Advice from experienced traders in these market conditions

gordon2007 · 1 August 2007

I've only been trading now for about 5-6 months. My portfolio is rather small at the moment. I'd classify myself as more of a trader than an investor. I tend to hold short term and sell on the highs. Small profits but quick profits. Not trying show off or anything but I've only had one loser so far so I feel I'm doing alright.

Currently I'm either even or only slight up on my shares that I own. Just wondering what the experienced traders do. 1.Buy up more? 2.Just be patient and wait this out? 2Sell everything and wait for things to settle?
4. Take all my profits, consider it a fun 6 months, and run?

Currently I'm considering options 1 and 2 but haven't made up my mind on any of them yet. I'm thinking more 1 or 2 because ultimately I want to be a long term market player so I want the experience.

I've probably answered my own questions but just wanting to hear what others have to say.

chops_a_must · 1 August 2007

As Kent Brockman and the Professor say,

Kent: Professor, without knowing precisely
what the danger is, would you say it's time for our viewers
to crack each other's heads open and feast on the goo inside?

Professor: Mmm, yes I would, Kent.

Morgan · 1 August 2007

A good rule is: "Don't lose money"

and: "Don't play with money you cannot afford to lose"

Setting an automatic stop loss is one way in these conditions to avoid letting your emotions getting in the way. The market does not care how much you "hope" your losing stocks "might go back up".
After all, it only takes $30 to buy a stock back but you can't sell it for what the price may have been yesterday or the day before.

Be careful not to try and catch a "falling knife".
If you feel compelled to buy "cheap" stocks, one strategy is to set a buy gain higher than the current price. That way you will get your stock if the price starts going back up again, and reduces the chance of being caught with a stock that just keeps falling.

All my own opinion and style of course. 18 years in the market and still learning every day

Spaghetti · 1 August 2007

gordon2007 said:
I've only been trading now for about 5-6 months. My portfolio is rather small at the moment. I'd classify myself as more of a trader than an investor. I tend to hold short term and sell on the highs. Small profits but quick profits. Not trying show off or anything but I've only had one loser so far so I feel I'm doing alright.

Currently I'm either even or only slight up on my shares that I own. Just wondering what the experienced traders do. 1.Buy up more? 2.Just be patient and wait this out? 2Sell everything and wait for things to settle?
4. Take all my profits, consider it a fun 6 months, and run?

Currently I'm considering options 1 and 2 but haven't made up my mind on any of them yet. I'm thinking more 1 or 2 because ultimately I want to be a long term market player so I want the experience.

I've probably answered my own questions but just wanting to hear what others have to say.

Currently up or even? Can you please give me advice please

MS+Tradesim · 1 August 2007

Gordon,

A couple of things for you to think about:

1) What are your objectives? This will help you work out what your current strategy might be.

2) If you have only been trading 5-6 mths then you wouldn't have previous experience in what we're going through right now. If it were me and I had my time over, I would close my positions as soon as they turned south and paper trade through the period to get a better feel for what's happening at the moment.

3) Win rate (or how many times you are right) means very little. A high win rate may be an indication you are cutting profits short and letting losses run. Review your trades and look for patterns. Are you holding "losers" hoping that they will come back?

In my early trading days I had a very high win rate and made buckets of money. I gave it all back as soon as the market turned by refusing to cut losses. That was the most expensive and best education I received. That was what caused me to start reading to find out what good traders do.

gordon2007 · 1 August 2007

MS+Tradesim said:
Gordon,

In my early trading days I had a very high win rate and made buckets of money. I gave it all back as soon as the market turned by refusing to cut losses. That was the most expensive and best education I received. That was what caused me to start reading to find out what good traders do.

Yes I would say I'm definitely taking profits out too early. And yes I also agree that's why my "win" rate is good at the moment. I'm under no illusions that I'm some experienced guru or anything remotely close. If anything, I sell too early and haven't realised significant gains. But I also think that because I sell early I'm also stopping myself from having huge losses too.

Haven't even thought about paper trading. Good idea.

As for holding losers, I won't do that. It hurt to sell my loser, and a few I was very close to selling at a loss but luckily they came back to break even point.

For the time being I'm content to sit here, ask my few questions, read and learn.

mime · 1 August 2007

gordon2007 said:
I've only been trading now for about 5-6 months. My portfolio is rather small at the moment. I'd classify myself as more of a trader than an investor. I tend to hold short term and sell on the highs. Small profits but quick profits. Not trying show off or anything but I've only had one loser so far so I feel I'm doing alright.

Currently I'm either even or only slight up on my shares that I own. Just wondering what the experienced traders do. 1.Buy up more? 2.Just be patient and wait this out? 2Sell everything and wait for things to settle?
4. Take all my profits, consider it a fun 6 months, and run?

Currently I'm considering options 1 and 2 but haven't made up my mind on any of them yet. I'm thinking more 1 or 2 because ultimately I want to be a long term market player so I want the experience.

I've probably answered my own questions but just wanting to hear what others have to say.

I have a similar trading technique to you. I now only have one long team stock left. I think now with such volatility short term trading is the best option.

stevo · 2 August 2007

Gordon,
It's difficult for me to give simple advice, like keep buying, or sell everything

From The New Market Wizards by Jack Schwager - Gil Blake interview;
What advice would you give to a novice trader

There are five basic steps to becoming a successful trader.
First, focus on trading vehicles, strategies, and time horizons that suit your personality.
Second, identify nonrandom price behavior, while recognizing that markets are random most of the time.
Third, absolutely convince yourself that what you have found is statistically valid.
Fourth, set up trading rules.
Fifth, follow the rules.

For me good trading is about following my rules, not whether I win or lose on a single trade. I don't trade a strategy unless I "know" it works.

stevo

Master Po: Do you hear the grasshopper that is at your feet?
Young Caine: [looking down and seeing the insect] Old man, how is it that you hear these things?
Master Po: Young man, how is it that you do not?

numbercruncher · 2 August 2007

Just remember the markets can remain Irrational longer than you can remain solvent

gordon2007 · 2 August 2007

I reckon it's just a matter of reading, educating myself, listening to others and watching them and watching how the market reacts to gain the experience. And being prepared to take some lumps and mistakes along the way.

rub92me · 2 August 2007

mime said:
I have a similar trading technique to you. I now only have one long team stock left. I think now with such volatility short term trading is the best option.

Unless you really know what you're doing, the best thing to do right now is to stand at the sidelines and watch the spectacle. Short term trading in a volatile market is very risky. If you get it wrong you lose your shorts and shirt.

Happy · 2 August 2007

For novice trader as for novice driver, or novice sailor easy conditions are better to survive.

Volatile markets are more difficult, like very busy road or stormy weather.

Pommiegranite · 2 August 2007

Why bother risking capital now? There will always be opportunites, whether it be next month or next year.

The demand for resources is not going to end right now.

nioka · 2 August 2007

numbercruncher said:
Just remember the markets can remain Irrational longer than you can remain solvent

You only become insolvent if you are working with borrowed money and are forced to sell. If you are investing your own funds it becomes time in the market and it doesn't matter what the price is day by day. It only counts when you NEED to sell.

Advice from experienced traders in these market conditions

gordon2007

chops_a_must

Printing My Own Money

Morgan

Spaghetti

MS+Tradesim

gordon2007

mime

stevo

numbercruncher

Beware of Dropbears

gordon2007

rub92me

Don't look back

Happy

Pommiegranite

nioka

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