Is Education Important to Your Success
by Cliff Clark
Many times when people embark on a new endeavor they become so excited about the bigger picture that they forget about the smaller details. Trading is a very challenging and demanding business. However, many people think it simply involves waking up 30 minutes before the market opens, and and ends when the market closes. How nice would that be? In reality, it’s not that easy, especially when starting out.
As in most other industries, there is a steep learning curve. You simply can’t show up in your pajamas at 9 am every morning, trade until 4pm and expect to become an expert. Hard work, discipline and education are all necessary to becoming a great trader. Sadly though, most people are not prepared for this journey because they under estimate the time and effort it will take to become successful, and they don’t allocate enough resources for education. An unrealistic timetable and lack of a proper education are sure fire ways to join the ranks of failed traders.
Trading is no different than an other industry. To become successful, it is extremely important to be realistic and objective about your approach. Too often people come to a trading with illusions of grandeur and impractical expectations. The tools necessary to become successful are available, but most people don’t take advantage of these services until after they have learned the hard way. By then for many it’s too late.
We’ve heard all the excuses. "I’ll get the education after I make money." "I just can’t afford it right now." or "I don’t need the courses. I’ve read such and such a book." Some people may look at those comments as being foolish, but there are a surprising number of folks who believe them. Having resisted education when I first started trading, I can honestly tell you that education is the only way to succeed in any industry, and trading is no different. To not obtain or put off education is an enormous mistake that you will only understand after the market has taken your hard earned money. Do yourself a favor and get the proper education before you end up paying the markets for it!
Remember my article on creating a business plan? Make sure yours has a section for education and the cost of that education. When you've obtained an education you will wonder how you ever traded without one! By investing in the future of your business through education, you are really investing in yourself!
2 trades for me today with +1.5R total
1st Trade QCOM +2R
148.39/149.97 exit 143.25
12% gap down under pivot support and 50ma after a strong daily double top rejection,. I took it on a congestion breakdown with a fairly wide stop, leaving my 2R target 50c over its ATR, slow but consistent move down with great RW, hit my target on the penny before it bounced.
2nd Trade AQB -0.5R
9.40/9.70 exit 9.56
I rarely trade stocks under $10 and even more rarely short them. I liked this daily chart as it broke its uptrend channel and stayed under a strong 9.50 support line enough room to its daily 50ma. I entered after a pullback with a fairly wide stop but only 1/3 of its ATR used at the time. It failed to break down with the strong market open and stayed in a narrow range.
I actually broke my plan with this trade as I lowered my stop to a pivot where price made a big bounce earlier at 11am with a large seller sitting there. My thought was that if it breaks that level again then it will likely...
1 trade for (-1R)
I took a BD on QCOM. I was worried about the target being close to the daily range, so I took a tighter stop on the 2 min chart. I am looking through PTS right now, most of the examples have 2 options for where to put your stop. It looks to me like one of the stops would be at the bottom of the main consolidation area, and the other at the bottom of where there has been a shakeout or turnaround bar (if there has been one). Due to the daily range I took the tighter one on this. In hindsight it seems obvious to take the wider stop, but in the moment it looked ok.
I was then looking at the 15 min 3BP on QCOM, but the reason I used a tighter stop in the first place was because of the range. The 15 min 3BP would have needed to have gone even further than the wider stop on the 2 min BD, so I didn't take it.
