This is no ordinary FAQ because the following conversations are real which you can find the original comments under the original post HERE. And unlike the other Getting Start topics, this is perhaps the most import and most commonly known problem, so the comments are allowed and your further comments are very welcome here!
I recently lost my job and now since I got a bit over 100-grand in cash, I'd thought I'll start my daytrading habits *way back in the late 90s* again and oh man, I lost 25% of my asset in a little over a month. So I'm sitting here on my laptop and feeling very depressed and very sad. I just found your web site from googling and researching from other web site. I think you are very cool. I'm hoping to follow your Cobra system to regain back my 25%. 🙁
Hope you have a nice weekend Cobra. If I can get back just 15% by year end, I'll send you a huge gift. That I promise.
- uempel in reply to Tien HuuTien Huu, reading your comment I have an inkling that you are about to lose the remaining 75% too...It's none of my business, but let me explain: your aim should not (not!) be to get back the 25%. The 25% are lost. Don't think back. Your aim must be to improve/get back your trading skills.
And to improve your trading skills you can't copy Cobra. Cobra is Cobra and Tien Huu is Tien Huu. Different character, different personality. Every trader trades differently. You can read Cobra's blog, gain insights, see how he does it, follow his mechanical models. But you can't trade like him. Forget it.
Suggest you read all trading books available and don't touch the market for 3 months. And as soon as you've stopped thinking about those lost 25% - then you can have a second go.
- Ben Chen in reply to uempeluempel your advice and cobra's advice sounds very wise. are there trading books that you can recommend? tia!
- Cobra in reply to Ben ChenHere's his recommendation: http://bbs.cobrasmarketview.com/viewtopic.php?f=3&t=283.
- uempel in reply to Ben ChenI'd like to add two specific trading books: Way of the Turtle by Curtis M. Faith (2007) and Supertrader by Van K. Tharp (2009). There are hundreds of other trading books, but I recently reread these two and they still make sense
- Jason_70 in reply to uempelJust to add to what uempel is stating. There is a very old saying, or may be i started that saying. 🙂
The way you make money in stock market is not by making profits, but by protecting your principal. Profits come automatically when you put in your 100% to protect your principal.
But yes, you cannot get even remotely closer to doing so without what uempel is suggesting. 🙂
Personally, if i were you, i would NOT trade with that kind of money. No matter what my situation is. I know it is easier said than done. But please, thats your hard earned money. Don't give it off for free to the market maker. You have worked hard for that. If i were you, i would simply sit and follow this blog and cobra for a few months. Do REAL time paper trading and may be start with a 2K account and go from there. You should never put real money of that nature unless you know what you are doing with more than at least 80% probability on your side.
Good luck man.
- singularity1024 in reply to Jason_70The old saw was never more true..The surest way to make a million on the markets is to start with two.
- EvilTrader in reply to Tien HuuIt happens bro.Read the Market Wizards books, just google it. You will find some valuable experiences there.
I am losing 2.3% of my total equity now and it hurts a lot...but don´t do the crime if you can´t do time. Trading is very difficult even for the very experienced. Without money management you will go broke sooner or later.
Do yourself a favor : learn a trading system with money management rules and follow it. Here´s one simple but effective :
read it, learn it, dream about it and then, only then, trade it.
- Rip Van Trader in reply to Tien HuuYes, forget about the 25% lost. I recommend that you trade no more than $20-25k in equities at this time, or about $5k in options. If you go with options, trade near the money and with 2-3 months of life left, so that price swings will not drive you mad and so you will not get screwed by options expiration. I suggest holding for swings, not day trading.Cobra's blog and charts are great. I read them every day and they help to keep me cautious. I also highly recommend http://www.thechartpatterntrad.... He has a style of swing trading based on momentum shifts that I like very much.
But, whatever the bloggers say, your trades are your own. For God's sake, don't follow anybody blindly. Read all you can. Bulkowski's patterns are very worthwhile. Learn the fundamentals of Elliot Wave theory, because it is useful for describing market action in terms of possible scenarios. Learn how to read stochastics, RSI, and MACD indicators and how to look for divergences in multiple time frames.
The market is all about the better informed ripping off the less well informed. There are false moves aplenty and becoming a good trader depends on knowing when to hold and when to fold. When these things happen, they are often spontaneous and you are all alone, with your finger on the button. That's why you shouldn't be committing too much capital.
- fuddleduddle in reply to Tien HuuEveryone who has replied to your situation is on the ball with what you should be doing now. Don't set yourself a target of recouping 15% by year end, or thinking about the 25% you have lost. The more you think about it the more you will act out of impulse.
- adamantiaf in reply to Tien HuuHow much of your portfolio are you using to trade? with 100k you should be using no more than 20k in all positions.
- Tien Huu in reply to adamantiafI used all of it. I have to admit, I was more gambling than trading and I traded mostly based on other's web site like Daneric suggestion and when I get panic, I sold too soon and did not wait for it to go back up.
- Ying Liu in reply to Tien HuuThe problem with trading completely based on someone else's "system/blog" is that you don't have complete confidence in it. You will end up easily being scared out of your position on a loss. Who's the person you trust the most? YOURSELF! It's okay to take advice and follow a few trades here and there but eventually you have to come up with your own strategy and game plan. But anyways welcome on board! There are many greater traders on this forum, you will definitely learn a lot.
- Cobra in reply to Tien HuuTien Huu, Uempel said exactly what I'm about to say. I 100% agree with him. I lost far more than you've lost simply because I didn't listen to all those wisdoms from very experienced traders, so I really hope you do take what Uempel said here seriously.Trading is not at all way to rich land, at least not a easy way if not the most difficult way. The very first goal is to survive which means to control your losses. Just forget about what you've lost, concentrate on how to prevent such a loss the next time, instead of thinking how to win the loss back. It's not the way trading should do.