Getting Started in Tradingtime. The best way to take advantage of this dynamic is through
the use of trailing stops that are either based upon key chart levels,
equity, or volatility. This is the way that Paul Willette trades. He
will harvest profits on a small portion of his position right away
and move his stop to break even to make sure this trade remains
profitable. Then he will continue to trail his stop to capture any
further gains.
- Trade to Your Personality
Do you like to fish in a secluded lake or ski down a black diamond
slope? How you answer that question could determine the way you
should trade. Fishing is a slow, solitary activity fraught with many
unsuccessful attempts at snagging a catch. It requires discipline,
patience, and the ability to remain focused on a single task for long
periods of time. Downhill skiing, on the other hand, is a sport of
speed and quick reactions. The ride down the mountain may be
fast but it requires thousands of split-second decisions to navigate
safely to the bottom without tumbling into a snow bank. In short,
fishermen typically make good long-term traders as they patiently
wait to squeeze every point out of the trend. Skiers, on the other
hand, tend to be much better short-term traders who are good at
scalping a few points at a time. Are there exceptions to the rule?
Of course, there many trend trading skiers and scalping fishermen.
Our point isn’t really about skiing or fishing, but rather about
knowing your strengths.
As adults, our personalities are essentially set in stone. The
saying that you can’t teach an old dog new tricks was practically
invented for trading. It is very difficult to radically change your
personality to accommodate a particular trading style.
As you have seen from reading the interviews in our book, you
can be successful trading any product, timeframe, and methodol-
ogy. We are all different, and the key to trading success does not
depend on a particular timeframe or a specific indicator, but rather
on making sure that the timeframe you pick is one that fits your
personality. People who need instant gratification are probably
not cut out for long-term trading and may find their best success