Wednesday, December 05, 2007

Trade More Profitably: 9 Effective (and Slightly Badass) Ways to Just Do It

Whoa! We're alive! It seems the booze and turkey from Thanksgiving knocked the lights out on the blog for a bit. We're back and in a market that still acts like the other shoe is going to fall. In fact with a Bloomberg/Los Angeles Times survey now saying Americans are expecting a recession within a year by a margin of 71% to 23%, NY AG Andrew Cuomo serving subpoenas to Wall Street's tallest over the sub-prime mess, and (most interestingly) a Hedge Fund Research Report that says hedge funds are set to record their worst returns since 2000, it's a wonder the sky isn't falling.

"So how you doin'?"

Today I'm offering the advice from 2 of the most veteran traders that first envisioned Trade-Ideas so that you can filter what the Chicken Littles are crying about and better navigate the market's waters. The 2 traders are Dan Mirkin (aka TI Maven on this blog), Senior Managing Partner of Trade-Ideas (and former SOES bandito) and one of our first and long-time customers, DiamondTrim (aka Brad Williams).

Let's call it a wake-up call checklist. For the math whizzes - the list is really 18 - plus a bonus. Where's my list? Hey, I wrote the article so I will reserve the right to pick my preferences from what's here - that's what is in bold).

Dan goes first:
  1. Money Management, Money Management, and Money Management
  2. Don’t be fooled by randomness
  3. React and then refer to number 1
  4. If it seems too easy it is (Green lights and red lights are for cars)
  5. KISS
  6. Better to be lucky than smart
  7. If you are short stacked don’t bother trying
  8. Run it like a business
  9. Don’t fall in love
DiamondTrim weighs in next.
  1. Find a badass mentor
  2. Let your profits run
  3. Use stops (protective and trailing)
  4. Use Trade-Ideas Pro
  5. Use the OddsMaker and the Autobot
  6. Have a game plan and trading objective
  7. Don’t trade scared
  8. Find a broker with good technology and "cheep" commissions
  9. Trade without emotion
EDIT: I also gave this to our Director of Education, Jamie Hodge, who is always available to schedule a 1-hour training session with any subscriber to Trade-Ideas. Take advantage of Jamie's experience and his ability to get you started with a strategy that models your trading plan. His thoughts:
  1. Begin every trading morning with a pre-defined lists of actions that will be executed when certain catalysts dictate.
  2. Do Not Deviate from Rules (Actions)
  3. Be Consistent
  4. Try and kick pre-conceived notions to the curb.
  5. If the market isn’t lining up and your signals aren’t coming – Don’t force trades
  6. Do your after market scanning religiously
  7. If the market is dead, it’s dead. Take the rest of the day off.
  8. Use the Odds Maker
  9. Open an account at Assent or OptionsXpress and use the revolutionary Auto-Bot powered by Trade-Ideas (Ed. Note: these are the first two brokers to partner with Trade-Ideas in offering automated trading based on Trade-Ideas strategies backtested via The OddsMaker - more are on the way. Please contact Jamie Hodge for more details.)

Shop from this on what works best for you. If even one of these reminds you of the discipline you should have while trading or actually matches a long-held belief of yours - your trading day just got better odds.

1 comment:

Andy said...

I think kicking those pre-conceived notions to the curb ought to be #1. Someone on The Big Picture once observed that the successful investor must have "strong opinions weakly held." I struggle to achieve that state of wisdom. To see how much: http://www.extramayo.net