First, my apologies for not writing the past three days... I've been a bit distracted by life. I love writing and I love that other people (my trading peers and superiors... and my mother) enjoy what I write. It's the same gratification one gets when they prepare a big home-cooked meal for a bunch of family and friends... and after that first bite you here that awesome "mmmmm" sound... followed by "this is so delicious." I LOVE THAT SHIT!! (of course that doesn't happen all the time...)
Anyhow, why you're here... to read about my trading experiences and lessons learned from those trading experiences...
Below is how whacked my trading has been this week...
Monday - lost $490
Tuesday - gained $510
Wednesday - lost $880
Today - gained $1,200... I actually made $1,400 on DHI, but I started chasing the bounce(s) after I exited my position and lost $200. Back and forth, back and forth. So I'm basically right where I was at the beginning of the week, which isn't a bad thing... it's just slightly frustrating, highly educating, and an all-consuming... THING!
I PM'd (private messaged) Muddy yesterday, frustrated with my "inconsistency" and asked him one question - what is the key to being consistent as a trader? He said, first off, I'm paying my dues... it takes a major investment of time to be a successful trader and after a while I'll start to learn the characteristics of how certain stocks move; to be patient... and of course have a bit of luck. Well said sir, well said... and thank you.
The big gains are great... but if all I do is hit home runs and strikeout, I've got a very inconsistent and non-rewarding trading career ahead of me (non-rewarding in terms of consistency, not monetary rewards). I've had enough inconsistency in my young life, so I don't want that to find it's way into my trading career too.
I'll continue with my baseball analogy from earlier... there are a different types of great hitters in baseball... you've got your Tony Gwynn type players who hit for high average, but don't offer a lot of power. Then you've got your Mark McGwire type players who can hit the ball a country mile, but don't hit for a high average. And of course there are few players that can do both - hit for power and high average... Barry Bonds and Alex Rodriguez.
My point here is I'm still establishing what type of "hitter" I am. Right now I feel like a McGwire type trader... obviously what I want to be is a Bonds or Rodriguez aka Muddy, type trader. That said perhaps it's not in my "genetic code" aka personality, life history, sub-conscious or conscious mind to be a Muddy type trader... which is ok... but I still want to be consistent.
Time will tell... thanks for reading and happy trading.
BottomFeederMillionaire (can someone tell me how to center this??? THANKS!)
7 comments:
Hey....
I love baseball and your baseball analogy's...that said,I know I'm dating myself here going back to the 50's but as a child of those times my baseball hero was Ted Williams....
I will never forget the quote he had when asked what made him one of the great hitters ,power and average,of all times.
He said "FOCUS"...to paraphrase he said..when I'm in the batters box there is nothing in the world then but me and the ball...then he said something that blew me away..he said "I have the "EYES" of an eagle,I can count every stitch on the ball as it comes to me at even 100mph"
I never forgot this,when I'm trading heavy and fast I'm in another world,just trying to count every stitch.
Noob,
Great post. I can identify with you because, with some of my trading, I think I was trying to hit home runs too. I'm now making an effort to be more focused, and just make consistent profits. Keeping stats on my trades showed how my odds were less than 50/50, but I would be up on my account each month because I would have a few huge winners and a bunch of small losers. But the problem with that approach is that a few major mistakes, a few big losers, or a big streak of small losers can set you back. Which is where I've been this month. So I'm changing my approach...taking what the stock and price action givesme, rather than trying to get a big profit each time. Focusing on the whole "red to green" thing for going long is one thing that I'm looking to do to improve my odds.
When you look at the most successful traders like Muddy and Tim Sykes, they're all consistent traders...focusing on high odds plays and getting their 5, 10, and 20% profits per position. Then, the occasional home run comes.
Here's the other problem with "home run" trading. When you're looking for the home run, you're trying to make a prediction what's going to happen over the next day or so. Some stocks can move by 30-50%, but they might do so over a day. It's easier to predict what a stock might do over the next few minutes or hours, which is why the consistency approach is better when it comes to trading.
I also think the consistency approach can help build confidence with trading. When trading for home runs, I was always trading "scared", and I would get shook out of winning positions. Or if I have a string of losses, I would lose my confidence. Playing more high percentage plays and consistency will help keep my confidence, which then only leads to more trading success.
Noob,
Check out my post for going long on prehits. May be a nice way to get consistent profits.
Noob,
Muddy has a great post here about his trades:
http://greenonthescreen.blogspot.com/2007/04/my-trades.html
Notice how most of these aren't home runs. Most are small gains, a few are big ones, and a few are losses. And that's my goal from now on. I want mostly green trades. If some are small winners, that's OK. I just want mostly green trades. It forces me to figure out what the high probability setups are.
Noob, weird, I was comparing trading styles to hitters just yesterday on the toilet, where I do some fine thinkin' i might add. Since I'm from the east coast I was like, OK, so Pedroia or Big Papi?
It's great you're thinking about this...I like Yngvai's ideas, too, just regular, green, reliable, occasional home run...and Muddy of course great comment!
Meanwhile what a crappy comment...I'm just saying how much I like everyone else's, ha.
You'll pull through my man, we all are experiencing similar things, it's normal phase of learning to trade we're going through, and in the end you and everyone else in this little blogging world will be better off for it.
I'd say being consistent is even more important if you have a small account. With limited day trades, each trade really needs to count.
WOW A great post-roll.I'll save this one. I'll frame it and put in the little room Matty :-) this is where many men get great ideas.LOL :-)
Enjoy your weekend guys!
Post a Comment