How many of you have a trading style you called your own?
If you have one, congratulation! If you don’t have one, you need to work on refining your trading techniques until you start making money. Once you do, you have your own style.
When you see somebody you like to read on the blog posts a stock idea, do you follow the suggestion and cross your finger and hope for the best? And when this person proclaims that he is loading up the truck on this pick he posted, do you add more based on this information? If you answer yes to both questions, then you don’t have a trading style of your own.
While there are benefits to be had in seeing other people posts their stock picks that comes with their argument and thesis, the contributors who posted their picks (either buying or shorting) usually have their own trading goals and loss limit based on their risk tolerance and the “size” of their portfolio. I said “usually” because there may be a few out there who post their pick with undying belief on the stock they love. In other words, it will be like following a blind man with nothing but “faith” that this blind man will lead you to salvation. And if you happened to win big based on this blind faith and was lucky to cash out; congratulation, you just won the lottery!
In trading, there is no short-cut. If you don’t want to spend the time to study the technical analysis (TA) and go thru the trials and errors in finding the right TA that works for your personality as well as tailor-designed to your individual strengths and weaknesses, you have a high probability of being part of the 90-95% of the people who failed in trading.
So, how do you start? By taking a first step in reading a trading book, trading video, or pay for a live seminar to learn the trading skill. You won’t become good with the TA right off the bat; but your tenacity, dedication, and persistence in “applying the TA” will carry you to eventual fruition.
It took me many years to discover my “hunting” trading style. Just because it works for me does not necessary mean it will work for you. My trading skills evolve over years of trials and errors and now they become part of my “habit”. These skills, like averaging up and dumping my position as the sound of a hiccup without a care if the stock is going to take off without me took me years to refine. Yes, sometimes, I do give up runner who ran so fast that to jump back in will be suicidal. But at the same time, I also locked in many profits that could have gone back to zero or worse. Overall, from my personal experience, the benefit outweighs the cost. But these are very personal trading skills that make me who I am now as a trader.
My point here is that you need to find your own style if you don’t already have one. You are going to pay your due regardless; then why not learn something from the expensive lesson by being more systematic in your trading execution. Trade with a plan based on what you learn from book, video, or live seminar. And from there on, you will begin to evolve as a trader by continuing the process of finding your own style using the lesson you learned from each trade you made.
Instead of saying, “Damn, I thought trader A has that pinned down. I wonder if trader A is still holding the position. I’m hurting and I don’t know what to do?”
Going forward, you want to say thing like,
“Damn, why did I not follow the signal to sell my position? What should I do to stick to the gun?”
“Where should I put my stop so that if the trade bombed, my loss will be limit?”
“This stop limit is too much for me, I’m going to pass the trade”
“Trader A has this pick, but from my interpretation of the chart, the volatility is too much for me. I’m gonna pass.”
“Trader A must be crazy, no way I’ll take that trade when it is already up so much.”
“Trader A pick looks good; but I will use my own stop loss and profit target for this trade.”
In summary, if you don’t already have your own trading style or working on one, time to get busy.