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Friday 29 February 2008

Traders getting the Sh!T kicked out of them

I suspect TraderFeed is getting high traffic right now as I'm noticing most traders are getting there accounts beaten up from all the chop that's occurred over the last 6 weeks.

Traders facing frustration-

Trader Mike
Dinosaur Trader
Stewie
Retard Trader

In other news DT is taking a break from blogging. I checkout DT's blog everyday to see the performance of the Virtual Office Traders. These last 2 months have been very difficult to trade. After my big loss in January I went through a period of depression as I predicted, caught the nasty flu that was going around and was sick for 3 weeks.

Trading with a smaller account is much harder and it forces you to stick to your stops or else you will blowup quickly. Since the start of the year I've been learning how to code with the goal of being able to backtest and make an automated trading strategy. I've got some new ideas I've been researching involving Pair trading. The focus of my new trading ideas is not to make an ATS based on a candlestick formation or some variation of indicators that tell me when to buy or sell. My trading idea is based on statistical deviation between a pair of stocks/indices/bonds with a focus on scalping and short term holding periods of 2-10 days.

I know many professional traders base there trading decisions by comparing different indices/sectors/stocks. We look for divergences and deviations between stocks that have a high correlation with one another and try to correct any miss-pricing between stocks/indices.

Some traders use a market opening order method in there trading. Premarket these traders scan for stocks/sectors that are gapping up or down and look for accompanying stocks that should be affected by the gapping stock/sectors.

There are many trading strategies out there to choose from. One thing that I think many traders lack is confidence and friends that help them in their trading decisions. Wouldn't it be nice to hear the opinion of another trader before you make a trade in case they see something you don't and warn you of something you don't see? I remember Trading AAPL back in January and I was long when it was tanking hard. I was a deer in the headlights not wanting to take the huge loss that was mounting and Stewie asked me where my stop was and I said something cocky like "$0". At the end of the day I had my worst stock loss ever and had lost $10,000 on my AAPL long by being a dumbass that didn't listen to another trader trying to help me out. If you have someone that is trying to help you out, please listen to them, because it may help you and it can't hurt. Also trade with a plan before you make each trade. The #1 reason I've lost so much in trading is from trading without a plan.

I'm open to sharing ideas, working with other traders, and making new friends. My email- highprobabilitytrading@gmail.com

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