If you could do one thing better - what would it be?

[pixel]

I realized that cutting losses early was the way to move forward. This has stuck with me ever since, and today if a stock moves against me, I'm out, it's as easy as that. Sure I miss some opportunities, all the time. I don't beat myself up over it, I just move on, or re enter at a better time. The stock has to make me money from the moment I buy it. That's it for me, that's a rule I live by everyday. It takes real skill to lose small amounts of money often.

Thanks MD,
You've made a terrific journey and presented it well.
Especially the rule about cuttig losses early and not fret about missed opportunities - that's something many of my trading mates struggle with. So much so, that I've stuck the following quote over my screen. And posted it in full on a blog of mine:

A piece of advice from Phil Carret’s The Art of Speculation:
If you have 1000 shares of a stock worth currently, say, $9, disregard entirely the price you paid for it. Rather ask yourself this question: “If I had $9,000 cash today and wished to buy some security, would I choose this stock in preference to every one of the thousands of other securities available to me?”
If the answer is strongly negative, sell the stock! It should not make the slightest difference whether the stock cost you $5 or $13.
Your entry price is totally irrelevant, but the average punter gives it considerable weight.

 

[TulipFX]

To stop looking for the perfect setup................

That is why I automated trade. So that I wait for the perfect set up. Why do you say you want to trade set ups which aren't perfect?

 

[TulipFX]

Thank you for that MarketDepth. I enjoyed reading about that. I was still in primary school in 1987 and only have read about it. Please find time to tell us more about your journey.

 

[burglar]

... Hope you enjoyed the read.

I enjoyed the read! But, pray tell, how did TulipFX spot that you had a good history to relate?

 

[TulipFX]

I enjoyed the read! But, pray tell, how did TulipFX spot that you had a good history to relate?

He mentioned that he had been around 20 years. That is a long time on the market. It seems he was being understated and it is more like 25. I am glad I asked.

 

[burglar]

Thanks MD,
You've made a terrific journey and presented it well.

Pixel,
I agree!:iagree:

I must be the most average of punters since an emotional part of my brain gives considerable weight to entry price (not to mention the record high that I had missed earlier).

 

[nomore4s]

It takes real skill to lose small amounts of money often

This is probably one of the most important things about trading that beginners & some experienced traders need to learn imo.

Live to fight another day

 

[c-unit]

In theory I want to be a longer term investor, but I keep looking at the prices of my stocks every day and it influences my mood. Like with Karoon Gas. Absolute roller coaster and I get pissed every time the price drops, but need to just remind myself about the long term, sitting on potentially great deposits etc. But gee it's tough. I guess this is my inexperience showing through.

Another is that I get caught up in the hype and end up holding on too long, like with Harvey Norman in 2007.

 

[Market Depth]

In theory I want to be a longer term investor, but I keep looking at the prices of my stocks every day and it influences my mood. Like with Karoon Gas. Absolute roller coaster and I get pissed every time the price drops, but need to just remind myself about the long term, sitting on potentially great deposits etc. But gee it's tough. I guess this is my inexperience showing through.

Another is that I get caught up in the hype and end up holding on too long, like with Harvey Norman in 2007.

Hi c-unit,

Have you considered learning how to do point and figure charting? This can remove allot of the 'Price Noise' your seeing on a daily basis. Some would consider it 'Old Fashioned' in todays market Though I still use it even to this day

 

[TulipFX]

Hi c-unit,

Have you considered learning how to do point and figure charting? This can remove allot of the 'Price Noise' your seeing on a daily basis. Some would consider it 'Old Fashioned' in todays market Though I still use it even to this day

I have some systems which I use renko charts on too. It also does a good job of removing the noise from the market.

 

[burglar]

I do not know of these concepts.
Are they even remotely similar to moving point averages?

 

[Market Depth]

I do not know of these concepts.
Are they even remotely similar to moving point averages?

Hi Burglar,

P&F Charting is very Similar to moving point averages, but less math involved Kind of like 'Shorthand' for price action in stocks or FX or anything really. It's been around for well over 100 years, was one of the first books I read actually, but I'm not that old

Have a read here, should explain the concept all be it briefly.

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysisnf_charts

 

[TulipFX]

I do not know of these concepts.
Are they even remotely similar to moving point averages?

Renko charts can be explained here: http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:renko

 

[burglar]

Hi Burglar,

P&F Charting is very Similar to moving point averages, but less math involved Kind of like 'Shorthand' for price action in stocks or FX or anything really. It's been around for well over 100 years, was one of the first books I read actually, but I'm not that old

Have a read here, should explain the concept all be it briefly.

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysisnf_charts

Hi Market Depth,
Thanks. I'm off to study ... well, skim read at very least!

Renko charts can be explained here: http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:renko

Hi TulipFX,

If there was one thing I could have done better today, it would have been to research these concepts before I posted. Thanks for the head start.

burglar (with lower case 'b' * deeply significant, I'm told)

 

[burglar]

... It's been around for well over 100 years, was one of the first books I read actually, but I'm not that old

Ahhh, the beauty of books ... still readable after our forefathers (authors) have died.

 

[grandia3]

Hope you enjoyed the read.

that's a fantastic story, hope you write the part 2 soon
I was still in my mom's belly in 1987

I have just started trading 1 month ago, and thus haven't made mistake yet (that I know of
I am keen to learn so that I don't make fatal mistake

 

[forexdiscussion]

Everyone has weaknesses. Things we should be doing better. Some recognise them and attempt to work on them. Others perhaps do not see the problems, which could be a bigger issue then the problem itself.

So in your trading - what's the one thing you could do better?

What are you doing to improve this part of your trading?


My weakness is losing faith in my systems. I can historically test and know bad periods can occur, but when it is real money which is being lost I can begin to doubt my system and look to tinker with it.

While tinkering and (hopefully) improving can be good in itself, I have in the past dropped systems after a rough patch, missing the upcoming good results.

To help me against this I have better defined the expected 'down periods' so when they occur I can compare them to what I expect. If they are within expectations then I can 'not worry' knowing that the expectation is that they will soon come good. I can not worry because I know at which point I should become concerned - and logically if that point is not reached then I need not think something is 'wrong'.

What are you looking to improve on in 2011?

Hi Tulip FX,

One thing that could do better is to improve myself on how to read the market from the candlestick and price action. I made significant changes in my trading style in 2011 with throwing away all the indicator which is lagging in nature from my trading screen. Just focus and concentrate on the candlestick behaviour and price together with proper mney management, it significantly changes the result of my forex trading.

Thanks

 

[shouldaindex]

Let a proven safe strategy like an index fund do the work for me.

Instead, I'm always looking for the next idea.

I guess humans never stop chasing more money and some other things.