I have not been good about my blog entries, but today in the IU chat room I mentioned that profit.ly and tradervue were great free assets and someone started bagging on profit.ly and I was very taken aback by this because I have garnered a lot from the blog entries that I have read here about people grinding thru the same situations that I am grinding thru today. I figured I should get back to blogging to hopefully inspire someone to do more, help someone get by a problem they are having, or to protect someone from making some of the stupid and avoidable mistakes I have made. Since my last blog a few thing have become incredibly clear to me, you need to be honestly critical of yourself in order to correct what you are doing wrong, you cannot give yourself leeway in this aspect. the more room you give yourself to mess up the more you shall mess up,...why because you can. In the beginning(still sounds like the bible when I type that) my mistakes were chasing and bad entries. Over time I was able to reel in the chasing, i hung a saying over my desk that i would look at all day that said 'if u missed it u missed it'....simple as that. The bad entries just improve over time, but to speed up the improvement i just picked up a habit from a trader named Nate Michaud, and that was to dabble in. By that i mean take a very small and insignificant enrty position and this eliminates all of the emotions. Before learning this method I would go in full size and when the trade would go against me amazingly fast I would be stuck there like a deer in the headlights, frozen and doing nothing til I would snap out of my stupor holding a fresh bag of shit and my portfolio is peppered with such efforts. I found when you go in very small sized it is not emotional instead it is analytical, is this trade working for me or is it not, and with the size being so small you can even let it go a little further to the point of oh yeah this trade is definitely not working for me and you can get out or not because the position is so small it just wont affect your portfolio, and if it is working then you can size up accordingly to the opportunity at hand. Up til now that is the one most important aspect I have learned. I understood that the moment I heard it but it still took months to creep into my trading style because I am human and like all other humans I think I am special and the beautiful truth is that none of us are special. Now That I have accepted the fact that I am not special it has all but eliminated my big losers. I would do great for a week or two and then one catastrophic loser that would wipe out all i had earned and more would come along. My other big takeaway from 6 months has been that every trade has a possible of 5 outcomes, a small winner, a big winner , a scratch, a small loser, and a big loser. As a new and aspiring trader all you have to do is eliminate one of these...the big loser and you are well on your way to becoming a successful daytrader. It took a long time for that to sink in. A few other tidbits that i have gathered on my journey. I think it is best to start with a small account, because i have been witness to some horrific events in my experience where i have seen people blow up a $100k account on one bad trade. I have a hard time even fathoming that. If you have the money, set it aside for trading but only have $5k or $10k available to youself to actively trade with. that is all you will need as a beginner unless of course you are special and are the next Mozart of fukn daytrading. Another rule I apply to my trading now is I try to stay below the $5 stock price, I really like $2 and less but try not to eliminate too many opportunities. I just found my worst losses were in stock over $10. In hindsight all of those trades were because of fomo which i have managed to control now so I may lift that rule, but just think about this analogy convert dollars to feet and believe me falling from 2 feet hurts a lot less than falling from 20 feet, if u dont believe me please try it.
Peace, Love and Aloha