tag:blogger.com,1999:blog-30128229.post607001456331053878..comments2023-09-30T07:11:55.493-06:00Comments on MarketFN.com: A Trader's ConsiderationsInvestment Househttp://www.blogger.com/profile/14771320644915759241noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-30128229.post-24906720212597321682010-04-27T12:45:25.675-06:002010-04-27T12:45:25.675-06:00Michael, you're welcome. Good days and bad day...Michael, you're welcome. Good days and bad days are to be expected, and we want to make sure that we avoid having our emotions on either day control our trading. The emotions are normal and all we need to do is be aware of them and know they are normal and in the meantime stick to the discipline of our plan. Here's to good trading!<br />Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-12906212681185792342010-04-27T12:08:00.732-06:002010-04-27T12:08:00.732-06:00Again. I really appreciate you taking the time to ...Again. I really appreciate you taking the time to write. I will be buying your book. As with any endeavour in life there is risk. There are some days when I make a good trade that I feel like I can make this my full time profession. On the flip side I have bad days and don't have any confidence. The last thing I want is to be a satistic of how many day traders fail. I know that the failure rate is high. Thanks again.Michaelnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-26706262814398451972010-04-22T08:07:46.441-06:002010-04-22T08:07:46.441-06:00Thank you for writing, Anonymous.
Clearly you se...Thank you for writing, Anonymous. <br /><br />Clearly you seem to be facing a very serious decision. I'm not sure, though that you only have two alternatives. Instead of quitting your day job on January 1, 2011 and becoming a full time trader, why not consider continuing to work as you enter trades where you are actually putting money at risk? While you are absolutely correct that paper trading does not incorporate the emotions involved when actual cash is on the line, it can be very helpful in understanding the intricacies of various strategies. Let me say, it sounds as though you may not quite be utilizing the paper trading exercise properly. Instead of going "all in" with the paper trades, I would suggest you use a money management system just as you would if real money were on the line. Going all in with the paper trades is much different that real money trading where you would be very unlikely, perhaps even foolhardy, to go all in. The idea of paper trading is to replicate as much as possible what you will be doing when you trade real money. That means, among other things, that you have an entry strategy, an exit strategy, a potential reward to risk requirement, and a money management plan. If you are not incorporating these things in your paper trading, you are missing important pieces of the puzzle.<br /><br />Your comment about playing poker is troubling. Most good traders don't look at trading as gambling and those who do try to make themselves the house rather than the gambler. As one great instructor once told me, successful traders trade on the edge of boredom so if it is excitement you are looking for, you might consider something else to release that need.<br /><br /> I gather you must still be relatively young with a baby on the way. Remember there is no rush. You have plenty of time. I didn't start full time trading until well into my 50's. I urge you to exercise patience in increasing your knowledge.<br /><br /> Finally, while almost anyone could learn to trade, you are right that trading is not for everyone. Good traders are patient, knowledgeable, risk aware, and often risk averse. While they feel the emotions, they do not let the emotion control the trade; rather, they trade with discipline. If you believe you could be a great trader, I suggest you analyze the elements in you that lead you to that belief. Is the belief based on known abilities to be self-disciplined, patient, questing for knowledge, or is it some ephemeral feeling. I suggest some deep introspection to make sure you are willing and able to do the work and undertake the discipline before you quit the day job. Trading is seductive because we can see the great potential, but in so doing we also need to be sure that we understand it is work and it can involve great risk. Clearly, you are approaching this issue seriously and I commend you for that. Ultimately only you and your family can decide whether (and when) it is for you to do full time, part time, or not at all.<br /><br />Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-41892865641241266222010-04-22T07:05:30.636-06:002010-04-22T07:05:30.636-06:00I really appricate your comments. You have given m...I really appricate your comments. You have given me a lot to think about. I have considered all the factors and risks with trading. I have traded small amounts of money for the past year now. I find it very hard to paper trade because there is no emotion. It's kind of like playing poker with no money at risk. You have a tendency of going all in all the time because you have nothing at stake. My biggest problem is creating a plan. I really want to gain more knowledge before I quit my job and do this full time, but sometimes reading all this info can be overwhelming. My target day to start trading is January 1, 2011. That gives me a goal. It scares me to death that I am making a bad decision to trade. I have a wife thats pregnant with our first child. Your last email post bothered me about indecision and vacillation. It might be no matter how much education I get I might not have the traits to be a good day trader. I have losts and gains with real money with tradeing this past year. I have my good days and bad days. I just don't know when I should take it as a sign that trading is not for me, even though I feel deep down that I could be a great trader. Thanks for letting me ramble on. I appricate your honesty. Thanks again.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-1827029413798850442010-04-14T11:06:29.583-06:002010-04-14T11:06:29.583-06:00Thanks for writing, Anonymous. Since I am without...Thanks for writing, Anonymous. Since I am without information concerning your training, knowledge, experience, capital, amount of risk money, etc., there is no way I can answer your questions except in the most general terms and the answers must not be construed to be investment advice since they are not offered as that. In general, I have found that most people who are entering the trading business are under-funded just as are most people opening any new business. Another issue that frequently arises is that expectancies are unrealistic. In your case, you suggest making $2,000 a month on $5,000 in a margin account. In other words, you believe you can regularly make 20% per month with no losing months or at least no reduction in principal at any time. While there may be months when some traders may make 20% or more, my experience suggests that it is extremely rare that a novice trader could do that with any consistency or regularity. Risk must be taken into account and no matter how good a trader may be he will sometimes suffer losses. Since you asked the questions about how realistic your "plan" may be, it seems that you have not done any practice. Paper trading, virtual trading, or practice trading are essentially the same thing and can help a trader see just how well he actually does without risking real money. Even when one does well paper trading, one must understand that trading real money is much different from practice trading because emotions become significantly more involved and can lead to less success or worse losses than were experienced with the paper trades. One serious issue that often arises with people who are excited as they begin trading is that they put the cart before the horse. They trade first and then educate themselves. That can be a costly approach because we pay for our education one way or the other and piling up losses can be a faster more expensive route than paying for books, DVDs or hands on training. May I suggest you first work on gaining trading knowledge, then create a plan, then paper trade the plan to see how you do and only after you have proven to yourself that you can be and are being successful with your paper trading might you begin making trades utilizing a money management element in your plan together with strategies to cut losses and to let profits run. In my estimation a good plan contains a number of additional elements as I have often written and as discussed in my first book, "Trade Your Way to Wealth," but should certainly incorporate those critically important elements as well. I'm guessing this is not the answer you wanted, but my advice is to prepare well first, and that includes study and practice, before putting the first dime at risk. You wouldn't risk your life with a surgeon who had no training so why risk your money without first getting the knowledge? I know it takes patience not to jump right in, but as I have also frequently written, patience is a critical element in successful trading.<br />Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-38803019794136156322010-04-14T09:13:37.874-06:002010-04-14T09:13:37.874-06:00I am new to trading. I want to start trading full ...I am new to trading. I want to start trading full time. I understand that I will need $25,000 to day trade in a margin account. But how much will I actually need to start will to trade. I know this depends on what you want to make for an income, but please give me some thought on what I will have to start with. My plan right now was to try and make $2000 a month with trading after commisions. I was going to try and do that with $5000 in a margin account. Is that crazy? Any insights would be appricated. Thanks again.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30128229.post-52205931534040186252010-04-13T15:34:06.138-06:002010-04-13T15:34:06.138-06:00Thanks for writing, Anonymous. Actually I have giv...Thanks for writing, Anonymous. Actually I have given sample plans in previous articles. My book, "Trade Your Way to Wealth" also reviews the creation and elements of a plan.<br />Bill KraftBill Kraft, MarketFN.comhttps://www.blogger.com/profile/08274803638438137352noreply@blogger.comtag:blogger.com,1999:blog-30128229.post-67111255905268554752010-04-13T13:48:44.771-06:002010-04-13T13:48:44.771-06:00I still don't understand what a plan is. Can&...I still don't understand what a plan is. Can't Bill at least give sample plans?Anonymousnoreply@blogger.com