Though I have not done this for long, I must say, I am learning some of these lessons quite quickly thanks in part to your website and other teachers out there like Gross, Du Toit et. al. I would like to say, that sometimes it is better not to be fully invested. In other words, don’t take a position just because you need to make creative use of your trading account to further your profits.

The current market has high levels of schizophrenic behaviour due to policy makers giving us contradictory information and corporate CEOs covering their abysmal earnings. One day, Big B says things are OK, dollar is rallying like mad, and the next day, things are all over the place because Nikkei has gone down the toilet by 500 points because Japanese officials are not enthusiastic about the dismal future ahead, and yet another day, some idiot Analyst comes on a TV show (hint hint) and says that “US Banking is in a generally strong position.” – you see the picture I am trying to paint here?

I have gone from a point of targetting a set amount of pips to “take whatever I get reasonably” mode. For example, just two days ago I had an opportunity to place a very nice trade at (almost) bottom of the median grid for AUD/USD around 0.9090. Instead of pulling the usual leverage of ~5:1, I kept it at a measly 2:1. On Friday during the Asian session, the position was up by 84 pips and I just pulled the trigger button to close all the lots. During the European and US session crossover, the Aud/Usd went even higher to 0.92 levels but I didn’t bother entering the market again, because (a) Fridays are just bad days for entering trades so far from my experience (b) I am in “once bitten twice shy mode” and (c) market sentiment seems to gyrate very quickly to the downside on even a slither of bad news.

I am sure some of these are just beginner problems but as I said, one key lesson I’ve learnt is that I would rather spend the weekend or a week knowing my account is safe and I can just relax. I would like to call them trading holidays and when I get even more serious with my account I intend to take them. One should just hold back their account if they think market conditions are looking VERY choppy and/or if they are mentally drained. Seems like obvious ramble, but it’s funny how many times it can be ignored if not taken seriously.

Wish you good luck for next month and trip to Ireland. If you plan to come to UK give me a shout, will take you for some pints.

Snake (you-know-who).

I used to trade stocks and options from 1999 thru 2004. I had 4 brokers. Two at Morgan Stanley (Chuck and Dick) and two down in Atlanta Georgia (Jim and Andy). I used Jim and Andy the for real creative option and index trading and Chuck and Dick for long or short stock and straight option tactics. In March of 2003 during horrendous drawdowns of his clients accounts in a bear of a bear market Dick unfortunately had had enough. He went home on a Friday and Saturday morning took his life with a shotgun in his bedroom. He left behind a wife and a one year old daughter. Just two weeks later the market turned up and started on the run to 15,000. I am not implying at all that you had any thoughts of that. I wanted only to illustrate how far it can go at times.

What I am getting at is back off, regroup, watch a very few chosen or maybe one currency pair and get the mind set back to proper operating condition. There is a reason why people have jumped out of windows during bad markets. No person is supposed to be in race to see who can do the most. Us guys are single task oriented,the women love to hear us admit this! That is how we are wired in the brain. As a matter of fact my brother just went into pullback mode from the stock market. Too much volatilty and bad judgement on his part. I told him to walk away for a while but keep in tune with only watching the market untill he gets it together again.

Hey, put the fun back into this. If it is no fun anymore then it is time to fold. I think you still want to have fun doing this. Maybe keep trading tactics simple. I plan on that, takes alot of stress away. We all know what stress does to use. It takes the smile and turns it into a frown. Now go and have some fun….I am….

Talk later,
Randy