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Very true indeed. Also strongly recommend Marty Schwartz.
Gwenn
gposnak wrote:
> A friend of mine made $300,000 this year. He has been a breakeven
> trader for the past decade. What is the reason for the change? He
> finally came to accept the fact that for him the daily market
> fluctuations were essentially a random walk. Starting with that
> premise he came up with a system based on a leading indicator and
> backed it with 100% margin on his $500,000 account. He was in the
> market only 20% of the time trading the short term swings of 2 to 4
> days (He uses a 1 day stop). What is astonishing is that he had only
> 1 small losing trade out of 15. What is the main reason for his
> success? I think that central to the turnaround is the change in
> attitude from thinking that he could forecast to humbling admitting
> that he could not. Once the faulty premise that he could forecast what
> a million traders would do was expunged from his mind, he could then
> focus on a game plan that might exploit a market inefficiency or setup
> or leading indicator. He realizes that the NASDAQ was up 80% last year
> and because he trades mutual funds, he must be primarily long, but he
> maintains that even in a bear market there will be rallies and so long
> as the sun moves from New York to Chicago to Los Angeles he will be
> able to make $.For an example read Marty Schwartz' Pitbull George
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