Its past time to quit moping around. I need to take what I have experienced, learn from it. Grow and do it better.
The most important lesson I have learned from the market is risk management. Specifically in cashing out when the getting is good and not even take the risk of a big drawdown. Position sizing is more important than everything else in this game.
Risk Tolerance is not something you want to be in the position of getting limits tested.
My tolerance for risk is none.
If you have a profit get out before it shrinks or becomes a loss. Get out for reasonable profits. Do not allow yourself to take a loss on a profitable position.
Do not fall in love with a stock. These are plays, dice rolls, nothing more.
I am gambling. I do not know the future. I cannot predict the future. My opinions do not matter. I cannot affect the market.
I can only attempt to ride the waves. When riding waves you must float. You must remain solvent. You must not drown. You cannot afford to take a drawdown. Use a life vest. Have safety precautions in place at all times. Your capital is your raft, you must never allow it to spring a leak or it may start deflating very rapidly.
Swing trading has consistently ruined me. The overnight gaps in this market have been vicious. Attempting to swing trade as a bear I have been bludgeoned repeatedly, unmercifully.
I got it in my head that a market collapse was imminent. There is plenty of data to support that thesis. However, I have been proven wrong. The market is at All Time Record Highs as we speak. In attempting to top tick the market I have violated basic technical analysis. Ignoring trends is so dangerous and just look at the moving averages right now. This market has been going up in a 45 degree angle for 7 years and continues to.
The truth of the matter is, the why is not important. Theory is imagination, conjecture. Making Predictions of the future is perhaps one of the most useless wastes of the mind there is because they are always wrong.
As a trader you ride a play and hope that you get lucky and it moves your chosen direction. If it does as you anticipate, awesome! GTFO and wait for another setup to emerge. If the play darts the opposite direction or does something unanticipated Immediately GTFO and wait for another setup to emerge.
It all seems so simple and it is in theory. However, once you sit down behind that desk, the numbers start flashing at the speed of light, price starts ticking up, down, up, up, up, up, DOWN, down, down, UP....
You have infinite control over your capital, your positions, your fate. We find a setup, get emotional, fantasize in our heads of hitting the home run, leverage, leverage. Leverage is todays game, todays dream. Leverage is what's going to take down the entire financial system, the very same as it did in 2007. Because humans push it to the limit, every time.
The answer is in automated mechanical rules, discipline, proper position sizing. Emotionless. There is a reason why HFT Computer Algorithms dominate todays arena.
Humans are flawed, every single one of us. It doesn't have to be bad. Hope for the best. Just be aware of our weaknesses and always wear a lifevest when sailing turbulent seas.
You don't want to drown.