Question:
Sorry for the lengthy email. You need to know my position to answer my question. I have tried to become a professional trader for almost two years now, and right now I feel, “This is a load of c%!p”!! Is anyone making money trading or is trading the biggest hoax on the planet?”
After reading 47 books about trading (both fundamental and technical trading), the psychology of trading, and executing the “no lose” strategy, all without success, I do feel a bit insecure. Especially since I have a written a trading plan that I follow. I understand the importance of trading psychology (I have read Mark Douglas book “Trading in the Zone” several times), and I keep a journal. As far as a know, I do all the right things, but my account is still NOT growing. So, is there anyone actually making money trading, if yes, HOW?
Most appreciated,
Martin from Confusedville
Answer:
Martin, you throw a lot on a guy for a first date! I am going to keep this simple. I followed your path for some time early in my trading days. I too lost more than I gained. What made the difference for me is two things. The first is that I found a piece of trading software that actually works, meaning, it gives me a heads up on what is potentially coming down the line within a market (two days). That would be VantagePoint. More times than not, it is right.
The second, and equally important, is that I trade more when things are going well for everyone, and I trade less when things are going bad for everyone. Since September of last year, I have been extremely “tight” in my trading. I pick my spots (financials and housing markets, for example), and I “bet” on markets that I suspect will move up or down just enough to give me a profit in a day or two. I choose only markets that are “beat” down, meaning they are markets that more than likely will survive the recession. In and out is the name of my game. Maybe you can tell from my words that I am also a poker player. It is the same in the poker world. When you are “running bad,” take a break. Go on vacation. Take a sabbatical. Stop drinking. Whatever you need to do to break the flow, do it. Gambling, and this is what we all do when playing the markets, is about technically “playing well” true, but it is also about knowing when to “hold ‘em and when to fold ‘em.”
Knowing only what you told me in your email, I can’t formulate any conclusions about you and your trading, and I certainly cannot tell you how to make money at this game, but I can ask this question—is it possible that you are not cut out to be a trader?
Trade in the day; invest in your life …
