TraderGav.com

Gav's trading blog - Perseverance, Consistency, Confidence

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A note to my friends

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I have a group of friends who recently lost some money in stocks markets. (Ok, let’s blame the market, if it makes you feel better.) To my surprise, they are rushing into currency trading now, and heck, live accounts. I can see the fire on their head. “I am going to make a killing in Forex market”.

They are my friends. So, I don’t wanna be the one to discourage them. (You know, I am such a kind man. :o: ) If, by chance, they read my blog, I hope this post shows them some light.

My question to them, or you , if you are in the similar situation. What makes you think that you lost money in stocks market but you are able to earn from currency trading?

Which is the root cause of the loss? The market? or the trader?

Think. Keep the answer to yourself, not me. Simply because….I don’t care.

Random thought while shopping at Vic market

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While shopping for some fresh fish and vegetables in Victoria market this morning, some random thought came into my head.

Why do you fear when holding a position overnight? Because you are not confident or not sure about your setup and strategy. Next, because you are not risking the amount that you are comfortable with. The stop of the trade is too wide for you, and your position size is too big for your small stomach. And, you are simply not prepared to accept any loss from trading.

In fact, it is so simple. Risk the amount that you are comfortable with. And watching the position to develop. Why fear?

Today’s coffee thought

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Maybe I had been staying in Singapore for too long, I tend to work or live by rules. Here is something for you to think about.

When crossing a road with moderate traffic, would you rather press the ‘cross’ button of traffic light and wait for the green light before crossing? or you will take your own steps as long as you feel it is safe without even looking at the traffic light?

I often see people ran across the road just to save his 0.1 minute, and people like me, dumb enough to just wait for the green signal before crossing.

Try to link this to your trading. What would you do? why?

Food for thought , from Gavin.

Today’s coffee thoughts

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Something for you to think about.
You own a cafe, you manage to get some nice coffee beans at pretty low price, and selling a cup of coffee with normal market price. But, your cafe is located at some odd location. And you only have a couple of office workers patronize during working days, and absolutely quiet during weekend.

So your profit margin is high, but sales figure is low. Is this a good business to continue running? What would you do now?

Think about this in term of your trading. How does it relate to your trading? uhm….

Food for thought from Gav.

Year end review?

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This is the last trading week for the year 2007. It is unlikely for me to trade since I am rushing to finish some work and preparing to head to Sydney this coming weekend for my Christmas break.

Well, if you do not achieve your trading target or your trading ‘dreams’ for 2007, it is too late to make it happens now. Yes, I know miracle does happen, you might hit a jackpot for the coming 4 trading days, but…after all, it is still a miracle. We meet miracles by chance, we don’t plan to have a miracle. Got it?

Instead of struggling to hit your 2007 target at this stage, maybe we should do a review of our real trading problems.

Answer the questions below, carefully and frankly. You will realize some of your mistakes and make a note for the coming year.

  • How much time have you spent on searching for the secret trading strategies in forums or blogs?
  • How much time have you spent on studying markets, developing your own trading strategies and style?
  • How much time have you spent on trading forums (e.g Elitetrader, forexfactory etc) or chart room such as wallstreak (sorry ,ugly) to listen to other people’s opinion (most of time ,nonsense)?
  • How much time have you spent for yourself, thinking deeply, which trading instrument/style/timeframe/market etc that really suits yourself?
  • How many times have you been changing your trading strategies? From dummy to fibonacci, then to breakout or even scalping?
  • How long was the last time you stick to your trading plan?
  • How many times have you been delaying writing or recording your trading journal?
  • Are you spending way too much time in something called ‘trading psychology’ things? It is important, but are you spending WAY too much time on it?

There are still a lot of questions for you to answer, but I guess these should have shown you something. Please be frank to yourself.

The most valuable thing I have learned from the past couple of years is, trading is really a lonely and individualist business.

You have to work out by yourself to figure out what’s working for you and what’s not. Sorry to say that you have to design your own strategies and plan.

Chat rooms and forums are really for entertainment. Purely entertainment. There is nothing called discussion in trading, most of the time, there are just bullshit sharing. It is good to visit forums and chat rooms, for the sake of laughing. :-). The best place to learn about trading and the market is the market itself. These are my opinion and experience. Take it or leave it.

One of my favorite posts in blogsphere is ‘Chasing Success’ written by Trader-x. It is a good read and good reminder. Make sure you check it out.

most people jump from indicator to indicator, time frame to time frame, method to method. They will use something for a few days, hit a bump, and move on to something different altogether. One day the holy grail is a XX period moving average, the next day it is MACD or an oscillator. One day it is a 30-minute chart, the next day it is a 5-minute chart. One day it is buying the break of the first inside bar, the next day it is a pullback from the high.

I call this “chasing success”. The bottom line is the person does not spend enough time on any one method to really understand and execute it properly. They bounce around, and before they know it a lot of time has passed and they are still struggling.

If you pick something and stick to it, you get good at it. Once you get good at it – once you perfect it, THEN you can add something else to your arsenal.