Tuesday, August 7, 2007


Well, after so many times being margined-out I have to stop now and spend some time recollecting the worst of my mistakes and putting down a systematic approach to my efforts.

One major goal is standing in front of the trader (and every man in general) -- it is the goal to be SUSTAINABLY SUCCESSFUL.

Saying that let's see how we can minimise the adverse factors that would hamper this mission:

LEVERAGE - in common language it's called GREED. I can frankly say that this is the single most important problem I have been facing all these years.

I got stopped out because of unreasonably over-leveraged positions so many times that I can't even remember the number. That's funny but what I'm trying to say is that nothing can happen in a week or two!!! At least not to me!

So the way is to trade following a basic set of rules first of which is to trade according to your Account size... this certainly means NOT to put 75% of the EQUITY on a single trade...

The problem is of course PSYCHOLOGICAL - the size of the position makes you feel petrified in the face of the adversely going position. What is worse - even when in profit I start to think it can easily go much more and don't take profits - until I take a loss or square for a meager profit..

So one has to enter the market only with positions that don't affect his analytical potential.


Another thing is other peoples' systems and the information flow.

One has to develop a system or a set ot rules that work for him becasue until one is distracted and acts upon other's signals or systems it will always lead to loss..

Even the best trader gives you signals - they might work just great for him but I for example can't take advantage because I don't have an understanding of the inner workings of the system - so I can't really discern when the system gives stronger signal and when not..

This easily is transferred to mis-managing the position sizes -- one starts to weight different sizes according to his view and that might not be in tune with the original model..

So - find what works for you and start taking advantage of it.
Enough for now.

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