Sunday, December 20, 2009

Standing Aside in Slow Markets

The post title comes from Brett Steenbarger's post in his blog[edited] : He writes:

"I haven't traded this week. I placed two trades last week and closed them out quickly, one for a modest winner; the other for a modest loser. So this will possibly make two weeks where, basically, I haven't swung the bat and haven't made any money trading.

I'm fine with that.
And eventually I'll get market moves worth trading for my style of trading.

But one key to longevity in markets is being able to stand aside when markets aren't giving you good pitches. It's the capital I don't have at risk in markets that allows me to keep my trading capital out of unnecessary risk.

To have a passion for trading--but not a need to trade: that's a great place to be if you're going to last in the markets"


Dr Steenbarger discusses another issue: What would an ideal training program look like? He says:

"It would have to teach the market basics: what a market is, how a market operates, how trends form and change, why markets become more and less volatile, how markets are interconnected, how and why news can move markets.

It would have to teach the trading basics: how to use trading software, how to define and manage risk, how markets move during and across days.

It would have to illustrate patterns that evolve from market operation and then help new traders identify those patterns for themselves: first on paper, then in simulation mode.

It would have to show new traders how traders exploit those patterns as setups: defining risk/reward; entering positions, managing positions, exiting positions.

It would have to help traders tackle those patterns for themselves, first in simulation mode, then in actual trading.

It would have to offer mentorship and coaching: supervision from experienced traders to review performance, correct the mistakes of new traders, and focus the learning process in a goal-oriented way.

It would have to offer these services from actual market professionals who have "been there and done that" successfully.

It would have to be so concentrated as a learning experience that the normal "ten year rule" of developing expertise could be greatly condensed, but it couldn't be so brief that it offers information only without focused skill building.

Developing such a curriculum is no simple task. Implementing such a curriculum is labor intensive--and yet it needs to be reasonably affordable for new traders."

I hope you enjoy reading these posts, as much as I have.


Pradhan Iyer said...

Nice one Sudarashan. Enjoyed reading it.

Pradhan Iyer said...

sudhi, small correction.
It is and not I guess. Pls check.

Student Of Market said...

Sir, would you please consider offering coaching as a Technical Trends service? I suppose the price would be too high for me, but those who can afford - it will be great for them.

And for u perhaps another way to leave an enduring legacy?

With highest regards,