Saturday, October 07, 2006

Being profitable

Are you profitable?

Let me quote you a lesson

A martial arts student went to his teacher and said earnestly, "I am devoted to studying your system. How long will it take me to master it." The teacher's reply was casual,,,,,,,,,, "Ten years."


Impatiently, the student answered, "But I want to master it faster than that. I will work very hard. I will practice everyday, ten or more hours a day if I have to. How long will it take then?"


The teacher thought for a moment, "20 years."


Make the following commitment


I will learn for as long as it takes
I will stand up everytime I find myself at the bottom
And somewhere along the road I will decide to win
It is possible to trade successfully, but you need
  • an edge
  • a commitment
  • discipline
  • a will to win
  • the ability to look at your failures and learn from them

Does it help to see results? I know, I was looking for proof for quite a long time. So it might be the same for you reading this blog. I became profitable in June this year after 5 years of struggling and trying to keep myself somehow afloat so I could continue on my way. Looking back now, I know, I had a string of luck in June and July and was able to resist the temptation to increase the leverage used.

10k$ per contract traded. I will goto 2 contracts with an account balance of >20k$.


May I lose it again? Maybe. Everything is possible in trading and I can’t rule out a string of 15 losing days in a row or one freak trade, which wipes the account. It’s the risk we all take, the risk we have to accept in this profession. Limiting leverage is one, is the only way to deal with it. And to tell the truth I feel a lot more comfortable now, than in June, when I had to trade with the 5k$ / contract margin.

I’m sure there are traders out there saying “what is this jerk showing us here, I’m making 2k$ / day” or “I have 50k$ in my account and that’s the bare minimum I would consider for a trading account”

Never forget:

If you can’t trade 1 contract profitable, do you really think you can trade 5 contracts profitable?