I am still managing a couple of open positions, and unlikely to open any new position next week. So, it is almost time to call it a year. And what a year! This post is not meant to be another “how many thousands of pips I’ve made in 2009′. Who cares?
I am thinking of writing up a summary of the trading lessons I’ve learned from experience, books, or interactions with other traders over the year. You might agree or disagree, again…that’s not my problem. Most of these are quotes from books or articles which I’ve collected. By no means, I am claiming my own.
Trading Lessons Learned
- You have to be able to lose in order to win.
- Always be realistic with your monthly target.
- It is absolutely OK, and most of the time, helpful to shut down all social networking such as Twitter, StockTwits, Facebook. Think about it, if your friend is affecting your work, tell him to come back later. Trading is about concentration, and definitely a personal and lonely business. To be a successful trader, we must walk alone in our days and do it alone.
- If you are really seriously addicted to twitter, try to challenge tweets who call trade, instead of following them. Always assume these people on twitter(including me) are wrong. The key is to NEVER FOLLOW A CALL on twitter.
- When your position is right, you have to do nothing instead of doing nothing when you are wrong! [constantly taking early profit will do you more harm than good]
- You must keep your losses small and take more small losses than small winners to come out ahead. You will become the best trader you can be by being wrong small, not right small.
- It is your job to know you are wrong and not the market’s job.
- You have to press your winners if you really consider yourself to have the ability to make a living or extra income from trading.
- When you place a trade, don’t ever think this is the only trade to make. There are thousands of trades you can make. You aren’t going to miss a move for long if you trade correctly. You aren’t going to chase markets if you trade correctly. You must have a plan to enter positions based on each market’s criteria.
- When a market doesn’t go up anymore, somewhere it isn’t correct to stay in the position, regardless of the expectations.
- Your trading career should be a long-term expectation on your part. You must look beyond one day in your trading career.
- We should concentrate on protecting what we have rather than what we expect to make first.
- If you want to win, you’ve got to know the rules; and also, you can’t win if you are not at the table.
- Gambling is taking a risk when the odds are against you; Speculating is taking a risk when the odds are in your favor.
- In order of importance: Preservation of capital. Consistent profitability. and the pursuit of superior returns.
- It is always better off to learn from observed mistakes.
- Traders have a choice: Either face the truth of trading or look for the nearest exit.
- The best loser is the long term winner.
The list can go on to hundreds..I am just quoting the lines I found to be helpful to me over the past year.
On a personal note, the most significant event I have observed this year is my active involvement in Twitter. There are times, reading tweets is a pure disturbance. And there are times, gems are found while interacting with some traders. So I’ve learned to shut down twitter at a certain time when I am trading or making a decision.
2009 has been an eventful year to me, on both personal life and trading. 2010 is definitely not going to be a dull year, and I am looking forward to another exciting and challenging year.
Here is to a great 2010.