So I like to read. A lot. If I am into a subject then I can't help but go through a lot of books around the subject. I know forex, options and futures trading aren't Bet exchange trading but I think there are a number of similarities and a lot to be learnt from these cousin fields.
The book I'm reading at the moment is called, "The New Market Wizards: Conversations with America's Top Traders", by Jack D. Schwager. So far I'm a couple of chapters in, but I have picked up a few lessons that I'd like to share and get feedback on.
Cutting your losses
In the interview with Randy MacKay, he says, "It's not merely a matter of how much you can afford to risk on a given trade, but you also have to consider how many potential future winners you might miss because of the effect of the larger loss on your mental attitude and trading size"
Advice for other traders
Randy gives some great advice regarding staking after a loss. He says, "...never let a loser get out of hand. You want to be sure you can be wrong 20 or 30 times in a row and still have money left in your account. If I lose on a trade, no matter how strongly I feel, on my next trade I'll risk no more than about 4 percent of my account. If I lose again, I'll drop the size down to about 2%. I'll keep reducing my trading size as long as I'm losing."
He later explains that he takes the recent events (e.g. losing or winning) as another indicator for his trading. He says, "When you are trading well you have a better mental attitude. When you are trading poorly, you start wishing and hoping. Instead of getting into trades you think will work, you end up getting into trades you hope will work."
Makes sense to me.
On trading style
MacKay talks about every successful trader having a trading style that matches his personality. So, even though someone recommends a system that works for them, if you are not a "system" minded person, it would not work for you, as you would not stick to it, etc.
The book I'm reading at the moment is called, "The New Market Wizards: Conversations with America's Top Traders", by Jack D. Schwager. So far I'm a couple of chapters in, but I have picked up a few lessons that I'd like to share and get feedback on.
Cutting your losses
In the interview with Randy MacKay, he says, "It's not merely a matter of how much you can afford to risk on a given trade, but you also have to consider how many potential future winners you might miss because of the effect of the larger loss on your mental attitude and trading size"
Advice for other traders
Randy gives some great advice regarding staking after a loss. He says, "...never let a loser get out of hand. You want to be sure you can be wrong 20 or 30 times in a row and still have money left in your account. If I lose on a trade, no matter how strongly I feel, on my next trade I'll risk no more than about 4 percent of my account. If I lose again, I'll drop the size down to about 2%. I'll keep reducing my trading size as long as I'm losing."
He later explains that he takes the recent events (e.g. losing or winning) as another indicator for his trading. He says, "When you are trading well you have a better mental attitude. When you are trading poorly, you start wishing and hoping. Instead of getting into trades you think will work, you end up getting into trades you hope will work."
Makes sense to me.
On trading style
MacKay talks about every successful trader having a trading style that matches his personality. So, even though someone recommends a system that works for them, if you are not a "system" minded person, it would not work for you, as you would not stick to it, etc.
"How to Stop Losing and Start Profiting"
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