Currently I'm trading with about a 1k account. What you begin to realize as a trader is that this isn't gambling and this is not like the casinos. If you ever been to the Casino, what you realize very quickly is that if you put your hard earned money and bet it long enough you will lose. Casino's are meant to take your money. The system is made to where the longer you play the more you will eventually lose. Have you ever heard the old saying, "the house always wins." I like to bring this analogy with trading because many young traders as well as the mass public see trading as gambling and extremely risky. In many respects it is and can be very dangerous if you do not know what you are doing. The great thing about trading is that "the market doesn't always win." Different from gambling at casinos, with trading you can essentially in almost all trades get out whenever you would like, while with gambling you are risking everything on one hand of black jack banking on 50-50 odds or if youre really good 60-40 odds. The great thing about trading is the odds can be in your favor if you play your cards right... no pun intended. you can calculate your risk and reward to be 3-1,5-1, even 10-1 based on basic analysis. Look I know what its like to win and lose at a casino. As a naïve recent high school graduate some time ago, I went into the casino with all my graduation money that I recently acquired. And within a couple hours I was up, down and eventually out of all my money within the day. I learned a valuable lesson, and that is to not allow my money to be left so much to chance but rather to predictable patterns and strong analysis. The great thing about trading and the market is that it can be predictable if you do your proper due diligence. I title this blog post today,"Luck Runs out in this Game," because recently with the small account I have I have gotten lucky. Today I traded $ANY and I entered mid day at .343 while it was channel surfing. I was expecting it to bounce back to the .40s  because it was there before and it ought to go back right? Wrong. A stock doesn't have to do anything. I bring up my trade today because I basically put my entire account into the trade believing my naïve assumption would be confirmed. The problem is that the night before I went out till 2am with my buddies, and did no research for plays coming the next day and I am on the west coast so you have to realize I was waking up a 6am for market open. The crazy thing is that I just looked at Tim's watchlist and from there looked for morning panic dip opportunity's and morning spike plays. The problem is that this morning was a great opportunity to make a LOT of money. And foolish me went out and didn't prepare properly for the beautiful plays to come. I blindly dip bought $ANY thinking it may go up, knowing it's a victim of the January effect and may bounce to the .40s+. What you begin to realize is that in this game,"if you don't plan, things usually don't go as planned." My .343 entry got me stressing all day as volume faded and I ended up holding for about 3 and a half hours before finally get stopped out on my limit of .36. As many of you many not know it topped at about.37 today after the morning panic and closed at .33. Do you see why I got lucky today? The lesson learned is that without preparation don't expect success. period. You will fail over the long-run. The only reason I was able to make about 5% here today is because luck was nice enough to grant it to me. Do not make this same mistake because it will cost you. Luck has an expiration date and it is sooner than you think. Don't let your hard earned money be left to chance, because chance wants to take it sooner or later.

 

Thanks,

 

Max