[dpaterso]

Hello,

Thanks for the great post.

I just read my last post (or should I say that I read the parts that you quoted from my last post) and I don't want anyone to think that I'm trying to be nasty here!!! I'm not. I'm just trying to figure out what I am doing differently from anyone else so that I can help. And YES to be honest: when I see that others are not doing so well or having a 'hard time' it DOES concern me and it DOES make me wonder if I'm not seeing something here. And, of course, the entire REASON for starting THIS thread in the first place was to ensure that others did not follow the path that I did last year and I would sure hate to be responsible for other traders losing money ESPECIALLY when I KNOW NOW that there is NO GOOD REASON for this to happen!!!

The only things that come to mind are:

1 - I NEVER overtrade an account anymore. NEVER!!! I stick to those money management rules as if my life depended on it (and now that I'm trading a lot of 'other peoples money' I'd imagine that my life DOES INDEED depend on it)!!! As a matter of fact I'm now trading EVEN MORE conservatively i.e. maximum margin used is still 15% of total capital but maximum margin used per position is now between 1% and 1.25% of total capital. This is not to say that there is / was anything wrong with the original 15% / 1.875% money management rule i.e. I just like having LOADS of positions open AND I like to have a little bit 'in reserve' so that I can take those 'opportunistic trades' that come along from time to time during a trading day).

2 - I do not panic (PROBABLY for the reason mentioned in '1' above) when I show losses. I don't LIKE showing losses. Nobody does. But I know that they are just 'part of the job'.

3 - No matter HOW well a postion is going I will not add to it (and would not be able to do so anyway given the reason mentioned in '1' above).

4 - No matter HOW badly a postion is going I will not add to it either (and AGAIN I would not be able to do so anyway given the reason mentioned in '1' above).

5 - I do not try to 'second guess' the trading systems (anymore) ESPECIALLY not for entry. I MAY TP early but that's not the same thing.

6 - I AM 'selective' about what I trade e.g. this week there were at least two or three signals given on forex pairs as per the VSC(1). I just did not feel 'right' about taking those trades for whatever reason. One of them I was TOTALLY wrong about and right now would be sitting with very nice profits. But the others I was not wrong about i.e. even although I'd be sitting in profits NOW I can see that I would not be given enough time to TP before the thing goes totally against me. Now THIS unfortuanately is NOT something that's going to come from a book I don't think BUT I'd also say that it's not a MAJOR reason why I'm showing decent monthly results either.

7 - A few of my trades are based on buying at a clear level of support using limit orders. In other words: these trades are NOT based on ANY of the trading systems in 'the book'. HOWEVER: if I do get my order I will use the trading systems in 'the book' to TP or 'Enron' so in THAT sense I'm always 'coming back' to the trading systems in 'the book'. Having said THIS though: this is a very small proportion of my trades and in no way contributes 'materially' to my month end results.

8 - I do get dissapointed when things go against me just as easily as anyone else. Believe me. I mean: RIGHT NOW I'm feeling a bit 'down' because of GBP/ZAR and EUR/ZAR (because those were two MAJOR signals that I'd been waiting for as you know) BUT I ALSO know that I cannot let that get the better of me!!! There is NO guarantee that GBP/ZAR is NOT going to go to 13 or (horror of horror's) 12 and that EUR/ZAR is NOT going to go to 10 but there is ALSO a high probability that this is NOT going to happen. BUT EVEN IF they drop: the fact that I know that I will 'Enron' those positions (particularly now that I've decided to trade with 'logical' orders and positions again) gives me peace of mind. I KNOW that even if I have to 'Enron' these positions: I WILL make a profit out of them eventually. And while I'm waiting to do that: I'll be trading something else and making profit.

9 - As far as stocks go: I DO believe in my 'long only' stance. I really do. It's rooted in the 'logic' that with stocks: you BUY a stock with the expectation that the company is going to do well and the stock will increase in value. As difficult as this may be to understand for some: it is NOT the same thing as selling a stock because you figure that the company is going to do badly!!! To me: selling a stock means 'I'm selling a stock to take my profit because when I bought the stock it was cheaper, the company has done well, the stock has increased in value, and I now want to take my profits'. And, I suppose, this has 'filtered through' to my forex trading as well. And don't think that by ONLY going long you're losing out. My belief is that for every instrument / pair that is going down there is another going up (but, as previously stated you're NOT NECESSARILY going to find perfect correlations between 'like for like' pairs).

10 - OK: this is ALL I do for a living so I am 'at it' ALL DAY (and mostly all night). Does this makes a difference??? I'm not QUITE sure. Yes: with the RTS it does make a difference because I can watch price movement and decide 'on the fly' whether or not to take a trade. But for the most part: I suppose the greater part of my day (and night) is spent simply 'analysing' and just 'looking at things' as they happen, watching Bloomberg and looking at their website quite a few times during the day, stuff like that. Does this 'give me an edge'??? I mean I've said before that you need to 'soak up' as much information as you can (especially when it comes to stocks) BUT is this REALLY necessary given the design of the VS and SIS and DMS??? ALSO: I'm obsessive (about most things in my life but PARTICULARLY about this business). I 'live, eat, and sleep' this business to the point where I'm a 'pain' to those around me. Is it NECESSARY to BE LIKE THIS??? Is THIS a 'prerequisite' to being a successful trader??? I cannot answer that because I do not personally know anybody else that does this for a living. Is 'the old man' obsessive???? Is John Carter or Bill Williams obsessive about this business??? I don't have the answers. For me though: BEING this way is working for ME.

Aside from the reasons mentioned above I cannot throw any more light on the subject as to WHY things are working well for ME but suffice to say that if I can help YOU in ANY way (OTHER than having to physically hand over money to you of course) then PLEASE LET ME KNOW!!!