The purpose of this blog and website is to teach new and/or unprofitable traders how to trade. Then you can teach your kids how to trade profitably. The benefits of this is that they will always have a source of income and will not be dependent on employers, parents, spouses, government, etc. for their livelihood and quality of life. Other benefits of trading are freedom to work from anywhere, setting your own hours, and vacations when you want to take them. I look at it as a way to provide for my children long after I’m gone. It’s the same concept as the saying, “give a man a fish and you feed him for a day; teach a man to fish and feed him for a lifetime.”
Make no mistake, trading is very hard and also can be very simple. It takes enormous discipline, thousands of hours educating yourself about the markets, and thousands of hours analyzing charts . It is very easy to open an account and start trading. But if you don’t have a plan with rules, a strategy with an edge and practice strict risk management, you will quickly lose all of your capital. It is widely quoted that 90% to 95% of traders fail. They fail because they do not have a plan and rules and the discipline to follow them. The stock market is not a get rich quick vehicle to wealth, but a get rich slowly one.
Several trading strategies will be presented on this website. Choose one and master it before moving to another one. Choose a strategy that fits your lifestyle. For example, if you have a full time job then day trading is not right for you. Trade small when learning or testing a strategy (1 share of stock is fine). Is this strategy profitable over a block of 25 trades? Keep a journal of your trades: why you entered it, the date, the risk, etc. When entering a trade, don’t think how much you can make, think how much you will lose if you’re wrong. Know your exit rules before you enter the trade. I never risk more than 1.5% to 2.5% of my account on any one trade (most of the time it’s 1.25 to 1.5%) and I typically will always have 30-40% of my account in cash so that if all my positions went to zero (which is very unlikely) my account would not be wiped out. I will go over these ideas in much more detail in later posts and videos.
My hope is that this site will be a valuable resource in your trading career!
Robert Skidmore