Angry traders
My most recent post has garnered a LOT of e-mail and a few comments so far. I am surprised by the number of people who get upset at me for some of the decisions that I make about how I spend my money. My viewpoint is that it takes money to educate myself, and some of that money is going to be wasted on stuff that doesn't teach me anything (other than to avoid wasting my money like that again!!).
I've spent a lot of money on services, newsletters, trading plans, mentoring, screeners, etc., and with very few exceptions, I've learned from all of them. Trading is a discipline that's in constant flux and has billions of bits of information that are impossible for anyone to totally comprehend. That's what I enjoy about it. It's new every day and there is always something to learn.
You can't be a tightwad with your money if you want to learn how to trade. There is lots of information out there for free (including this blog), but you've got to pay for the deeper stuff that can only come from talking to people who can actually show you how to make money because they've done it.
Yeah, I made a dumb mistake buying this last bit of information. But I'm not flailing about like a chicken with my head cut off. I have the discipline to make money as a trader, and I've made a lot in the last few years.
This year has sucked, but I think I've grown more as a trader this year than the last 5 combined. I'm within a few months of actually fulfilling my goal of trading full time for a living, and I was nowhere near that just six months ago.
So be assured that I'm doing OK. I haven't gone insane, and I'm not a sucker, or "completely clueless" (most of the time). I wasted 70 bucks, but I'll be able to recover. Trading isn't easy, and I think that I'd be doing everybody a disservice if I avoided discussion about the boneheaded decisions I've made.
Posts
11 comments:
Scott,
Ignore the naysayers. There is nothing wrong with experimenting and trying out different strategies. It is your time and money so it shouldn't bother anyone else.
Still I can understand how some people are not ready to deal with the changes. Everyone is constantly trying to improve their trading strategy and find their niche in the game.
Even though day trading is not my thing, I can never be a hater. It is good that you are trying it out. Stick with it and see how it works out. If it helps you generate extra income then it is a good strategy. If it doesn't work out, its okay. You can at least say you tried the strategy out and it wasn't for you. Anyway, keep up the great work and best of luck on your trading.
Best,
Nick M.
The readers who disagree with you are doing you a service. Those who agree with you provide you with nothing. After a day of not following your plan and screwing up completely, you state that you're confident everything will work out. Why are you confident that you're capable of doing something that you demonstrate on a daily basis that you can't do? You did better as a screener.
Anonymous,
The Zweig is down nearly 16% YTD. The monthly rebalanced Foolish 8 is down 32%. I hardly think that following screens would make that much of difference in my trading portfolio right now.
If you have some insight into why you think I'm messing things up so badly, you're welcome to share it.
You must not have been reading my blog for long because the month of August went pretty good. I may sound like a complete goofball, but my strategies are well thought out. I like to add a bit of humor to my frustration when things don't go my way, but I don't think having one day go against me is reason to pack it all up and quit.
Nick,
Thanks for the support. You make me feel tingly.
As far as I'm concerned, it is okay to experiment with different strategies. Perhaps Scott may find that are shorter term strategy works out better during market downturns and a screen based strategy works better during market uptrends. What good is it to discourage him from trying out something. If the new strategy work out, thats great. Great for Scott. If it doesn't, who cares, it doesn't work. The point is, he wont know if it works or not if he doesn't try it out. Anyone who is too fearful of change and trying out new strategies is bound to failure.
Scott has been trading long enough so that his trading should be a product of his own research and insights about the market. Using blogs like the Afraid to Trade site is absolutely mystifying. The guy running that site doesn't seem to have any more experience than Scott.
Giving up on a screen like Zweig is short sighted. Scott had some drawdowns and he bolted. As Ed Seykota once said: the only way to avoid drawdowns is to stop trading.
YTD 28.2% Yes, I'm very afraid to change.
And when do you get to put that 28%in your pocket? By the time the stocks fall off the screens list, that 28% return gets whittled down to nothing. Just blindly following a screen gets you nothing.
The return from Zweig over the last ten years is a bit more than nothing. Trade the the facts--not your fears.
Anonymous,
I understand that the screen has an impressive long term track record. What I do not understand is how the return is calculated. If one is following the screen, when are positions liquidated in order to take profits? How is that determined while following the screen? Is it a personal preference or is a stock assumed sold once it falls off the screener?
It was an anonymous comment that started this comment thread. I've enjoyed reading the responses and don't judge comments by whether they are from anonymous, rick, nick m or whatever people say they might be. If I can vote for the President of the US in secret, I think it's OK to post to a blog anonymously.
Signed,
Anonymous
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