This is one of those posts that differentiates me from 99% of the people who write about their trading.
I have no freaking clue what I’m doing and I’m not making any progress in any direction whatsoever. I’m just floating around half-heartedly watching a few prices.
I’m not making any trades. I don’t have a strategy. I don’t have a plan. I don’t have enough capital.
My lack of progress has made me completely miserable.
I feel like I have a decent grasp on the mentality that is needed to be a good trader. I understand that my emotional nature will make it very hard for me to profitably trade a discretionary strategy. I also understand that I don’t have anywhere near enough capital to trade most of the systematic strategies I have looked at.
Since I know that $100,000 isn’t going to magically appear in my account, I figure that I have two options:
Find a Systematic Equities Strategy
Just because I don’t have the capital to trade futures the way Clenow suggests in Following the Trend doesn’t mean that I can’t apply similar principles in an equities strategy. I’m going to focus on the following books to see if there is a possible strategy that would work for me:
- Unholy Grails – Nick Radge
- Weekend Trend Trader – Nick Radge
- High Probability ETF Strategies – Larry Connors & Cesar Alvarez
- The Ivy Portfolio – Mebane Faber
I’ve scanned through these books, and they all seem to offer strategies that are designed to work trading equities, which I am thinking would be more feasible for my limited amount of capital. As I read through each of these books, I am going to put together paper trading portfolios that will allow me to test out how actually trading the systems would work.
Go Back To Trading CANSLIM
I have said repeatedly this year that I don’t think CANSLIM is suitable for my personality. I believe that the approach would work fine given the right personality type, but I am not confident that my self-doubt would let me trade any discretionary strategy profitably. However, if none of the books above lead to anything, I am thinking that I might be better off focusing on getting my emotions under control and working on that big green book from Mr. O’Neil.
One of the things that has come up again and again in the Market Wizards books is that traders focus too much on entry and exit signals. We’ve all read about Van Tharp‘s coin flip analogy. I have been thinking that maybe my whole issue with CANSLIM was that I was actually TOO concerned with following the rules perfectly. Maybe if I just use their methodologies loosely to identify entries and then focus on position sizing and risk management I might be more successful.
One thing I know for sure is that I’d rather be a net losing CANSLIM trader than the sideline bystander that I’ve been for the past year. One way or another, I want to be gaining experience. If not, I might as well stick my cash in a CD at the bank and focus on my actual businesses.
Anyone else feel totally stuck, lost, or confused?