The profit of the loss and the loss of the profit !

[sebfr]

Hi,

This title coulde be the tittle of a book and i want to share whith you my experience of market. This phrase coulde resume my attitude about trading.

I like 3stocksonfire (great sites, great forums, great traders with good information)...At the beginning i just believe that section "the $1000 contest" wasn't serious for a such good site..But with more thought i believe it was a great benefit for me to participate at this topic..

I was completly WRONG...And why ? My attitude was like when i was a beginner trader : i just see PROFIT PROFIT PROFITand CHALLENGE CHALLENGE CHALLENGE...GREED GREED GREED ARROGANCE ARROGANCE ARROGANCE...People like great stories : "how i make 1 million in 1 year" "How i turn 80% of my trades in success"..And people who says that says also trading is not complicated ! If you listen them, a children could be a winner trader...So why not me !!! I am not stupid, i have do several years of studies...

So We try to make 1 million with $1000...And what ? We forget all our reasons, no business plan, we go directly to suicide..And why ? We take TOO RISK...We MUST to win...We have read a lot of books talking about trading and NOW we have the science...But we FALL...And more we try to win 1 million and more we fall..

So i m sorry to have participate at such game...Live is not a game...Trading is not a game...Trading can be a drug and sometimes our spirit fall again in the addict.

I don't know for you, but i have bought a lot of books talking about trading and at each time i was dissapointed...I look for "hOLY GRAIL" (even if i say "No, it doesn't exist") a METHOD with success. And now i understand that books wasn't bad (just some !), it is just in my spirit, my attitude was WRONG. The best books about trading and the most important in tarding is not strategies these books revealed BUT The state of mind...The four rules i have found in these books could be resume at that :

1. Have the right mental. Control your emotions
2. Have a plan. A business plan.
3. Have a good money management. A good momeny management = limited your loss
4. find and Adapt strategies at your personnality.

I have found these rules in books like "Mastering the trade", "Trade Your Way to Financial Freedom", "Trading for a living", "disciplined trader"...

The lesson of my participation of the "$1000 contest" :
I MUST TO HAVE A SUCCESSFUL TRADING BEHAVIOR...

Let John F. CARTER talks about that : "Whenever i focused on the setups and not the results, i did fine. But Whenever i focused on the results and not the setups, i got killed". Before every trade i make i read this sentence to see if i am on the right way. So i fall to turn my account into a million dollars because i was focused on making a million dollars and not on the setups. GREAT LESSON. Thank you "3stocksonfire". "This caused me to jump into the trading habits that ruin all traders : betting it all on one trade, not using a stop because the trade "had to work out" and focusing on making a million bucks instead of waiting for a high-probability tarde setup"

So you understand the tittle : "The profit of the loss and the loss of the profit" :
1. "The loss of the profit" : I fall if my spirit is focused on making profit
2. "The profit of the loss" : a. Losses is full part of trading. You must and need to accept that. If your spirit isn't ready, don't trade and try to win a million by playing at lotto. b. Focused your spirit on high-probability setups. The most important thing in this plan is to focused on place your stop-loss before to see how many you could win. I beleive that the art of trading is not the art of finding winning trades but it is the art of learn to loss.

In conclusion, i would like to give you an example of a good setups for me. I am above all a technical analyst. Because technical analysis correspond to my personnality. You can win by being a technical analyst or fundamental analyst or by a mix of these two setups. Be your own master. Learn about yourself and better you will make good trade.

Have a look on JNPR on 27 june :
I take a short position in JNPR. Why ? market is extremely strong at the moment and being short this market is risky. But i decide whether it's worth the risk. Reasons :
1. JNPR is since several month ina major Downtrend. It makes a pullback (a minor uptrend).
2. The stock is near a level at which the stock faces support turned resistance as well as previous resistance (17.45). What further solidifies this price level is the fact that it touches the 200 day moving average, a level at which JNPR will also face resistance.
3. Candlestick : A spinning top is formed -> indecision between bulls and bears.
4. Volume : Volume are more and more low near resistance.
5. Oscillators : indicating the stock is over bought and due for some selling pressure (RSI and %D)
6. Retracement : we are at 50% retracement since the breakaway gap and line of 50% is also the resistance line.

Strategy :
Entry point : 17.10
Stop-loss at 17.50
First target at 15.20
Reward/Risk ratio of 12.5 / 2.33 = 5.36...Excellent...We such a good ratio we can rise the stop-loss level

I hope this topic help you to become a better trader. See you soon.