[Livermore]

Originally posted by bobnat
Some really great stories here. I'd like to add a couple of things, if I may.

Pete is spot on when he says the entry is the easiest part of trading, yet newbies spend all their time on looking for the perfect entry system. They don't realize that a system consists of much more than the entry itself.

There have been guys like Lucas and LeBeau who have traded by flipping a coin for there entries and made money just to prove how inconsequential the entry truly is.

Finally, the biggest problem I've seen throughout this post is that so many peope are risking insane amounts on a single trade. NO SINGLE trade should ever hurt your capital, EVER. If you risk 5% or more, you're asking for trouble and bankruptcy. If you risk just 1% per trade, then it just doesn't matter if that trade loses. This eliminates all the emotions from the process and allows you to stick to your plan, as Pete and others have constantly pointed out.

If you have built a proper system, then you should know what your probability rate is, as well as your reward to risk ratio. You could run into a massive losing streak (according to your system) and still be in the game when it ends if you only risk 1%. But if you're putting 5% out there and hit 15 losers in a row, you're out of the game. Yes, it's slower going by only risking 1%, but it results in constant forward progress, which is not what most of you seem to be experiencing.

Finally, if you don't know what constitutes a system, then I suggest you put ALL of your time and energy into finding out what does. Then put ALL of your time and energy into building your own. Remember, there isn't anything new under the sun. We all borrow from each other. It's ok to look at a number of systems out there, but as someone mentioned above, you've got to understand what makes them work. Once you do, you can put together your own system by taking something from here, something from there, etc. The key is to have ownership of your system. You'll never have that by using what someone on a forum told you to use. Without ownership, there is no understanding. Without understanding, there is no confidence in the system. Without confidence, there is no consistency. The end result is no profit.

Thinking is all about you, not about your system.

Bob

OK, so what is your system?