Octorber 1st

By request of Trader M:  A couple of things I learned (needed the learn) from trading.

Trading can be profitable and at times it is not - it is very difficult to keep mood swings unaligned with your account balance. We think the world of ourselves after a record month - are close to depression when we get hit. My method for personal balance are not perfect - studying the subject, actively monitoring once mind and be active outside trading are part of the answers. I highly recommend the books of Brett Steenbarger for more on this subject.

Trading is a highly skilled profession - it does not come to you just by reading a book or by following a coarse. Tiger Woods is a great example as how to hold yourself as self employed professional - continuous efforts to improve his skills - not afraid mid career to change his back swing. Always on the practice greens. It is easy to translate this into trading, it is not easy to really live by this level of commitment.

As for a balance portfolio more and more I think a balance portfolio should hold several trading and investment styles. With a flexible method to allocate money between the styles.
I would distinguish between two trading style and two investment methods.

Trading Styles:
Trend Following (check the Turtle books)
Non directional (www.sheridanmentoring.com)

Investment Styles:
Growth (IBD)
Value

If we had applied this the last couple of months we would have had a successful EUR/USD trade. We had ride the downtrend in the market. Our screens on Growth investing had come up dry and our Value investing screen would be starting to fill. Non-directional trading would have given losses - but easily compensated by the other styles.

I am convinced that all these four methods need their own level of proficiency - each again with a cycle of learning, starting small and building it up.

And as we are all strugling with non - directional trading in Q3 let's not forget that while the world is end outside of our trading room - it is not the end of the world for us. Controle the losses, keep your powder dry - and hope the USA market starts to resemble the Japanese market for the next decade :) That would be a perfect non directional set up.