You can only control your action, but not outcome with certainty

Want to share my story of blood and sweat with other traders.

Everyone wants certainty in his/her life and wants to find the "holy grail" that will make him/her rich without risk. Unfortunately the so-called edge in trading is a statistical one, which academic calls "stochastic opportunity set".

I started out a little over 4 years ago reading WSJ/Barrons and lost half of the first investment in a month. After that I learned to be market neutral and made back losses in a month. After that I quadrupled account size by taking out a HELOC loan, and then turned each $1 into $5 in 4 years. 

The more time I spent in the market, the more I learned about myself and the more I realized how tiny one's edge is. The margin between making and losing money consistently is very very thin. While I still read WSJ and Barrons, I read them for fun and for understanding the country's politics better. For trading itself, I give much more weight to price actions. Prices do not lie. If you trade very short term movement, price is a sufficient statistics in telling what is coming. 

Now I make reasonable money consistently from trading and I am contemplate making trading a full time career. Trading taught me to be always objective and always make the best decision given the information on hand. Your daily PnL statement will not lie. If you are wrong, do not dwell on it. Cut losses quickly and move on. We can only control our action, but we cannot control the outcome 100%. A 60% trade is a good trade. A 80% trade rarely ocurrs. If you keep on doing the right thing, over time money will take care of itself. Man proposes. God disposes.

Just my 2c.

所有跟帖： 

• Great Post! -peopleman- ♂ (0 bytes) () 04/02/2013 postreply 15:35:23

• Ding! Price action is everything. -美西游子- ♀ (0 bytes) () 04/03/2013 postreply 09:37:23