10/21/2009

Who Are You



So far out of 377 posts one has proven popular.

That means the probability of this one being good is 0.26525%.

On the other hand, I'm due.

The "popular" post listed the reason why you should not be a trader.

Perhaps a more positive spin would be to list what a trader is.

A professional trader is a risk manager.

A trader manages risk, all day, every day.

A trader identifies opportunities and exploits them.

A trader only trades when his risk parameters have been met.

A trader does not take all the possible moves in the market place.

A trader misses opportunities in order to preserve capital.

A trader will limit their upside in order to limit their downside.

A trader knows that capital preservation is the first rule of each and every day.

A trader takes a fixed number / percentage of risk opportunities per day / week / month / year.

A trader does not exceed these limits.

A trader only increases these limits as their capital grows.

A trader decreases these limits if their capital shrinks.

A trader is someone who never stops learning, never stops questioning, and never grows over confident.

A trader provides liquidity and price discovery to the market place.

A trader predetermines how much money they can lose in a day.

A trader is a risk manager.

I trade the CME Group's New York Mercantile Exchange electronic crude oil futures contract.

I use Interactive Brokers for data and to clear my trades, Sierra Charts to display the last price in a visually attractive manner, and Bracket Trader to place my order, break even, stop, and target with Interactive Brokers.

I wait until the bids and asks move price into my predefined trend before I place my order.

This is what I do.

My name is Solfest and I am a trader.

10 comments:

daytrader233 said...

Copy.
Paste.
Print.
Hole punch.
Notebook.

Adam Berkowitz said...

great post...

mvw said...

Wonderful, Solfest. You pretty much summed up everything I had to learn the hard way. I particularly identify with these:

A trader does not take all the possible moves in the market place.

A trader misses opportunities in order to preserve capital.

A trader only increases these limits as their capital grows.

A trader decreases these limits if their capital shrinks.

Solfest said...

Thanks guys, now if I could just fix those 376 loser posts. :)

longandwrong said...

The break has done you good, thought-provoking stuff.

If I might be bold enough to suggest a useful addition (that was in an English accent)...

A trader understands that $0 when highly leveraged is still $0. Avoiding this situation is the first rule.

Solfest said...

Jolly good old chap.

FX said...

I was reading your post and in one second there in front of me was sentence "I use Interactive Brokers to clear my mind" and I said WHAT? Then I reread it. But I'm now laughing as much as I would if you actually wrote it. I don't know maybe the problem is in this decaffeinated coffee that I'm having hour before midnight.

Solfest said...

FX you trade FX, r i g h t.

Another in a long line of fine young men driven mad by the four decimal points.

Sad really.

thelonelytrader.wordpress.com said...

If you trade on an interbank feed, then it's f i v e decimal points. Or should that be: f i v e , 0 ???

I'm confused.

Anyway, good post. Even though you want nothing to do with it, I'm inviting you to the blog anyway.

Solfest said...

Five decimal points!!

Do calculators even go that far?

:)

Remember me when you hit the cover of Fortune.