Friday, March 26, 2004
Towards the end of the day I saw that the cotton didn't continue it's rally so I shorted it again at 64.50. A quick little rally right near the close pushed me offside but I think it's ok to run this with a stop just over today's high. It looked good tonight on the weekly chart. As a matter of fact everything I've got left over this week looks good on the weekly. I still can't get over just how close the bond trade came to stopping me out. One tick. That's 1/32nd. I just love it. Now, the smile would be on the other side of my face if it had taken me out by one tick and then spent the rest of the week falling like it did. That's the other side of that coin. So I'd better not gloat. There will be lots of times as there have been where that one tick get's me out and I watch it go the way I'd bet.

A excellent trader/friend of mine sent me an except from a newsletter this week and I'm going to publish it here. Credit needs to be given to the author Chris Mercer. I re-post it here for your benefit because I think it will help you re-think your approach to your trading and increase your profitability. Excerpts are below for your benefit.

Chris wrote, "Traders are always looking forward. The trading world is about going ful speed ahead, finding the next trade and trying not to thinkabout anything that didn't pan out. "

"What's odd to me is that if something doesn't appear to be working, people tend to think that the solution is in finding more complicated indicators to use for trade entry. It's almost as if they think that filling their trading desktops with more wavey lines and colorful indicators is going to help them out. The attitude basically comes down to 'just keep pushing forward and learnning more and more mathematical extrapolations on the market, and eventually you'll find the magic one.' But overly complicated technical reads on the market don't really help make anyone a better traders That's the fallacy."

"and then there's reality. Trading isn't about how complex one makes it, because most of the time the answers the trader is looking for are in the past, not the present. And yes, everyone needs to understand charting, get some experience entering and exciting trades, and learning how to deal with the psychological aspects of trading. But no, to be successful, traders do not need an extra 5000 pixels on their desktops to squeeze in six extra indicators."

The author continues to discuss his ideas of the trader's full spectrum of a successful trader's ability to trade the markets. He concludes with "along the spectrum is the person who learns to win more trades than they lose but still keeps relatively tight stops and therefore doesn't end up stuck in anything that takes back a big piece of the year's gains. This is the sweet spot of trading"

Over the now 20 years of trading I've sometimes enjoyed, I have been very quilty of dropping one method when 'it stopped working' , heading back into the books, learning and studying more and then applying that new-found knowledge to my trading. I have come to realize and hopefully will help shorten your growth curve, that path does not lead to successful trading. There is also NO 'holy grail', secret sign in the stars or Mr. Spock hand signal you might suddenly fall upon to reverse your trading fortunes. The market is made up of winners and losers and no amount of information overload will change that. YOU cannot change that. Choose as your trading partner the diligent study how the market internals, price, volume and the support and resistance levls created through buying and selling within the market. Stop relying on an indicator superimposed after-the-fact. Start to learn from your mistakes and see through your trading log how you could have better managed your trades. When your understanding improves you'll be invited to the dance with the knowledge that you'll actually strike out more often than you'll hit a home run. That's ok because that's the reall way to play the game.

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