Wednesday, September 20, 2006

Coaching Call Week 13

Now that we've completed the formal training manual, I get to pick Rob's brain and get some feedback on my trades. After a great deal of diligence on my part to get better stocks into my watchlists, I found some decent swing setups and opened a couple trades. Rob and I looked at how I entered a long position on T earlier that day. I was complimented on this being a nice swing entry and there wasn't much more to say about it. Likewise, I had entered a short position on ROK on Monday. This was a classic swing entry and was developing nicely. Once again I was complimented on my entry and we spent only a moment talking about managing this trade. I just followed the rules and this was a far better week of trades. You learn much more from your mistakes, so we went on to talk about other things.

Rob primarily trades Options and he wanted to talk a little about how options work and the Reward:Risk ratio that option trading involves. With Options, you're talking higher leverage trades and timing is even more critical. You can lose 20% or gain 80% (or more). Does that sound like a reasonable Reward:Risk? Sure does. Eventually I'm certain to trade options including spread trading (especially the strategies taught in the Trading PIT classes), but not until I have achieved a mastery of stock trading first. Rob's thinking behind this is that I'll benefit most from actually mastering on trading system in the realm of stocks. A master of one rather than being so-so with many. I'm quite new to trading and his guidance has helped me stay on track and given me some feedback that has been very useful in developing the discipline of being a trader. I think this approach is a great way to go about learning this profession.

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