|
Sydney
Experience: Beginner
Platform: E signal
Broker: AMP, Stage 5
Trading: AP -SFE; FESX; ES; 6A, 6N,6E,6B,6C,6J
Posts: 42 since Jul 2010
Thanks Given: 20
Thanks Received: 31
|
Hi,
This post is how a fight with my girlfriend, led to some amazing revelations concerning my trading:
Please read and learn from my mistakes !
Hi,
This journal entry is a little different than some technical manifesto of how to scalp.... You see, I had a bad
argument with my girlfriend about bringing my son around ( ya know, wicked step mum scenario), and I realized something profound about my trading.....Now go out on a limb here please. It's gonna sound strange,
but I had a few wines ( as ya do after such an argument)....I was looking at my Aussie stock index in my 'seeing
red' mood, and PRESTO - I realized IT. I know that sounds silly, but let me humor you. I've been trading for over 10 years - and I've tried trading every, and I mean everything. Needless to say, I've lost my fair share of money over the years. The GFC,.....even the recent August melt-down got me good.
One account was down so much, I had about $372 left after I dabbled in oil....really hit my account hard from about 3 K. Anyway, to cut a long story short - I traded that small account back up to 3 K in about 4 weeks. Don't believe me?
I will send you the brokerage statements ! I decided, Oil is not for me.....I will trade something I really am familiar with,
and that is the AUSSIE stock market index. It is the main thing I've followed for years for my stock-trading. I even developed a computerized system using metastock, which I traded making a fairly good profit, in 3 months I made about 40 %, I even talked some friends into investing their money too. Then I was looking at the AUSSIE index one day a few months back before the mini - crash that hit, I'm sure you ALL remember those few days ! I had this sinking feeling in GUT, and I knew something was wrong ! I called my friends, I told them, take back your 5 K plus profit, and run ! The markets gonna crash. They listend to me, and a few days later, WHAM, it did. Go hte GUT !
I, however, was long some oil stock, and even long OIL, and I got hit bad.
Lesson 1.......only trade what you know or are familiar with !
So, being a relatively sensitive chap, I decided to follow my own lesson .....NO REALLY !
So, I did just that...... my WONDERFUL stock market computerized system, which gave me so much CONFIDENCE just because it was computerised ( OOOOOHHHHH)......was actually flawed. WHY you ask ?
Lesson 2......ALL STOCKS are not immune to the movements of the main market index !
Not exactly rocket science, you say, but it really hit me hard. I put the stock index alongside my stocks I was trading and BAM....it was clear as daylight. There WAS correlation ! Don't be stupid man, we all know that right?
Well do we? I certainly didn't really GET IT, until that moment.
So.....what did I do? I decided to STOP trading individual stocks....why trade them when the main market index is what moved them anyway right? The big stocks anyway.....
lesson 3....Trade what you are really trading.......I was actually trading the stock index, thinking I was trading the individual stocks. So why not just trade the underlying INDEX....so I decided, THAT IS WHAT I WILL TRADE>
I WILL SPECIALIZE !!!
NOW after arguing with my girlfriend, and AFTER trading that small account of 372 back up to 3000 in 4 weeks but JUST FOCUSING ON WHAT I KNOW.....via mostly large scalps or small swings on the Aussie market or SPI futures...
I thought about what was important to me in relation to my son, and my girlfriend....this will require lateral thinking but stay with me.......I was mad at my GF because she wanted a night alone from children ( her own son was at her Ex's) and my son was with me tonight. But I was forced to take him to the movies ( despite not being happy with that etc )......when I came home, we had a fight over it.....and I decided to then ( seeing red) sit down at my computer and look at my charts. I missed trading that day due to work, and I thought I missed making about 20 points scalping. THEN I saw something incredible ! I watched how I'd bought contracts near the LOWS OF A MULTI-DAY MOVE ! I SAW THAT I SOLD OUT FOR A MERE 10 POINTS ! THEN i SAW THE MARKET MOVE UP OVER 2-3 DAYS ABOUT 300 POINTS ! I HAD SETTLED FOR 10 POINTS, AND MISSED THE MEAT IN THE SANDWICH OF THE MOVE,
I COULD HAVE EASILY TAKEN 200 POINTS OUT OF THAT MOVE ! BUT I SETTLED FOR 10 POINTS ....do you know the feeling that is similar too? I'll tell you, its like comparing the love for your child ( 200 points) to the little moments of pleasre you get from your girlfriend ( 10 points * x)......no contest really. THAT'S WHY I GOT IT. this lesson. Of course if you're not a parent, you might stick with scalping ( ha ha)...
lesson 4......GO FOR the real love......GO FOR THE BIGGER POINTS IN A MOVE !!! IF I am a fairly good scalper and can pick bottoms pretty well in a swing move, why not just hold on for a much bigger profit......???
Do you have any similar stories? 
|
