comments on trading
Let me add my two cents on trading as I have given it an enormousamount of thought and have made many, many mistakes.
1) First and foremost understand your psychological makeup. What Imean by that - what makes you comfortable in investing in a company.Some people use pure technicals, others use fundamentals. Some acombination of both. Some people like fast moving stocks, otherpeople pick conservative stocks. Some people short stocks othersdon't. Some people day trade others hold for years. There is noright or wrong, but you need to figure out what criteria you aregoing to buy a stock and sell a stock.
2) Investing is about being risk adverse. Everything you do is about minimizing your risk.
3) You need to come up with your own methodolgy of trading that youfeel comfortable with (its all about minimzing risk, this is notgambling). Classes, books and people give you information to armyourself with, but you need to synthesize it into a methodolgy thatyou believe in.
4) Following someone else blindly is a recipe for disaster.
5) Have supreme confidence in your own ability
6) Ignore all the cliche's. (don't buy a falling knife, diversify,buy at the top, etc). An investing methodolgy is not about cliches,it is about a set of rules you adhere to when buying and selling astock. (some could say my methodology is buying falling knives. lol)
7) When you buy a stock write the reasons why you are buying andfigure out your exit strategy before you buy it.
Some personal experiences -
1) Overall I have lost money following BT and Martens. It is notanything they have done, it is because I was investing blindly andwhen things went south I sold because I didn't have an understandingof there investing methodolgy. Emotionally I felt uncomfortable andtherefore made bad decisions.
2) I have taken BT class and did learn a lot, but I also have my ownbeliefs in investing. I took information BT gave me and used it inmy own methodolgy.
3) I personally have decided not to use EW in my methodolgy. If BTmakes a billion dollars with it I say more power to him. I know if Iuse it I will not be successful.
4) I recently created a methodolgy which I am following andtweaking. I have never been more successful in investing. I havebeen posting the companies and trades at the BT group. I haveinvested in companies like QLGC (recently bought), CAMP, STKL, CNQR(recently sold), ENG (just bought a couple days ago). I findcompanies that are oversold (based on technical indicators that icontinue to tweak) that have good fundamentals and have a goodstory. I then use candlesticks to try and pick the correct entrypoint. I use stockcharts scanning engine to find the companies andthen I review them.
5) I personally thought "Trading for a living" was a great book. Ialso like "The new market wizards: Conversation with America toptraders" This book showed that are many different strategies toinvesting.
I write becasue it helps clarify my thoughts and hopefully somepeople will benefit from it as well. Investing is an on goinglearning experience. Get your knowledge from where ever you can, but always test it against with what you feel comfortable with.And finally, no class or book will make you a successful trader. Itis information you need to UNDERSTAND how to leverage and APPLY inthe context of YOUR own personal trading methodolgy. (some people,no matter how smart they are, do not have the right personality to bea successful trader)
1) First and foremost understand your psychological makeup. What Imean by that - what makes you comfortable in investing in a company.Some people use pure technicals, others use fundamentals. Some acombination of both. Some people like fast moving stocks, otherpeople pick conservative stocks. Some people short stocks othersdon't. Some people day trade others hold for years. There is noright or wrong, but you need to figure out what criteria you aregoing to buy a stock and sell a stock.
2) Investing is about being risk adverse. Everything you do is about minimizing your risk.
3) You need to come up with your own methodolgy of trading that youfeel comfortable with (its all about minimzing risk, this is notgambling). Classes, books and people give you information to armyourself with, but you need to synthesize it into a methodolgy thatyou believe in.
4) Following someone else blindly is a recipe for disaster.
5) Have supreme confidence in your own ability
6) Ignore all the cliche's. (don't buy a falling knife, diversify,buy at the top, etc). An investing methodolgy is not about cliches,it is about a set of rules you adhere to when buying and selling astock. (some could say my methodology is buying falling knives. lol)
7) When you buy a stock write the reasons why you are buying andfigure out your exit strategy before you buy it.
Some personal experiences -
1) Overall I have lost money following BT and Martens. It is notanything they have done, it is because I was investing blindly andwhen things went south I sold because I didn't have an understandingof there investing methodolgy. Emotionally I felt uncomfortable andtherefore made bad decisions.
2) I have taken BT class and did learn a lot, but I also have my ownbeliefs in investing. I took information BT gave me and used it inmy own methodolgy.
3) I personally have decided not to use EW in my methodolgy. If BTmakes a billion dollars with it I say more power to him. I know if Iuse it I will not be successful.
4) I recently created a methodolgy which I am following andtweaking. I have never been more successful in investing. I havebeen posting the companies and trades at the BT group. I haveinvested in companies like QLGC (recently bought), CAMP, STKL, CNQR(recently sold), ENG (just bought a couple days ago). I findcompanies that are oversold (based on technical indicators that icontinue to tweak) that have good fundamentals and have a goodstory. I then use candlesticks to try and pick the correct entrypoint. I use stockcharts scanning engine to find the companies andthen I review them.
5) I personally thought "Trading for a living" was a great book. Ialso like "The new market wizards: Conversation with America toptraders" This book showed that are many different strategies toinvesting.
I write becasue it helps clarify my thoughts and hopefully somepeople will benefit from it as well. Investing is an on goinglearning experience. Get your knowledge from where ever you can, but always test it against with what you feel comfortable with.And finally, no class or book will make you a successful trader. Itis information you need to UNDERSTAND how to leverage and APPLY inthe context of YOUR own personal trading methodolgy. (some people,no matter how smart they are, do not have the right personality to bea successful trader)
posted by davea33 at 8:35 AM
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