WAX ON –WAX OFF



 

Piano Concerto

 

Humor is the oil of alliance
Paul Privitera

I thought this would be a good time to write about my battlefield tour when it comes to the stock market, as well as the stories of a few colleagues closest to me at the time. As you probably know from your own experience it often was a rocky and wild ride as I struggled to smooth out the nuances that would always seem to hijack my success.  Mr. Miyagi (Pat Morita) had it right, protecting yourself from attack, or losses in our case, is the first thing you need to master. Secondly, wait for the right opportunity — stay away from the fear ridden gutter of over trading, remembering that the smaller your account size, the less opportunities there will be. Third, have enough money in your account as well as good cash flow before starting. Trading with scare money doesn’t work!  Realizing these simple concepts will take you a long way.

Easier said than done, not to wear out an axiom. I had begun my journey after receiving a little inheritance during a long spell of unemployment and subsequent financial stress. I would imagine that many people seek to learn these skills during similar times, which is why so many go astray, mostly borne of desperation. In addition, my own ego and the fear of failure always permeated my decisions. Only when I began to let go, close out positions that had no promise, break out of the need to be right and become open to my own limits and ignorance as well as the limits of the craft did I begin to make some progress —and slow progress it was. I’ll always esteem those at the top of this field.

I once refused to close out an upside down (in the money) Calendar spread by continuing to roll it forward to the tune of losses exceeding 50% of my trading capital. Sounds ridiculous I know, but my greed and ego got in the way without even realizing it.  A trading colleague of mine lost almost 80% of their account by letting the “profits” from Iron Condor spreads go unchecked.
Anyway, enough of the sad stories. I offer here, from the trenches of experience —




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