I am just a beginner mate but after many years of trying, I came to one conclusion. I have to have a plan and STICK TO IT. I wasted a lot of money over time doing just what you are doing now. I was putting all my hard earned into the markets every payday. I lived and worked in the Pilbara as a single man with no living expenses whatsover. I am scared to look back on how much I threw away.
I have been a long term member of HC but do do contribute much for fear of making a fool of myself.
As times have changed, and I am no longer on easy street, I needed to find a way to generate an income. I am no longer physically able to carry out my trade, and where I currently live is in recession. Thus this year I decided to set some ground rules.
I started a new trading account by letting go of some of my longer term holds, all losing, some up to 60% of their value. I put this cash into a trading account with which I aimed to make 2% on a weekly basis. It may not sound like much, but I did some figures and if this 2% is maintained cumulatively it is amazing how fast this adds up. I have had to really tighten my belt as I have no other income and cannot foresee any for some time.
Now I layed my self some ground rules. Once I have made 2% for the week. Thats it. Stop. No more until Monday. Find something else to do. Example I was out by Thursday am this week and went and started cutting down a huge gum tree in my yard with a hand saw. I had to leave the screen until after 4pm as the the temptation to buy is too great for me, I am very impulsive. Plus climbing 20ft ladders can help physically after spending hours in front of a screen every day.
I open up HC at 3am everyday and gravitate towards the STT. I get some ideas from here and I have 4 hours to go a little bit further into the stocks before the market opens. This is my most productive time as I am an alcoholic and have usually succumbed to my first light beer by 10am. (WA time). I do not have the intelligence nor the attention span to study/understand charts and technicals except the very basics. I also follow the daytraders forum before open, and if a stock comes up that I have a little time to look into I will add it to a watchlist. I clear this watchlist at the end of everyday otherwise things get too confusing for my addled brain.
When I buy a stock, I have an idea what sort of stop loss I will put in. This can be problematic, as all my buys are penny stocks. Since I started this new regime, I cannot believe the change it has made to my bottom line. No more sitting for months with thousands tied up in some dog that is going backwards, all the while missing out on the runners that so often get picked up on this thread. I also make great use of the trailing sells, since my broker recently allowed me to access them free.
I setup a spreadsheet so that all my stocks buy/sells are there for me to study any time I get the inclination. I have also included what if scenarios on the sheets so That I may see what happens to my earnings/losses at certain price points.
I only started with a small amount as of this year, and my two percent is not enough for me too live on, and will not be for some time. As it turns out my average gain is 2.44% since Jan 1. I do not have the funds nor the brains as do some of the guys here and on the DTT, but I think back and realise that had I started this regime when I first entered the market in 2009, I would have done so much better.
I lso have an agreement with my broker that helps reduce my eagerness to buy impulsively. This is that funds must be available in my trading account at time of purchase. None of this having them allow me to purchase when no funds in the account. Even if waiting 2 days for settlement in my favour no buying until funds IN MY ACCOUNT.
So far I have had no big % wins, but it is a work in progress and I am sure I can improve. For example, I had only 3 trades this week CTM 23% AAJ 10% and GSW 8%. Only small wins but they are not losses. In total they added up to over my 2% so I stopped for the week. As many here say, no one goes broke taking a profit.
Anyway, I did not mean for this post to become a novella, but once I started it got out of hand, hope you can relate to this as you are just beginning, just like we all were at some stage.
Cheers and thanks to all the STT's out there.
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