After watching One Million Trader - BBC.

I consider my current trading profile would be more worst than the first out trader - (the retired IT Engineer: Simon). At least the retired IT Engineer: Simon is one of the contestants from many people…..

From my analysis, I believe Simon's over confident leading to his failure. His over confidence probability due to his mind-set: “30 years plus experience for resolving engineering problem mean that he could also resolve trading / market problem using similar approach”. I also think in same way before watching the video. Now, I must tune my attitude too.

God bless BBC giving me such good video for avoiding similar mistake in early stage.

In the post-interview, Simon remarked that MARKET behaves completely different from his previous working environment…… His early thinking – trading problem was just like IT debugging, if a bug identified in his trading strategy, he will debug his strategy step-by-step, then he believe the plan will finally works. In fact he admitted that even after 3 or 4 time debugging process, his trade strategy still not working (the highest capital lose in the team).

(i.e. trading is dynamic problem, which change from time-to-time, not as a static environment / closed system like most engineering problem).

To be one of the 3% population of the trading community. (97% are lossers - not vertify yet).

It is easier said than done! Trading is much difficult to manage than Roulette Table.

Two points I heard before, but now have deeper appreciation of their importance.

(1) John Nash’s games theory in trading environment.

(2) Steven Achelis – we are not dealing with pure logical entity in trading world.

Technical Analysis from A to Z - Achelis....

Mechanical trading systems can help us remove our emotions from our decisions. Computer testing is also useful to determine what has happened historically under various conditions and to help us optimize our trading techniques. Yet since we are analyzing a less than logical subject (human emotions and expectations), we must be careful that our mechanical systems don't mislead us into thinking that we are analyzing a logical entity.

Mechanical trading systems can help us remove our emotions from our decisions. Computer testing is also useful to determine what has happened historically under various conditions and to help us optimize our trading techniques. Yet since we are analyzing a less than logical subject (human emotions and expectations), we must be careful that our mechanical systems don't mislead us into thinking that we are analyzing a logical entity.

BH2007

2013-02-25

Hi BH2007, [:D]

1). Bankroll? Although I never heard of anybody doing it, do you know you can learn to trade and pay $0 for lessons?
Although I heard of such very rare persons, but I never met one, do you know that you need $0 to trade?
All these require special human qualities inexistent in most people.

2). Knowledge of the game?
I met many millionaires who have been to school only 3, 6, or 8 years and quit while still teenagers. They had no knowledge of anything, but their nose was good at smelling where big dollars hide ...
Aapart from being honest, working hard and getting up early in the morning, more is required to hit gold.

3). The best money & wealth management is not to spend it outside the markets. All your profits should go back into the markets, not to women, wives, children, luxuries, etc.
Most private traders can NEVER grow rich because of their familial environment, which is strange because they help a family which does not help them grow professionally ...

4). Discipline.
It is very difficult for a newcomer to trading to be disciplined because discipline in his previous profession did not pay off. You can do everything nice and well in your contracting job, but there is always someone to put you down in construction business. How can you become disciplined if you are bitter about it?

5). Game theory?
Yes, it will help you ONLY WHEN you have US$5M trading capital with the broker and US$5M savings in the Bank.
What game are you in at this moment to justify applying game theory? [:P]
Please do not tell me because I do not want to hear. [:@]

6). You have to train your mind to success. How? With the little step of learning MS User Manual fast and well. After three months you will feel good about finishing studying it in time. Then a few other things will follow BASED on your success with the User Manual.

7). Trader groups, seminars, etc. in Hong Kong.
This is a must, but to go there you must speak some technical analysis language first.
You do not know how much I wish I could visit HK especially in summer. [ap] I've never been there. [:S]
Maybe I'll come there at a money show one day ... [:O][A]

8). Yes, we do not analyze a logical entity. All we need to analyze if whether what we see has profits coming for us. You must never be sad when you lose $$$ or happy when you gain $$$. This is hard to do.

I'll come back here this weekend for you to discover the most important quality in the stock markets. [:O]

Hi BH2007, [:)]

How are you keeping?

You can work around deducting the cost of borrowing for bearish trades as follows:

In Enhanced System Tester, start New Simulation, Select Systems, next, Select Securities, next, in System Testing Options click on More …, click on Trade Execution, under Slippage select Percentage, Sell Short 4%, Buy to Cover 4%.

You may add a bit more for treasurer bill rate, margin interest and yes, slippage too.

You will get an approximation to think about if you still want to play the bearish side. [:O]

Keep in mind that the money & risk management features in Metastock are just an introduction to specialized portfolio management software which you can buy on the Net or have it done specifically for you if you are going to manage serious capital.

Re your BRK-B shares: you should have bought on Nov. 16, 2012 and held all the way up until today. There was no real major technical analysis reason for you to have sold your entire stake until now, and you could have bought more shares several times since then, but you could sell your entire stake this coming Monday, and switch to something more serious for beginner traders.