Sunday, February 25, 2007

Tales of Emails

No real names have been used in this post to protect privacy of Members

I'd like to go through few email I have received lately and answer publicly
Members' names stated as "X", "Y" and so on, my replies marked as "D"

Email from "X"
"X": "Dear David
Thank you very much for your ideas, they save me a lot of time in doing my home work"
D: too bad you cutting down on your homework

"X" : I was able to make $500 in one week"
"D": - that does not ell me anything, but congrats

"X" - first I bought "stock #1" for $2,000 - made $70,
then I bought "stock #2" for $5,000 - made $130, then I bought "stock #3" for $3,000 - broke even" and so on...
"D" - congrats on not going broke faster than you will - and you WILL go broke, don't blame me, I regret to inform that your membership will NOT be renewed

Email from "Y"
"Y" - I've been watching your picks and when I became comfortable I bought "stock #1", but it has not been performing at all, so I am still holding that stock #1 and waiting with next purchase...
"D" - I regret to inform that your membership will NOT be renewed

Email from "W"
Dear David, I've been using you ideas for few months now, many of them works quite nicely, one thing I disagree is that you recommend to "keep at least 2/3 of profit" therefore you cutting opportunities to make more money on a stock. As an example look at "stock #5"
"D" - dear "W", sorry it took a while to answer you, I've been swamped by emails and membership requests lately, my apologies it took 4 days to answer. I hope you don't need my answer anymore, because "stock #5" after running up +17% in 3 days and correcting to the +12% after that ( it had to be sold to keep +12% profit), after second leg up to total profit of +15% collapsed and sitting at the loss of -24% to initial "trigger price", so instead of making +12% you lost -24%. ( I hope you sold it at -8% according to the "RULES")
I regret to inform that your membership will NOT be renewed.

This list might go on and on,
let me try to answer most of "reinventing the wheel emails at once:
My "system" ( it is NOT MY system, it is common sense and methods used by many successful trader over extended period of time) calls for "DISCIPLINE", it is a "percentage game", it is "minimize losses" - "maximize gains", it is risk control, it is "DO NOT BE A HERO" approach, it is NOT "get rich overnight" approach.
Let me stress cornerstone rules for the way I trade ( which a lot of "me too traders" pressed for time never bothered to read in the different "educational posts" I spend my time on for "my own pleasure"

1. No "dollar" talk, "%" ONLY
2. Equal positions sizes
3. Multiple simultaneous positions
4. Risk control - never risk more than 2% of TPV (total portfolio value) on one trade,
never ever risk more than 7-8% single position
5. Never let "profit trade" to become "losing trade"
6. Sell laggards
7. do you own homework!
and on and on and on...
8. NEVER use more than 20% of margin - preferably 0%

Here is what I am starting to do beginning today in respect to "accepting new members"
When requesting membership - send me email "quiz" type listing of my rules - I need to know if you will not get hurt using my ideas. ( Even tho "legal disclaimer" states that anything I post is a complete BS for "entertainment purposes" - I still don't like to see people lose money)

It is too bad that most of "I want to get rich fast" new traders started to trade ( not even speaking of 1987 crash) after 2000 prolonged severe bear market.

These "traders" WILL loose more money than they made - don't blame anyone other than yourselves.