5 replies to this topic

[Rogerdodger]

So the corollary follows...there are bold traders and there are old traders but there are no old-bold traders!!!

How many books and stories have been written about traders (or more often speculators) losing everything after years of tremendously successful trading?

Here's some good reading. Agree or disagree:

Wisdom of Jesse Livermore:

"When I am bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don't buy long stock on a scale down, I buy on a scale up."
Taking the big plunge however, throwing out a whole line at once rather than gradually scaling in, is extremely risky and not very prudent. First, the psychology of speculation gets in the way. If conditions look so ideal that a speculator is willing to consider betting everything at once, then emotions will be running high. There is nothing like greed and fear to cloud our minds as we ponder the markets and trading. By trading all at once, the very real risk exists that the decision will be much more emotional than rational. Emotional decisions often lead to big losses.

However, there are old bald traders!

Edited by Rogerdodger, 13 April 2007 - 10:27 AM.

[PorkLoin]

God help me...

I post

"All in" on energy

in the "Old Friends" thread below and six seconds later go back to the main FF post menu and see this one....YIKES.

Doug (partially old and partially bald)

Edited by PorkLoin, 13 April 2007 - 10:49 AM.

[selecto]

No foolin' old Jessie - Da tren is yo fren. I recall, however, that he did do some "plunging."

[Rogerdodger]

in the "Old Friends" thread below and six seconds later go back to the main FF post menu and see this one....YIKES.

Doug (partially old and partially bald)

It's OK.
You're not alone.
Just don't jump.

[jjc]

I think it is important to press your edge; Keep your potential losses bounded, however when you edge indicates you take a large bet, you need to take it. Some can do this without a quant crutch. I can not. 43ish, feeling old, but by no means an old nor a bold trader. (coming on 2yrs trading).

[PorkLoin]

JJC: I think it is important to press your edge; Keep your potential losses bounded, however when your edge indicates you take a large bet, you need to take it.

Some can do this without a quant crutch. I can not.

43ish, feeling old, but by no means an old nor a bold trader. (coming on 2yrs trading).

Very well said, JJC. Keep your losses bounded. I'm 48, have traded for 25 years but still need to really learn that to the extent that I just plain do it.



Every time I look at this chart I'm tortured by the fact that I held through a 59% price decline at the pinkish-purple arrow. Time later bailed me out but it's still just unacceptable to do that, and better to exit then get back in when technical indicators say to do so.

Heck, if I didn't balk at giving up 59% of the share price, would I ever have sold? Some of us never learn.

I fully agree on pressing your edge. I vote for "selective plunging," and of course the risks increase as well as the potential rewards. Almost surely get more glory and pain that way. That's what I see in the chart, some glory, especially this week, and some pain too. I'm going to try to avoid that much pain in the future.


Best,

Doug