Do I Have to Accept some Big Losses in the Beginning?

This is a discussion on Do I Have to Accept some Big Losses in the Beginning? within the New to Trade2Win forums, part of the Reception category; Originally Posted by Crap Buddist Lose your ego lose your personal emotion lose your ambitions lose your desires lose your ...

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Old Jun 26, 2008, 9:03am   #17
Joined May 2008
Originally Posted by Crap Buddist View Post
Lose your ego
lose your personal emotion
lose your ambitions
lose your desires
lose your attachment
lose yourself.
If i lose myself and my desires, whats the point in making money?
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Old Jun 26, 2008, 12:54pm   #18
Joined Dec 2003
You should not have large losses at the beginning. Loss over 5% on a small account is large. 10-15% is gambling.
You will have losses sure, keep them small, it can take years to understand how to make profit in the markets, by that time it is wise to have some money left to be able to put your knowledge to work.


Be conservative on your capital until you have mastered trading. Don't add to loosers.
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Old Jul 1, 2008, 4:00pm   #19
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Joined Dec 2004
Originally Posted by Victor90 View Post
If i lose myself and my desires, whats the point in making money?
Thats why you need a split personality for tradingg!
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Old Jul 1, 2008, 4:54pm   #20
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No you don't need to accept large losses - losses albeit controlled ones are a fundamental part of trading and you have to learn how to take those. You need to learn how to limit the size of your losses and the size of each bet so you'll survive in the long run. Trade Your Way To Financial Freedom by Van Tharp would be a great start. And then have fun exploring and discovering a way of trading that you enjoy that makes you money.

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Old Jul 2, 2008, 10:31am   #21
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i think you have to be alert to the possibility of a large loss. if you trade (on a SB) with stops and don't pay for guarantees then you could get massacred. Obviously paying for stops makes you less profitable but hey-there you go. If you're DMA then stops could mean nothing if there are no orders to trade in the book so large losses are always possible.
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Old Dec 21, 2008, 1:55pm   #22
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Joined Dec 2008
Good Observation

When I got into day trading had discovered this pattern on my own watching a few stocks that seemed to have this timing pattern. Jumped in doing a thousand shares a day and started on a winning streak. Yes, there are a few loses, but a careful watch of the market and a willingness to take a small loss against some large gains turns very profitable at the end of the month. The day trading approach using this time frame approach resulted in a complete balance of the unrealized losses of my long positions held through this crash. I'm in the difficult position of deciding which longs to sell for a loss to balance out the short term gains. Have decided to just make this a tax neutral year and walk away with the winning tax free. Of course there is the reality of the long term losses, but they can be put back in portfolio using the day trading/timing strategy. Due to the US wash sale rules it's difficult to do this for long term holds. But bottom line, this approach is fairly basic and does work. But keep the emotion out of it. I set my objective at $1 usd, and close it out unless the momentum and rsi are staying strong. For the novice, this is a very basic, easy to follow strategy and it sure isn't complicated. Just pay attention to what others are saying: Keep the emotion out of it, have a clear goal and stick to the plan; don't second guess an established pattern!!
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Old Dec 22, 2008, 5:28am   #23
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I think the answer here is really easy too, absolutely not. Just understand that you have a 92% chance of failure and that most succesful traders started out by going through three accounts, then you'll be ready to go. The guys who lose a bunch are the ones going in thinking they're going to make a bunch. Open up a teeny, tiny, account with very very low commissions. Trade a few shares at a time. That way you'll gain real experience and lose only a little or nothing at all. Your first goal should be to lose nothing.
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Old Dec 24, 2008, 5:23am   #24
Joined Dec 2008
I completely agree. I now trade very small lot sizes while learning how the process works. Find out if you are able to make $10 or $20 dollars a day consistently. If you are able, then you can build on this. If you are not able to be consistent then don't even bother dreaming about making lots of money. I have lost money because I "believed" in a stock, didn't think it would go below a certain point, or wasn't clear on short term vs. long term trades. I have only recently started keeping track of all my trades and wrote a simple program to calculate "expectancy" using excel. This has given me some accountablity to the profit potential of my trading plan. Over 37 trades I have a positive expectancy of about 9 dollars per trade. Doesn't sound like much, but it sure beats losing. And there is little emotion (like paper trading). Derive you excitement from building a good trading plan rather than scoring big on one or two trades. IB offers one penny per share commisions which is really good for new traders.
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