Hi It’s me! I’m back….the Central Scrutinizer…
Sorry, always wanted to get a chance to do this. I have been a huge Frank Zappa fan for as long as I know. The Central Scrutinizer is from the total genius album Joe’s Garage.
One of the themes of the album is about a young man who chooses a career in music and get’s a bit lost. The comparison to trading doesn’t compare 100% but I just wanted a link to the album lol.
Having said that choosing a career in trading can make you feel a bit lost very quickly and a lot of the helpful or even seemingly useful information almost looks like it is there just to confuse you even more. And then, of course, there are the opinions that people have that are not very helpful.
What is it that they say about opinions? They are like - it starts with A and ends with holes - and everybody has one.
And how the hell do these brokers get a hold of your telephone number? They start calling you promising that they are there to help you. Yes! I fell for it. They convinced me that if I am doing well that they are also doing well. “Naturally, we were easy on him. One of our friendly counselors gave him a do-nut…” (Joe’s Garage) Only to find out that they couldn’t really care less.
Unless, maybe, when you are about to open a 100K account. Don’t know about you but there are quite a few days that go by that I don’t have that kind of money.
Now I am not sure about the broker but I can imagine that if a small trader is doing well and if you have enough of them that you, as a broker, could ultimately do really well. Let’s not wait for them though.
So demo account and live account ticked off the list. Now you are finding yourself completely clueless about what is actually happening on the charts and you’ve heard some guy in a youtube video talk about his strategy that is proven and guaranteed to double your account in less than no time.
You try to understand what he is doing and try to replicate it on a trade and you lose. Try again and lose some more. Hm! Need a new one. This one is broken. And so you jump from one strategy to another for a while until you have effectively blown up your account again.
This is not as easy as I thought it was. And, like Joe, you dwindle off into the twilight realm of your own secret thoughts and lay on your back until dawn in a semi-catatonic state….
It is funnier if you have listened to the album...trust me!
Strategy hopping is a major account killer and it will most definitely slow down your growth as a trader.
If I could do it all again I would first get acquainted with the different strategies that are out there and seriously check which one resonates with me. Even back then, not knowing much of anything, I would have said no to scalping. To fast and it makes me nervous. I did try it though. Only to find out that I was right. Didn’t like it and it made me nervous as hell.
Find your trading style. Ask yourself if you are a sprinter or are you more up for a marathon? Do you like it technical or fundamental? Do you like high risk or low risk?
There are many questions and to go through them here would be a bit too much for now but I can recommend to have a chat with someone who has been trading for a while and who has no financial interest in what you will do in the future.
Talk to fellow beginner or more experienced traders about what they do and what strategies they use. Take your time to pick the one that sounds best. And when you have made your choice open wide and sink your teeth in it and don’t let go until you have mastered that method. Learn it inside out.
A strategy is nothing more than you having an edge in the market. Your strategy should be able to produce consistent results in order for you to be profitable in the future.
Any strategy can work and no strategy is the best! Bottom line is that money management and risk management are what will save you. But you have to enjoy the strategy in order to be able to do this day in, day out.
"Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense" - Buddha
Don’t be like Joe end end up on the day shift at the Utility Muffin Research Kitchen, arrogantly twisting the sterile canvas snoot of a fully-charged icing anointment utensil. And every time a nice little muffin comes by on the belt, he poots forth …
Thanks for reading, comments are welcome!