Old wine in a new bottle
Greetings from old bones! I've been a lurker for some time but no posts. I've made money in most of the markets like stocks, commodities, and mutual funds. Problem is I've always lost a little more than I made. I never blew out any of my accounts completely, but I always managed to knock a big enough hole in them that I let them go dormant for long periods...or cashed them out to buy new cars or pay bills.
I'm retired IBEW electrician and spent 5 or 6 years as a property claims adjuster absorbing information about real estate planning to flip houses for cash as I retired. Over the decades as an entrepreneur I've seen old money lead the new risk takers into building businesses on their money, only to call the notes due every so often via money manipulation. Anyway, I learned for a grandson of a share cropper, that borrowing money was a good way to make the rich richer.
So my plan was to educate myself in all the ways of flipping and use my own money to withstand any changes in monetary policy.
Next problem was, shortly after retirement, I started making offers and getting familiar with my market area. The prices (2 years ago) went up faster than I could get my bids in. Then they were a little too high for me to pay cash and have enough left to remodel.
I had to either borrow money...or buy less than desirable houses. Though not yet a stock trader, I understood the importance of following rules. I spent about 6 months depressed over my busted life plan.
Then one day, I decided I would study everything about the markets and learn how to make that work. I'd already read several books and paid for my share of courses, so I knew some things...just not enough to make money.
I read everything, got a paper trade account with my broker td ameritrade and just let my cash rot in the bank at 1/2% interest. I cashed in some loser stocks and left the little money in my brokerage account gather dust.
I know this is getting long, but no one has to read it, and I hope I don't have to talk about myself much after this is done.
I paper traded all sorts of set-ups and just as before lost a few dollars more than I made....like 95% of traders who steadily make the rich richer.
I read a book by Van K. Tharp called "Super Trader" and I started listing my beliefs, evaluating them, getting rid of the bad ones and anchoring the good ones. I wrote out a business plan for trading, and I established a set of rubber rules. I say rubber because I changed them and adapted them trying to make my losing set up work.
With $100,000 paper account, I managed to lose $40,000. Some say there is no emotional loss in a paper account, but that depends on how much you want to learn. My nest egg was losing purchase power while I learned, so each paper loss was a swat at my fragile nest egg. I would get so excited as I learned a new set up. It would win a few and lose a few more, but I thought I'd get better. I didn't. I kept records and my trades were consistent with almost every technical setup I used. After all my Holy Grail systems failed. I read everything about CAMSLIM investing including Dow and Darvas who came before William O'Neil
I started to win a little. I discovered a smooth trending chart that was sort of my own idea, and when I traded these early in base stages, I'd make money. I made all the $40,000 back in a few months, then with a paper account $400 larger than when I started, I went back to live trading about the middle of January. In a couple of months my live account was up over 30%, but the market was getting choppy with eight distribution days, Dow transportation leading or almost leading the Dow Industrial in down movements. Commodities seemed to struggle, service business seemed to struggle, and transportation began to slow a little. Companies were skittish about the effect of a strong dollar....and after a down day, I cashed in my winnings waiting for a better market.
I had learned to make money in an uptrend, but I had no proven setups for choppy markets. I suppose I could play a downtrend, but undecided was killing me. I needed some new methods. That's why I am here in this forum, hoping to find exactly what I need. I went all cash at about 124% of my 1st of the year account balance.