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I have been away from RT for about a year now but I have returned to share
a little of what I've learned and to refine some of my methods.
A little personal history:
I started out on RT back in its early days as a newbie who was just getting
started in trading. (BTW I just do stocks). After developing a
fundamental approach I found too many "good" stocks would go down and stay
there or just wouldn't move up soon enough. I also had goals to make a
living at trading so I gravitated to Tech Analysis. Read tons - most of
which didn't give me a holy grail but good background. Started with a few
simple setups from "Hit and Run" & "Street Smarts". Being naturally
cautious I mostly broke even. Then I found a few of my own signals - based
on Bollinger Bands and named my first on "10 Pin" (from "Bowl"inger - get
it?). Again mostly break even. Something was always missing.
I lacked a decent exit strategy and money management. Read more - and was
directed by one of the members of this list (John Sweeney) to read his
book on Campaign trading. Great stuff and I incorporated Maximum Adverse
Excersion into all my STOPs. Still searching for a decent exit strategy I
figured I needed to get better at setting price targets. That search
brought me to Point and Figure Charting. I am now a convert of that method
of TA and only use moving averages etc as background. P&F gave me an
ingredient in my trading that was missing. A way to analyze the market as
a whole and decided if it is time to be playing offense (trading long) or
playing defense (protecting profits or shorting).
It was about this time that I dropped off RT because most of the talk was
about commodities and away from exits and money management. An area that I
always felt was my weakness. Over that time I worked on using P&F as my
signal generator for entries. Still no holy grail but trades shifted to
better than break even but still a long way from my goals. The P&F
methods for calculating targets are OK but you never know how long it will
take to get there. In the back of my mind I knew I wanted better cash flow
out of my trading, shorter trade length and again when to get out - exits.
I have been following Gary Smith from "the street.com" with his 5% target
and 6% SLP adding my own P&F refinements. It works - OK- but it ain't a
livin'.
Lots of pieces to the puzzle were floating in the back of my mind but I
couldn't put them together. Needed strategies that allowed the money to
keep working - not sitting in a long term trade slowly growing. (Day
trading does NOT fit for me. I position trade - a couple of days to
weeks). What size of trades to initiate? 50 shares on lots of signals or
200 share lots on the best signals?? When to get out? 5% target? 10%
target? P&F target? Trailing STOP? How close? I was at the point where
I said to myself "to heck with the entry signal - focus on the exit
signal". A statement that I've read in many trading books but until you
come to THAT conclusion yourself it is just so many words.
Recently I came upon a book that has put lots of those pieces together - or
at least given me a way to analyze a system with some of these ideas in
mind. "Trade Your Way to Financial Freedom".
I still have a ways to go to get to my goals. So I return to RT for
discussion and guidance. I've come a long, long way since I started on RT
and many of the "old" members on the list have helped. I haven't been on
the list again long enough to know recognize any of the names.
I'll also help anyone who hasn't gotten as far as I have yet.
Where I am right now? I HAVE FOUND THE HOLY GRAIL - it is the 6" of space
between my ears. Problem is I can't see in there clearly yet. I still say
"to heck with the entry signal - focus on the exit signal". Well maybe
not to heck with the entry but I have to spend more brain power on exits.
Got to develop better ways to "let the profits run". I suspect it is like
playing basketball - you just have to keep playing and gain experience.
Still you should be able to model/learn from those that are better. So
any discussion or help on exits and money management is greatly appreciated.
Greg
BTW: The freshwater and saltwater fishing season is just about getting
started. Who can trade under THAT kind of PRESSURE??
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