on capital that is
>> attained
>> >by very few and that probably more likely would be attained if they
>> lengthened
>> >their time horizon. Additionally, if one has a successful long term
trading
>> >strategy, there is no reason that one couldn't keep another job or
>> profession,
>> >entering orders before the market opens, and therefore maintain another
>> income.
>> >So the cost of daytrading is potentially loss of an income from another
>> job,
>> >business, or profession, paying high fees and commissions for quotes and
>> >brokerage, and unknown and unlimited personal and health costs due to
the
>> very
>> >high stress.
>> >
>> > I was a floor trader in Chicago for 12 years, so I know about
>> >daytrading.. It was alot of fun when I was in my 20s. It was less fun in
my
>> 30s.
>> >It was then, in anticipation of where I wanted to be in my 40s, that I
>> started
>> >to train myself to trade from off the floor and started a long journey
>> toward
>> >learning how to trade on a longer term basis. I had studied many traders
>> and
>> >money managers and concluded that the really big money was made from off
>> the
>> >trading floor on longer term positions. I don't think George Soros or
>> Warren
>> >Buffet do very much daytrading. Yet, they both started with relative
small
>> sums
>> >of capital and have built up their capital far beyond what most
daytraders
>> would
>> >ever dream.
>> >
>> > I have spent the last dozen years on a path that has taken me from
>> holding
>> >positions for as little as a few seconds to a few hours to now taking
>> positions
>> >that I sometimes hold for weeks or months. I am very happy in my current
>> trading
>> >and life style. I am now away from the trading floor, the high stress of
>> short
>> >term trading, and I live in a paradisic part of the world. I find it
very
>> ironic
>> >that the rest of the world seems to be rushing in the opposite
direction.
>> They
>> >remind me of the moth wanting to fly toward the flame, a brilliant but
>> short
>> >existence.
>> >
>> >Relaxedly,
>> >
>> >Norman
>> >
>> >
>> >
>> >
>> >>
>> >>
>> >> linda@xxxxxxxxxxxxxx
>> >> Climb the mountains & get their glad tidings: Peace will flow into you
as
>> >> sunshine into flower; the winds will blow their freshness into you &
>> storms
>> >> their energy, & cares will drop off you like autumn leaves. John Muir
>> 1838 -
>> >> 1914
>> >>
>> >> -----Original Message-----
>> >> From: Dtrader <dan@xxxxxxxxxxxxxxxxx>
>> >> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>> >> Date: Thursday, April 01, 1999 12:19 PM
>> >> Subject: was [Bull Market]
>> >>
>> >> >
>> >> >
>> >> >on the other hand, so do 90% of artists, musicians and most new
>> businesses.
>> >> >
>> >> >i'm not real sure this statistic has much relevance.
>> >> >
>> >> >dan
>> >> >
>> >> >
>> >> >
>> >> >-----Original Message-----
>> >> >From: Norman Phair <ericrogers@xxxxxxxxxxxxx>
>> >> >To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>> >> >Date: Thursday, April 01, 1999 1:59 PM
>> >> >Subject: Re: Bull Market
>> >> >
>> >> >
>> >> >:I have heard figures as high as 90% of the people that do day
trading
>> >> >:fail. No work, no reward.
>> >> >:
>> >> >:Norman E,
>> >> >:
>> >> >:> "Peter M. Beckwith" wrote:
>> >> >:>
>> >> >:> Great post, Ira.
>> >> >:>
>> >> >:> Not only are there more on-line trading commercials than beer and
>> auto
>> >> >:> commercials, but the content and substance of these commercials is
>> >> >:> completely off-line. The firms that sponsor these commercials
hire
>> >> >:> teams of lawyers to settle suitability of investment lawsuits and
>> >> >:> arbitration suits all them time from people who lost their
shirts(not
>> >> >:> to mention their homes) after daytrading on the internet for a
couple
>> >> >:> of months. You would think that after all of the horror stories
out
>> >> >:> there about people who didn't understand what margin was or that
if
>> >> >:> the stock goes against you x percent you have to meet the cash
>> >> >:> requirement, the firms themselves would take a more responsible
>> >> >:> stance. Instead, most of us who keep CNBC on in the background
have
>> >> >:> to watch an Ameritrade commercial about a mom and housewive who
can
>> >> >:> take the kids to school and throw some money in a biotech company
to
>> >> >:> the tune of $1700/day or the guy who owns his own island, etc...
>> >> >:>
>> >> >:> I don't know what we are going to see with this market, but one
day(I
>> >> >:> hope) we can look back and just laugh at how absurd those
commercials
>> >> >:> really were. I am hoping it is sooner rather than later and then
>> >> >:> maybe, just maybe the public will understand that trading is a
>> >> >:> profession, not a hobby that you take up in your spare time...
>> >> >:>
>> >> >:> Pete Beckwith
>> >> >:>
>> >> >:>
>> >> >:
>> >> >
>> >
>
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