The Mechanical Trader: Prologue

I am by no means an expert trader yet, it's something of a work-in-progress. I have some personal demons, conflicts, perceptions, misconceptions, emotions that I still have to deal with so I'm betting on a long position. Heh.

I'm currently reading a book entitled, The Way of the Turtle. It's a book I picked up somewhere. I'm a bookworm, as I would affectionately call myself. To others, it's probably and simply called, 'n-e-r-d'. I don't mind. I still have tons of reading materials to go through. Bill Gates is a nerd. A rich nerd. Nerds are in good company, yes? Take Warren Buffet, does he look like a jock to you?

The trading war you wage in the stock market is an alchemy of intellect, gut feel, and experience. Experience is the best among the three, however, it's still the most expensive. Since I have experience trading our market, albeit short compared to others, I've devoted myself to this thing called "continuous education".

I do my "continuous education" when there is nothing to trade. I still believe that everyday is an opportunity to make money. Proof of it was Monday. Those who had guts bought GEO at 2.30. PA at 0.18. Then sold on the same day for an 8% profit. Not bad for a day when the market closed down triple digits. I know this because I saw it with my own eyes. But me, well, I was more of on the safer side.

So far, I've read chapter 1 of the book. Honestly, I did not understand a thing. This is due mostly to the fact that the author, Curtis Faith, was talking primarily about futures contracts, something I have nil knowledge of. However, when chapter 2 came, I can tell you, that this is so far the most important and often quoted factor in trading FAILURE - human emotion.

I have a degree in Psychology. We humans have stereotypes, beliefs, and attitudes about everything. These are STUBBORN in nature and can be a blessing or a curse. In trading, it's most usually a curse.

I can go on and on and on like the Energizer Bunny about this so I'll keep it short. If you are of a trader's bent when it comes to the stock market (as opposed to being an investor), you have to be devoid of emotion. It is hard and near impossible. But as I read through the book, I'll share with you my take on the subject, my personal experience dealing with HUMAN EMOTION, as well as share with you key highlights from this jewel of a book.

See you in the next chapter!