"James M. Ray" wrote:
>
> Hi Hans. Wow, a trader! Unlike Hans, I'm unable to both sleep and
> think about a risk that can lose me more than what's initially at stake.
Actually, I'm more of an investor than a trader/speculator. Good trades
can last well over a year. Bad ones? Well, usually I get stopped out
in a matter of days.
The image of futures traders is of a guy huddled over a phone shouting
"Buy! No, Sell! Buy! Buy! I meant Sell!" The longer term investment
approach is about as exciting as watching paint dry. Investors usually
trade in much smaller size than a trader with similar capital.
> It's just not my kind of gamble. I bet on chess more than poker, and
> obviously the other day I (happily) bet on Funbonds, but I like to win
> unless I'm deliberately-losing, if that makes any sense. Learning is
> fun, but I doubt I'll be joining Hans because I'll want a 'sure thing' if
> my money's involved (or at least a fighting chance!).
I just happened to check The Gold Casino last Saturday. Just a fluke,
timing-wise. I bought all the Funbonds I could, but it caught me
off guard, as I didn't have a significant amount of e-gold available
at that time.
> OTOH, I'm very happy to see that Hans is on this list. Hans, do you
> ever trade upon seeing the metal advice given here? (Is it "all in the
> charts" for you, too?) Do you have a specialty, or do you trade in all
> sorts of commodities futures? What made you get into a business
> where (at least it's my understanding that) most people lose money?
> JMR
I occasionally take a trade based upon tips, hunches, etc., but am
usually sorry for it. Mostly, I trade mechanically, using trading
systems - both commercially available ones and those that I have
developed myself. (Incidently, I might be offering one of my better
systems for sale if I can get it a little more 'user friendly'.)
The trading system approach is, *in my opinion* (insert grain of
salt here), best simply because it can be tested and statistically
verified. At least if it is done correctly. Most other methodologies
are, at best, hunches. "Buy if G.W. Bush sneezes", although it may
be profitable, is hard to verify. Most (but certainly not all)
chart patterns fall in this catagory. FWIW, triangles seem to
be one of the better chart patterns. But they are a little hard
to quantify since it difficult to objectively describe what looks
obvious to the eye. Do you ignore a tiny price spike out of
the formation? Subjectively, most of us would, but your computer
might not. How many waves make up the triangle? What about slope
of the sides?
The 'most people lose money' theme is an interesting one. Most
quote figures of 80% to 95%, but brokerage studies show it to be
a little lower at 70% to 75%. It seems that human psycology and
markets do not go well together, as the natural tendency is to do
the opposite of what is right. For example, you have a long position
in, say, soybeans at $6.00. It goes down a little. "Well, this is
a temporary dip." It goes down further. "Hmmm.. This isn't looking
good. I'll get out on the next bounce." It doesn't bounce, but just
keeps getting worse. "I can't sell now, it is getting WAY oversold.
I should be buying." Finally, it tanks big time. "Sob! I should
have known better. I guess I'll just have to take my lumps and
be wiser for it." This is usually the true bottom.
The way to last is to have an objective plan. This is where a trading
system is invaluable. You enter at some set point, you get out at
some predetermined point if things don't go well, and you have some
method of extracting a profit if the trade does work out. Put the
wheels in motion, and then go sit on the beach.
Typical statistics for successful systems are 50% wins, with the
wins being large enough (as compared to the losers) to give an
average of $200 - $2000 profit per trade, depending upon the market.
Boy, I have rattled on way too far. FWIW, several of my systems
appear near (near as in days to possibly weeks) to a buy in gold.
I am taking VERY small positions in anticipation of these signals,
as I bought at decent levels and my risk to stop is very small.
When the systems indicate, I will increase size.
Until later,
Hans.
---
You are currently subscribed to e-gold-list as: archive@jab.org
To unsubscribe send a blank email to [EMAIL PROTECTED]
Did you know that e-gold Ltd. stores more gold on behalf of customers
than many countries? See http://www.gold.org/Gra/Gra1.htm and the
e-gold Examiner at http://www.e-gold.com/examiner.html for details.
