Review and Strategy Going forward into Autum 2012

After what I would consider a slow start to the year, with only a couple of trades (literally only one in February), and then a meager spring (only a few), my summer took off and never looked back. I have managed to reach the point where my trading activities are netting almost the equivalent to my day job salary. I work almost 50 hours a week, by the way. I'm not bragging, well, I have put in nearly 5000 hours into this over the last few years, and, it seems, while I was not a slow learner, I was slow to control myself.

This morning, I took my monthly statement from my broker, along with a notebook and sat down in a coffee shop and wrote a bit. My August was decent to say the least, $1670 in profit from a less than $5,000 trading account. 5k was a bit of a barrier for me as I had been there before and crashed afterwards. Now, I'm sitting nicely at $5,800 and looking to $10,000 in the coming months. So far, September has been decent to me with $670 earned this week. I have no illusions about not needing a day job at the moment, but I think the next book I purchase will be the The 4-Hour Work Week.

In the last couple of weeks, something interesting happened, I learned to pace myself, I learned to not sit at my desk all the time and stare at the charts for trades that I had under way. I learned to trust myself, step away and allow my trades to work out. I have in fact spent less time trading and my profits have improved.

Aside from everything else I am doing this weekend, I am going to put some time into studying chart patterns, and planning a couple of automated trades for the next week. I have only limited experience with this, so I will only be using light orders for this while I get my feet wet. In theory, a few minutes of analysis a day could earn profit without me having to manage the trades while they are in process. Now, time to study a bit.

Mentoring a New Trader

For those who can impart the basics of trading and the psychology of market behaviour, helping someone learn how to trade can be as rewarding personally as it is for the student. For the student, a careful and disciplined application of their new skill set can change their life. For the teacher, the rewards are many. First, there is a reinforcement of the skill they have already honed in the market. Next, the teacher's own trading rules and respect for the market will be relearned and reinforced. Finally, there is a satisfaction to improving someone else's life.

Direct trading advice (as I have learned from my own mentors), should be avoided; a consistently successful and established trader should be able to spot their own opportunities for the duration of their trading careers. In addition, direct trade advice will carry with it, the possibility that the trade will go badly, and potentially sour an otherwise good relationship. Part of learning how to trade is learning to take both responsibility for ones losses and personal satisfaction for one's success. Trade ideas on the other hand can be given freely but with the disclaimer that results are not guaranteed. Often, the best way to teach someone about operating in the market is to show examples of market behavior, and extrapolate possible outcomes.

Much can be learned about trading by direct observation and the very action of taking a continuing series of trades; there is no substitute for direct experience. Researching from a variety of resources including books, forums, and encyclopedias can help tremendously, however, often the most interesting lessons can be learned directly with consistently successful and established traders. While this last source of knowledge might seem out of reach for those students who do not know anyone personally or cannot afford a trading coach, the knowledge is obtainable with some effort. Many recorded webinars and videos can provide a trader with a non-interactive source for this information. Topics include everything from technical analysis to market psychology to building trading strategies and everything in between. Furthermore, many brokers and several websites provide access to live and interactive webinars hosted by traders, analysts, and other experts for a whole host of topics relating to the market.


Finally, a newly minted trader, with a fresh perspective, can show their teacher new information and ideas obtained through their own research and experiences. As with other skills in life, you never stop learning.

An additional note of caution, be careful about choosing who you share knowledge with, trading is a full contact sport and carries with it risks both financial and psychological...