Humble1 advice Part 1

Posted on July 19, 2005
Tags: General rant |

Some time back I asked for some advice on a particular forum, this is one of the replies I received. I feel it is useful to revist this every now and then.

I’ve been at this for 20 years. There are no short cuts. Some advocate simulated trading as the way to get profitable. It is true you will build skills while practicing, but there real hurdle to overcome are your emotions. Trading with real money has a way of forcing traders to ignore their trading plans so they hold onto losers. To become profitable you will need to become proficient at 2 skills. 1. Picking out good setups to trade. [become an expert at each one at a time] 2. Cutting losses fast. Sounds simple, but it is tuff to do. Eventually you will find your style by trial and error from simply trying many different techniques. The key is to have some money left in your account when you finally do. I started by trading 1 contract until I could find my footing. Trade light until you know what you are doing and have your technique down pat. BTW, breakeven for stocks is a good start. If you can figutre out how to cut your losses a little faster, or, if you had taken smaller postions [for wider stops with same portfolio risk], maybe you would have been profitable. That’s what you have to figure out.

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One Response to “Humble1 advice Part 1”

Trader Eyal » Blog Archive » Consistency on November 22nd, 2005 10:48 pm

[…] Trader Eyal Trials and tribulations in day trading and stock market investments. « Weekly Watch list - Take 2 […]

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