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For all you monkeys that enjoyed last week’s post…its back! I’m going to finish up with numbers five through seven as promised and next week I’m going to share what I’ve learned since my time away from the desk and draw parallels to Marketkronicle’s “professional” trader. I know what you're thinking, this post just keeps going on and on but I’ve got a lot to share on the matter. So read on for part two and see what else I’ve experienced "then" that you can avoid now

AND THE OTHER 3 REASONS ARE…

I’m going to start by picking up where I left off and if you need to be brought up to speed, you can see numbers one through five, here otherwise…

5. Mirror-mirror-on-the-wall… Luckily for me, I’ve always been very objective about myself and realized when I was like an ape-like chest-pounding after a one-off money rocket or blaming anything [like the market] because I lost money. We all succumbed at one time to football stadium inflating egos when we scored big. Other times it was the thick plume of super-pissed-off dead silence [bawss] that echoed throughout the shop. Point is, when you learn about yourself, what it is to be human, and how it affects you then you can start to overcome it and think more professionally.

6. Action Anonymous. I knew some traders that were “action-junkies”, the type who traded anything that moved. That wasn’t the case for me. I had to have a clear signal before pulling the trigger and at times I suffered from information paralysis or inaction due to murky signals and subsequently I missed opportunities. Eventually, I just had to learn to make trades “without all the pieces” but not execute it stupidly, like with no RM. You’re not always going to have all the information for a clear signal but that’s where the experience comes in. Get it cheaply!

marketkronicle infograph


7. Underfunded. Yep, that was us! Everybody had to be out by EoD. Sure, it’s day trading but if your right on an extended move you’re missing the real money. Since the bawss had the most experience, he was the only one who could hold overnight but if someone traded on accident the next day, guess who got a margin call? Yeah, it happened once.

Also, if you don’t have about $50K to start, expect to fail…about all of the time. Why, because this relatively tested amount is to be able to sustain consecutive losses [~30] during your learning curve and position size correctly [~2%] until you gain enough expereince to come out the other side with enough capital in tact to still trade properly.

And leverage is HUGE, it will kill your capital faster than drinking cyanide in a desert! Our shop had 4X and let me tell you how that worked...

  • I typically traded 1 round lot and let’s say it moved positively 20 ticks [~$20], and then some unexpected bad news comes out and it goes against me 45 ticks. Now my current P&L is only -$25.00 but my capital is now -$100.00 because the leverage magnified my losses by a factor of four when the trade went against me.

As a noob I made a lot of mistakes, do you see the problem?


C'MON...PART 3?

Next week I promise to wrap this all up and I’ll be commenting on the professionals and my transition to their thinking. I know, I know, I said that last week but I actually already have it done and unless you want to read over a 900 word blog then there's going to have to be a part three. Sorry, monkeys I didn't intend it this way

...but if you enjoyed it, tune in once more!

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Comments (3)

  • lasampdoria's picture

    Ffff. Still a noob

    "Those who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."- Benjamin Franklin

  • Arti's picture

    I call BS on the 50k account part.

    You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

  • In reply to Arti
    GMngmt's picture

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