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At 12:52 PM 7/28/99 -0500, kohath wrote:
>How much money does one make on an entry to a trade? I would suggest zero.
>It is not the entry that makes a trader money, it is the exit.
>
Dear Comrades:
An entry and an exit are the start and the end of the trade. It is the two
sides of the body that does not exist separately. What is the successful
trade? One that makes money? Well, it is nice, but the goal is not to win
the battle but to win the war. I want to pay a lot of taxes at the end of
the year, year after year.
So I need a plan, that includes one entry points and exit points. I have
complete control over my plan. My plan includes and based upon projection
of the market behavior. What is the good entry? It is entry executed as
close to the plan as possible.
After the trade is initiated, I do not have control over the market
behavior (unless one manipulates thin instrument, is that illegal?). And I
have a partial control over the exit points. (There are limit moves, there
are gaps, there are margin call and forced sales). What is the good exit?
Exit as close as possible to the plan.
Did trade made money? If plan included correct projections and market
delivered expected profit (even partially) and trade was executed close to
the plan you have a good profitable trade. If projections were incorrect
and market did not deliver expected profit but trade was exited according
to the plan it was a good plan and a good loosing trade (yes, there are
good loosing trades).
Now if your have a good strategy, then you trading will consist from good
trades: some profitable, some loosing, and still show profit year after
year. If your trades are good you are good trader and will make money (to
pay half in taxes and enjoy the other half).
May you all pay more then a million dollars in taxes this year.
Comrade Alex.
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