Another Week in the Books
Friday, March 9, 2007 at 09:47AM 
This low unemployment report that came out this morning was a best case scenario for the market. I think if we can hold the days gains and close towards the highs of the day, then the market is likely to continue higher. Go figure.I know this correction in the market has probably caused some losses, created fear, and caused traders to throw in the towel, give up, and call it quits. Just to let you know, you are not alone. Throughout my career I can't count the amount of times this has crossed my mind. I can't count how many days, weeks, months, that I have taken breaks, or stepped away from trading to gather my thoughts and really ponder if trading was for me, and if I would really be able to make it work.
Let me use an example... I relate becoming a successful trader to an individual working towards a CFA designation. Let's say you start with 100 people. Only 40% of them pass level one. Out of the 60% that fail, a lot of them drop out and do not continue. The 40 people that passed, 50% of them pass level two (20 people). Out of these 20 people that have made it all the way to the final exam, 67% of them (13 people) walk away with the designation.
Think about your progression as a trader and how far you have come, yet how far you need to continue. How bad do you want to be in the top of your class? I wanted it more than I have wanted most things, and I had to bust my ass to get it. It took me about 5 years doing it the hard way...and the way I see it is that each of you have it so much easier than I did. You are lucky. There were not companies out there that wanted to teach me how to do it. There were only books. There weren't many successful people sharing how they were trading, or discussing what was working, or any support groups willing to help me out when I felt lost or overwhelmed. George Lucas said it best..."You have to find something that you love enough to be able to take risks, jump over the hurdles and break through the brick walls that are always going to be placed in front of you. If you don't have that kind of feeling for what it is you are doing, you'll stop at the first giant hurdle."
Do you really want to be a trader? Are you convinced that you can be part of the few that make it? I believe you can. It is very challenging career we are chasing, but it will eventually be one of the most rewarding accomplishments once you get to where you want to be.
This is what prompted my comment last night. I know that times like this people curl up and disappear and I don't want this to happen to you. This is why I want people to continue to post comments or feeling on the blog so I can see what it is that people need to get past these day to day hurdles. For the most part, plenty of people are here for the trades rather than to learn how to trade. There is nothing wrong with that as long as you are taking my "ideas" and turning them into your actions. But for the people who want to learn the "why" behind all of this, I wanted a little feedback on features, technology, or just plain ideas on what you would find helpful. Please continue to keep them rolling in. I have plans for this site and your feedback and ideas have gotten us this far. Let's keep it going.
In closing...keep your head up. Think about this not from a day in and day out perspective. But keep in mind that it could take months or years to be where you want to be. When you start thinking like this, you'll see how important things like position sizing and diversification are to a trader, and that these gains/losses are very inconsequential to what you will go through for the rest of your careers.
Hang in there.
Recommendation: Don't stop believin!
Long: ----
I already tipped my hand, tip yours!
Short:----
Reader Comments (28)
Great read....I'm long with you!!! Of course I enjoy the trades but definitely hear to learn and grow, even if it is with a huge ding to the miniscule portfolio.
It has always been my plan to earn enough from this part-time trading to buy real estate (my passion and full-time employment). That is why the video's are so good, because we get more of the understanding and why I think an audio file of commenting on our blogs would be an awesome addition.
My rules have been refined thanks to you and my eyes are better focused on what I need to see to make the trades happen. Thanks.
Gary
Boston
I'm short in ADBE and NFLX...just sold HOG this morning - good idea??? who know's but it was a planned exit at a planned time - so I followed my rules!
Gary
One thing that means a lot is the compassion that comes through on the Blog and the caring that you give when you sense the frustration that all of us are going through on a daily basis. It appears that everytime I have that feeling to "throw in the towel", you come up with the comments on your Blog that gives me the encouragement I need to continue. One of the best things in life that a person can do is learn from someone else's mistakes. I do have to say I have learned more valuable information from you than I have from the training from investools. It's almost like being on a diet. You can pay the money, get on the program, but it is the support group that keeps you afloat. Thanks again for all you do!
Debbie L.
great post and thank you for the pick me up. its important that we post and stay positive. this is my biz and im dedicated to make it work. im working 2 part time jobs while i trade full time all day. this is what i want to do in addition to coaching high school basketball.
im long BNVI as a speculative play and DGX as a channel play
thanks
brendan
ca
Can't wait for what's ahead. You are the best.
Sarah
Santa Fe,NM
That was a great read - very introspective and encouraging. This blog has been great for me as more down market days have had me giggling as I read your posts. For me that has been the best part of the blog.
One question for you, Jeff, and everyone else, what is the 'one thing' about trading that has made you as successful as you are or aren't?
Happy Trading All!!
Jodi
Canuck
Gary
Don't forget CAL. It is a confirmed H&S that has not done much for the last week until today. Still has a lot of room to drop.
Sean M.
CA
By no means do I consider myself an expert trader but I am starting to consider myself a successful one and here is why: When the market crashed last week I was stopped out of all but one bullish trade and while it was painful to watch that happen it was all part of my "disaster" plan. The puts I owned were skyrocketing and by the end of the day I was selling bear call spreads to take advantage of the huge volatility, and by the end of the second day I was actually up 4% from the day before the crash! All of those bear call spreads continue to look safe except for SNDK which I had to buy back for a small loss yesterday. I am learning that to be a success you need all of the right tools in your box and you have to know how to use them -- so the next time the pipe bursts you are going to grab that wrench and fix it instead of waiting for the plummer while your house floods.
Allen
I have to agree with Debbie, I've learned more from Jeff's blog, Master Talks, Trading Rooms, and Marketcast than from the rest of Investools or other sources. I've also learned a great deal from others posting on the blog. This community really helps me pick myself up, dust off the setbacks and get back to business.
Two other things help keep me focused and motivated. First, my sister is a much better trader than I am...and you know how sibling rivalries are. Second, I have an itch to find myself sitting next to C&C and smoke Chris (in the nicest possible way, of course) when he suggests he's a better trader than I am.
I've got a long ways to go but I see the path and I see the goal.
Thanks to all,
mike - seattle
--thanks, Meena
Hi, my name is Amy. I have been trading for almost 3 years (some paper, mostly real).
And, trading has been wonderful. Am I successful? Well, I haven't lost anything, but haven't made much either. My profits seems to even out my mistakes. The learning curve is huge! But, I keep my eye on the prize and believe that all this hard work will pay off. When I evaluate how far I have come, then I see that I am successful. Right now, my success isn't measured in $$$$. It is staying disciplined trade after trade, following my plan, and keeping a check on emotions.
Easier said than done!
I am thankful for this blog and all who participate. I look forward to reading it throughout the day and continue to look up old articles Jeff has written.
Long: PCAR, EXPD, ARW
Short: SNDK, FNM, and possibly DSL later today.
Have a great day!
Amy
Sunset, TX
Great blog post. I've gone through many periods where i wanted to quit, but i absolutely refuse to. I've resorted to painstakingly reviewing my trades (comparable to hitting yourself with a mallet) and forcing myself to realize what i was doing wrong. I don't know if i'll achieve my dream of trading for a living, but you can bet your a$$ someone's going to have to rip my heart out to make me quit.
Okay, I'll tip my hand...
Long: ARW, AUY, CYTC, IPS, MLM, PCP, WNR, ZMH
Short: BOT, CAL, DVN, EXP, GOOG, HOG, MA, MLI, SNDK
It appears that we lost the momentum we had this morning. The DOW is struggling around the significant 12,250.
Does anyone think we are finding some resistance and possibly heading back down?
Amy
You must have been sensing my mood. I’ve been trading options actively for 2 years.
I have a trading journal, I know my win/loss percentage, I know how to calculate risk, position size and target prices. My winning trade percentage is 35% across a mix of stocks, covered calls and option trades. I am confident I have all the knowledge required to be moderately successful. I’ve never worked harder to learn and perfect a skill since my college days. I spend 20-30 hours per week studying, listening to trading rooms and searching charts.
After 2 years of hard work and significant investments in my education I am embarrassed to say my trading capital is down 3% from where I started.
I’m a heartbeat from throwing in the towel. I’ve given myself until July to demonstrate a profit or I’m done.
Mike
Wow, 3%? I've been at this a year and if i'm back to only being down 3% at the end of year 2 i'll be ecstatic!
Joe
Hope I did not get too personal. The blog is great Jeff and your compassion and willingness to be a true servant leader giving all the time you do to us is trully amazing to me - Thanks!
Helping me define my rules and see opportunities is probably most important for me, both you have covered but updates on different types of systems would help.
Bob H.
CA
Mark
If you are truly on the verge of quitting, would you be open to a little publicity here? How about as a group we use your trading system as a case study, and openly discuss it and optimize it over the blog. We'll all contribute to getting you help. What do you say?