The monthly S&P500 Emini futures candlestick chart has not had a pullback in 14 months. This has...
Trading Lessons I Learned the Hard Way, Part 8
08/10/2012 10:00 am EST
Ron Wagner of Revolutionary Trading discusses the lessons he learned from his early days of trading and how his trading has evolved to become profitable.
Now that we have a lot of stocks in my universe, I want to work with as many as possible. However, too many friends and I may not be able to give all of them enough attention.
I learned early on that first, I needed to have friends in my universe. Then I needed to see which ones were going to be the friendliest to me. But I also needed to make sure I was not trying to track too many, or I may end up losing track of all of them.
At first I felt I was a hero! Look at my huge watch list. Look at how many good candidates I found to potentially trade. Then, when I made my watch list, it took me so much time to review them that I often missed moves on them all.
I learned to become more selective. Even if I had a large number of candidates to watch, I would make an “A” list and a “B” list. Not only did I have an “A” list, but I also had exact entries, targets, and stops established for each one. In other words, I had a plan to work with each candidate, should things line up properly.
I promised to tell you that one thing that really helped improve my results, and that was it. The smaller my focus list, the more money I usually made. Some days I only had one or two friends to hang out with, and often those were my largest winning days.
As I’m typing this, I think there just might be a personal perspective on friendships somewhere in this that we could all use in our lives. It never hurts to have a lot of friends, but make sure you give them the attention they deserve at certain times.
A great question is: How do I know which candidates might be the most productive? It’s not an easy answer, and I will tell you more about this in the next edition. In other words, we have our universe; we have scanned for best selections, found our best candidates, made a watch list and now what?
I learned the hard way not to think I could make my candidates perform the way I had anticipated, but rather accepting that the outcome would be dictated by the market. I will discuss more about this, next time.
- Choose your candidates wisely!
- Give your candidates the attention they deserve!
- Create an “A” list and “B” list of trading candidates!
- Have a plan on how you intend on trading each candidate before you enter a trade!
- Don’t think the larger your watch list, the more money you will make!
We have come a long way together over the past many editions, and I hope you are enjoying the journey. Next issue, I will talk about another element that really made a difference in my trading.Ron Wagner can be found at Revolutionary Trading.
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