{"id":16325,"date":"2012-01-09T11:26:25","date_gmt":"2012-01-09T16:26:25","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=16325"},"modified":"2012-01-09T11:26:25","modified_gmt":"2012-01-09T16:26:25","slug":"is-it-time-to-quit-trading-part-ii","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/is-it-time-to-quit-trading-part-ii","title":{"rendered":"Is it time to quit trading? Part II"},"content":{"rendered":"<p>Over the weekend we started a discussion on Twitter and the SMB Blog about whether it was time to <a href=\"http:\/\/www.smbtraining.com\/blog\/is-it-time-to-quit-trading\">quit trading<\/a> for an experienced trader who had emailed me.\u00a0 He had had some past success. Then underperformed for a few years.\u00a0 Had recently started a family offering another important variable.\u00a0 We offered some thoughts via a blog: <a href=\"http:\/\/www.smbtraining.com\/blog\/is-it-time-to-quit-trading\">Is it time to quit trading?<\/a>. \u00a0 There was an unusually high response for this weekend blog.\u00a0 This trader is not alone in his thoughts. That trader responds to our blog below:<\/p>\n<blockquote><p>Bella,<\/p>\n<p>&#8230;&#8230;..\u00a0 Thank you for your  thoughts.\u00a0 It is a little unnerving to have such a personal situation  put on display for all to\u00a0see, but maybe there will\u00a0be at least one  other out there like me who can identify.<\/p>\n<p>You really\u00a0cut to the heart of the issue:\u00a0I failed to adapt to a  changing market.\u00a0 Not for a lack of trying, but the results clearly  point to the\u00a0fact that my types of trades were not profitable over the  course of many trades.\u00a0 Back\u00a0in my first few years I learned to do a lot  of fading.\u00a0 It was a strategy that I learned from my mentor.<\/p>\n<p>We would  fade with small size, trying to\u00a0&#8220;buy&#8221; information as to weakness or  strength.\u00a0 It was ok as long as you didn&#8217;t get stupid and double down.\u00a0  The strategy was it was ok to lose a little if it allowed me to &#8220;find&#8221;  the bottom or top (or near the top)&#8211;then after that panic moment was  in, we would load up on the way back up (or down).\u00a0 It was a risky way  to make money, but it\u00a0did instill a great skill for reading the tape  during spike moves.<\/p>\n<p>Also, you almost always knew right away\u00a0or within a  few moments whether you were right or wrong.\u00a0 This suited my trading  personality as holding positions was and has always been a weakness of  mine.\u00a0 Of course, I added my own sorts of plays to the ones I learned.\u00a0 I  did a lot of momentum trading\u00a0on shorting weak stocks.\u00a0 I would try to  find a level where I thought a stock would break, then have a position  to feel it out, and then help to blow out the level when it reached  there.\u00a0 But again, rather than holding for long periods I would begin to  piece out almost immediately.<\/p>\n<p>I always like to know whether I was right or wrong as quickly  as\u00a0possible.\u00a0\u00a0This is why\u00a0I have found it difficult to adapt.\u00a0 You guys  write about Trades2Hold so much, and it is something I would like to  implement, but have found the most difficult thing to do.\u00a0 It seems like  those sorts of scalp moves, where you know right\u00a0away, are less obvious  nowadays, though they still do occur.<\/p>\n<p>But let me provide an example:\u00a0I  was in BKS the other day, when it gapped down big time.\u00a0 After it held  the $9.50 level\u00a0off the open, I bought a few\u00a0hundred at\u00a0.60&#8230; then I  saw strength so I added and had, I think, 700 shares from $9.66.\u00a0 I sold  200 right in front of $10, just because it was a huge level that might  offer resistance.\u00a0 But then I looked at the longer term chart and\u00a0felt  like there was a good probability that there was a complete reversal off  the open developing.\u00a0 I thought there was a good chance it could  run\u00a0back up to $11 or maybe even $12.\u00a0 By the time I was thinking all of  this it had already run to $10.40s.<\/p>\n<p>To my credit, I set a stop order.\u00a0  This is something I have implemented to deter\u00a0me from &#8220;panicing&#8221; to  book profits that are disappearing on a pullback.\u00a0 At least now I just  pick the price.\u00a0 But instead of risking most\u00a0 or all of my profits and  setting the stop at $10, or even $9.66, or even $9.50, I set it around  $10.30.\u00a0 It\u00a0closed the day I believe $11.16 and never again touched  $10.\u00a0 Just 1 example\u00a0among many where I made a good trade, but failed to  properly exit out which would have\u00a0approximately doubled the profits on  the trade.<\/p>\n<p>But back to your blog.\u00a0 I most definitely cannot in good conscience  blame my kids for my downturn.\u00a0 Definitely there was more &#8220;distraction&#8221;  and pressure.\u00a0 But really, it wasn&#8217;t the pressure to perform.\u00a0 More, I  think (this is in hindsight, of course), the pressure contributed to\u00a0a  sense of panic when\u00a0the scratch months started to pile on top of one  another.\u00a0 This led to a lot of pressing, forced trades when there wasn&#8217;t  much there.\u00a0 Trying to make something out of nothing.<\/p>\n<p>Very often,  the\u00a0correct play is to do nothing, and wait.\u00a0 You are probably correct,  in that I should not have gone 3 years without making money.\u00a0 We are  most definitely not &#8220;independently wealthy&#8221;.\u00a0 Through this time I have  struggled with what I &#8220;should&#8221; or\u00a0&#8220;shouldn&#8217;t&#8221; do.\u00a0\u00a0What is correct from a  moral standpoint?\u00a0 Do I stick with it and give myself\u00a0as long as it  takes?\u00a0 Or do I flip burgers at McDonald&#8217;s?\u00a0 Is is selfish to believe in  myself? (redacted)<\/p>\n<p>I have a passion for trading.\u00a0 This, I never lost,  despite my frustration.\u00a0 I really couldn&#8217;t care less about the money.\u00a0  To me, it is only a way to keep score.\u00a0 A completely objective tally  that doesn&#8217;t lie.\u00a0 This is what makes struggling so difficult  to\u00a0rebound\u00a0from&#8211;I have a very Darwinian view of the marketplace.\u00a0 Those  who fail to adapt, die.\u00a0 And rightfully so.\u00a0 They are dinosaurs.<\/p>\n<p>My mentor blew out his account in 08 (redacted).\u00a0 He quit and moved back home.\u00a0 I&#8217;m sure there  are a bunch like him.\u00a0 But I adapted enough not to go extinct, but  neither am I thriving.\u00a0 I&#8217;m in some no-man&#8217;s land in between that is  untenable.\u00a0 But it is what it is and I am where I am.\u00a0 I can only look  forward now.<\/p>\n<p>I liked how you defined &#8220;skills&#8221; as a skill to be successful.\u00a0 I really  thought you would start talking about trading smaller, or tighter stops,  or tape reading, or some such &#8220;skill&#8221;.\u00a0 That is part of it.\u00a0 But you  are right.\u00a0 To be successful entails rising above whatever tape is  thrown\u00a0at you.\u00a0 It may not be what you expect, but in the end you have  green on the screen.\u00a0 Adaptability is the key to this.\u00a0 Consistency and  profitability will necessarily follow.<\/p>\n<p>So what do I need to do, you ask?\u00a0 I need to get back to basic  fundamentals.\u00a0 Setting up good trades that offer decent risk-reward  ratios.\u00a0 I need to stop thinking about the past and take it one day at a  time, one trade at a time.\u00a0 I need to work harder at my development of  trading ideas.\u00a0 More of my time could be spent analyzing charts and  setting alerts, identifying levels that might necessitate a trade.\u00a0 I  need to be more patient, staying with ideas and trades that are  working.\u00a0 I need to implement Trades2Hold.<\/p>\n<p>When I interviewed with  Steve Spencer, I asked how do I get over the feelings of discomfort,  watching your &#8220;profits&#8221; slip away?\u00a0 He said you have to develop the  skill, and to start by just holding 100 shares.\u00a0 This I will do because  the upside of learning the skill outweighs any paper profits I am  protecting.\u00a0 I need to can the lapses in discipline, which usually stem  from a lack of patience, or pressing trades that aren&#8217;t there.\u00a0 But most  importantly, I must believe in myself that I can do it.\u00a0 I need to  scratch and claw and get myself back up off the mat.\u00a0 It&#8217;s that simple:  get back to basics.\u00a0 Just MAKE ONE GOOD TRADE&#8230; and then ONE GOOD  TRADE&#8230;.\u00a0and then ONE GOOD TRADE, etc., right?<\/p>\n<p>I am sorry for writing so much.\u00a0 This probably exceeds my original  e-mail.\u00a0 But, believe me, I have thought a LOT about all of these  issues.\u00a0 Thank you for taking the time to reply and blog about me.\u00a0 I  appreciate your insights and thoughts.<\/p><\/blockquote>\n<p>Thoughts?<\/p>\n<p>Bella<\/p>\n<p><a href=\"http:\/\/www.amazon.com\/gp\/product\/0470529407\/ref=s9_simh_gw_p14_d17_g14_i1?pf_rd_m=ATVPDKIKX0DER&amp;pf_rd_s=center-3&amp;pf_rd_r=0EE8HJ15G50QH1EZAS42&amp;pf_rd_t=101&amp;pf_rd_p=470938811&amp;pf_rd_i=507846\">One Good Trade<\/a><br \/>\n<a href=\"http:\/\/twitter.com\/smbcapital\"><img decoding=\"async\" src=\"http:\/\/twitter-badges.s3.amazonaws.com\/follow_me-c.png\" alt=\"\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the weekend we started a discussion on Twitter and the SMB Blog about whether it was time to quit trading for an experienced trader who had emailed me.\u00a0 He had had some past success. Then underperformed for a few years.\u00a0 Had recently started a family offering another important variable.\u00a0 We offered some thoughts via a blog: Is it time &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/is-it-time-to-quit-trading-part-ii\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[30,1985,1828,1193,653,1354],"class_list":["post-16325","post","type-post","status-publish","format-standard","hentry","category-mike-bellafiore-bellas-blogs","tag-prop-trading","tag-quit-trading","tag-smbu","tag-trader-education","tag-trader-training","tag-trading-coach","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is it time to quit trading? Part II | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/is-it-time-to-quit-trading-part-ii\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is it time to quit trading? Part II | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Over the weekend we started a discussion on Twitter and the SMB Blog about whether it was time to quit trading for an experienced trader who had emailed me.\u00a0 He had had some past success. Then underperformed for a few years.\u00a0 Had recently started a family offering another important variable.\u00a0 We offered some thoughts via a blog: Is it time ... 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