Great trading advice from Jeffrey Kennedy of Elliot Wave International (brought to my attention by my friend AG. Thanks!). Link here. For me personally, it is #4 that I need to work on.
T4L beginners should take special note of #3 Unrealistic Expectations. Looking back now, I wished that someone on the road before me had told me that "the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year". Unfortunately, I started out unrealistically, trying to make my [bank salary+bonus+a lot more to make the switch worthwhile] in T4LY1 and blew myself up on the way. My life now would have been so much easier if I hadn't lost a very substantial chunk of my risk capital in 2006. To be completely honest, I was within a hair's breath of giving up T4L and going back to working for others (=my nightmare scenario).
[Subprime trending markets, especially in USD/JPY came to my rescue - see sell signals labelled (1) and (2) on chart on LHS). For this, I shall be eternally grateful].
So - would be T4L beginners - take heed and good luck.
Addendum 05Jul09 6:03 pm : Completely taken aback by a fierce, no, venomous, reaction from someone whom I had sent a link of this post to. This is someone who I had exchanged many emails with regarding trading before. I had gone out of my way to try and help this person see that there are other styles of trading that could be worthwhile exploring. Unfortunately, it seems that all my previous actions are now perceived as .. insulting and meddling? (But yet the exchanges went on for a period of months.) Does anyone else reading the above post think that what I am trying to tell them is that they should not expect to make any money trading and that I am insulting their trading/style? I, for one, was certainly most appreciative of the article and my friend AG for forwarding it to me.
02 July 2009
5 Fatal Flaws of Trading
Am deeply disturbed by this incident and how, with the passage of time, I am now perceived to have done harm when my intent was purely to help. Going forward, I can only resolve to follow JL's words closely "I do not volunteer advice and I never give tips." How sad ... but by and large, the blogosphere has been wonderful and I shall not let this one bad experience ruin it for me. We move on.
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15 comments:
Yeah I have the same problem with #4.
Hey Tio,
Is it right that your equity graph begins from Jan '07?
What would it look like if it began from the day you started T4L in '06?
As you rightly point out, #3 unrealistic expectations is a major mistake most beginners make. I too have fallen for that.
Keep up the great trading and writing.
Pandu
I have started plotting the equity graph from Jan07 because that is when I started to trade with the methodology stated here. Prior to that, I was flying blind, going by gut feel, trading on a whim, without discipline, no risk controls, etc.
thought you might find this interesting:
http://search.japantimes.co.jp/cgi-bin/fd20090628pb.html
I feel the path you describe is quite familiar to most. I’m a slow learner and in the early days, I went through the type of uncomfortable experience you describe a few times. Here is a good book(one you may already be familiar with) that covers some very interesting topics along the lines you describe in your post.
http://www.amazon.com/Trading-Risk-Enhanced-Profitability-through/dp/0471650919/ref=sr_1_1?ie=UTF8&s=books&qid=1246742585&sr=8-1
-Aman
No I have not read that book. Thanks for the recommendation. Much appreciated.
If Jefferey Kennedy told you that no matter the effort and time you put in the first year you would fail and lose a load of money would you have put the same time and effort in your trading. All the traders I've come across who trade for a living suffered heavy loses at the begining of there career and considered it tuition.
He did NOT say that no matter how much time and effort you put in in your first year you will still lose a lot of money. He said that you should have realistic expectations and aim NOT to lose money in your first year. This is what I failed to do because I was shooting for the moon in T4LY1.
Hey TS,
-- in response to your addendum --
Your post is very valuable to anyone sincerely wanting to learn and improve their game in T4L. Its not insulting, meddling or anything of that sort. Keep up the great blog, let this one go. As you say, it is not representative of the blogosphere.
Pandu
Pandu - Thanks for the encouragement. It means a lot to me. Just felt really disappointed (and hurt) to have elicited such an unexpectedly vicious response from people who I thought I was trying to help, so that they do not have to re-invent the wheel and make mistakes I have made before. No matter, as long as there is even just one person like you who appreciate my posts I shall persevere.
TS,
What u did was a good thing, dun let one such vicious person affect you.
Keep up the great blog :)
Yes, keep up this great blog. This is by far one of the best trading/markets blog out there with your trading insights, links to important articles and also financial data! Don't let that loser bother you. He was probably losing money and took out his frustration on you....
Thanks guys. Done and dusted. Moved on.
Wow, only just saw the addendum...
TS,
Just to echo the people above, I regard your trading blog very highly and appreciate your sharing of your valuable experience.
My methods and timeframes are probably rather different from what you are using, but I enjoy and indeed sometimes rely on coming to your site for the longer-term perspective.
Do continue to share your experience; it is most certainly appreciated.
Don
Thanks for the post, and I am sorry that some others (for whatever reason) took objection -- it is quite hard for me to understand why.
Trading is very personal, and we are always struggling to not let our demons (greed, fear, etc) get the better of us.
I appreciate the openness with which you discuss your trading. There is much to learn (and relearn here).
That being said, there are many different paths to success in trading and each must find what suits them.
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