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the readers of this book, have minimal or nonexistent money management skills and are basically trading system addicts. You must master three disciplines to succeed in speculation: |
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2. Psychological development |
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Most traders become fixated on and obsessed with the trading methodology and completely ignore the other two disciplines. This situation has not gone unnoticed by some clever marketing individuals and has given rise to the proliferation of seminars and trading system vendors selling questionable material for thousands of dollars. Unfortunately, as most of the individuals who purchase these products eventually discover, you cannot buy trading success. |
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Neal: Can you show some real-world examples and actual trades? |
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Phantom: I don't use trading software. Every individual has his or her own unique personality makeup regarding risk and reward. When you use someone else's trading software, you are trying to force their risk/reward outlook, which is designed into the software, into your personality, sort of like putting the square peg into the round hole. That's probably why traders invariably try to modify a trading system they have purchased by changing the stop-loss or profit parameters. The personality that designed the software was different from theirs so they try to bend the trading parameters to fit their own psychological makeup. Developing a trading methodology should be like buying a suit. You purchase a suit that fits your own height and weight, not someone else's. Don't try to fill out a suit designed for Arnold Schwartzeneggar. I wrote The Manager software in Quickbasic language. It is a simple, no bells and whistles program that provides me with all the money management statistics I require. |
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