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The premise was that the author of the option method used stops,
which should go well with the approach of letting the profit run. Once
the profitable move has started, use trailing stop and let it run.
An alternate method would be to run it until 100% profit and then sell
half of the position, and continue the trailing stops.
-----Original Message-----
From: Bob Heisler <bheisler@xxxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, April 02, 1999 2:24 PM
Subject: Re: was [Bull Market]
>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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