Blog Mission
The mission or the purpose of this blog is to keep myself in discipline. I have mentioned it in my trading diary and I will keep mentioning it in my future post. I also use the blog to show how I do on my trading. I will post update frequently in my trading diary. My goal is to gain half of a percent on my trading capital every day.
Over the course of trading I found that lack of risk control, over ballooned optimism and greediness are the root causes of big lost and failure. In fact the recession we are currently in is also caused by these factors. These are the inborn nature of human behavior. We tend to forget about discipline from time to time in front of temptation. In order to control risk and to trade defensively I want to put in some guidelines and enforce it on myself and I think this blog will be able to do that.
Sounds like an abdicated gambler trying to get control of himself? I gamble a little bit and I understand gambling very well. Gambling is different from trading in that when you are playing on a slot machine you are always betting on the side that the chance of losing is always higher than winning. Trading is a whole different game and from time to time you will find opportunity to bet on a side where the chance of wining is a lot higher than losing. That is why I start believing in trading.Nevertheless, to find the opportunity and the right side to bet on in a trade requires hard work and discipline. I set up some of the basic guidelines that I want myself to follow.
- If you are able to make half percent of return in any trading day you should be very happy with it. Half percent in terms of my current investing capital is about $150. So I should be very happy if I can make $150 a day on trading. I did some calculation on this. If I am able to persistently gain half a percent on any trading day my monthly return is going to be 10 percent and it will take roughly 3 years to make me a millionaire. Does it sound too good to be true? Of course I don’t expect that to happen in 3 years. But time will tell.
- Trade defensively and invest maximum one third of your trading capital on your first trade during the day so that when the market go against you. You can re-evaluate the price level and the market condition to decide whether to increase your bet or to exit.
- If you see a good entry point always think about the possibility of a better one. Entry point is critical to make profit. If you see a good exit point take profit.
- Don’t force yourself to see profit on very trade or see profit on every trading day. Lost will definitely happen and when it happen you should be in a position to take it easily.
So much so I have to be persistently following what I said here and keep reminding myself everyday.
