Thursday, June 24, 2010

6/24 1:00

I have stop-losses in place on my trades, but sometimes I don't post them if they are far away.  My Trade History is exemplary not just because I have a hot hand at the moment but because I use stops as well as process.  Currently the longer-term stop is DJI 12-day M/A.  As a trend change indicator I use the 5-minute, 380-unit M/A +/- 1.2% plus 10 points.  However on many trades my stops are much closer.  The 15-minute, 54-unit M/A and the SP futures 30-minute M/A that I've used countless times are not only entry and exit points but are stops as well, if prices move a fixed percentage beyond them.
While I'm waiting on the stock and silver markets to move I want to describe the psychology of trading (one more time).  Each person has to learn themselves what style fits their personality.  Mine has evolved over decades into a philosophy of living.  My lifestyle is very simple, from foods to home to vehicle to the clothes that I wear.  I live simple and I love simple.  The reason is that if I don't need money or approval then I am not psychologically invested in any trade.  It's not that I don't care but that I don't need.  I don't need approval of others or the next payment on my Ferrari; nothing gets in the way of the decision of what and when to make a trade.  If I need to exit I exit, at a gain or loss, it really doesn't matter. The irony is that I'll stack my trading history with anybody's because I don't need to do so. 
This blog is a trading journal and is an accurate record of my trading activity, nothing more and nothing less.  The fact that I1 is a strategic part of my thought process or that I have made money in years past or I consistently make money is not relevant to the here and now of the trading world.  The process is the key and I protect the process with my lifestyle.  The process includes stops before each trade is made. 
One more point, I have almost my entire net worth in my trading accounts, so I'm don't diversify.  I keep profits made in these accounts and only withdraw small living expenses.  I don't owe money on anything.

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