Friday, January 05, 2007

The ego and trader forums


I notice many people on Trading forums try to make market calls in real time only to be wrong, and they end up taking big losses. I did it in the past. I've made a ton of mistakes as a trader and I realize that it was because I didn't having a strategy and that I let emotions take over during the worst of times.

Posting realtime trades on a message board, you feel married to the position because your "ego" is on the line and you want others to see that you were right all along and you end up lowering your stop and taking a bigger loss then you would have if you didn't feel the extra pressure.

I stopped all chat rooms and forums while trading realtime. It's hard enough trading. I don't need to be making market calls and typing on a chat or forum to prove to others that I can trade, and I don't have time to be reading what others are typing during the first hour of trading when I'm watching for my setup to occur. What is the purpose of chat rooms then? So you can teach/learn from others?????
I don't think I've learned anything from others. Everything I've learned has been through trial and error. An expensive education, but you remember what you learned and have more confidence in your trades when you find your strategy.(if you find your strategy)

My strategy on scalping stocks is watching a whole sub sector of oil stocks with high correlation and looking for stop running away from the sectors trend and trading that stocks divergence back into the sectors true direction, and also watch QM / USO for breakouts that occur and enter into the oil stocks before others notice and react to the move in oil. I plan on testing a new strategy on stocks in the next month that focuses on NR5-NR7 stocks and looking for pattern breakouts that have a high probability of making a big move.

1 comments:

NO DooDahs on 4:50 AM said...

I'm with you on the boards and blogs sometimes being a pollutant to my trading. I need to be confident of my own opinion while doing two other things: (1) draw the line in the sand where I know my opinion was wrong; and (2) admit I'm wrong when I am.

Listening to the opinions of others about my trades or about the market direction is more often than not a contaminant. It leads to half-assed trading in my case, which is why I take others' opinions as *entertainment* nowadays.

I like you blog!

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