Break out the coffee and diet pills East Coast dwellers...Master Talk starts in less than an hour. I wanted to post this weeks trading quote given by Randy McKay, who is another Market Wizard before we start. He says:

“When the trade is easy, I want to be in, and when it isn't I want to be out. In fact that is part of my general philosophy on trading: I want to catch the easy part. I never try to buy a bottom or sell a top. Even if you manage to pick the bottom, the market can end up sitting there for years and tying up your capital. You don't want to have a position before a move has started. Too many traders try and put their own opinion of what will happen before the market action. When I get hurt in the market, I get the hell out. It doesn't matter at all where the market is trading. I just get out, because I believe that once you're hurt in the market, your decisions are going to be far less objective than they are when you're doing well. If you stick around when the market is severely against you, sooner or later they are going to carry you out. I'll keep reducing my trading size as long as I'm losing... My money management techniques are extremely conservative. I never risk anything approaching the total amount of money in my account, let alone my total funds. You have to be more concerned about the moves you're in than the moves you're not in. You must get out of your losses immediately. It's not merely a matter of how much you can afford to risk on a given trade, but you also have to consider how many potential future winners you might miss because of the effect of the larger loss on your mental attitude and trading size. Nowadays, the breakouts that work look similar to the breakouts that are sucker plays. In fact, the false breakouts probably outnumber the valid signals. Every trader is going to have tons of winners and losers. You need to determine why the winners are winners and the losers are losers. The most important advice I have for traders is to never let a loser get out of hand.”

Tonight's topic will be on Money Management and Trading Activity. Trading Activity is a pretty vauge description. The details focus on controlling fear, greed & stress... how to cope with past, present & future... engaging in positive habits...and incorporating a end of day review.

See you tonight!

Posted by Option Addict on 8/23/2006 at 6:29 PM | Permalink