Q&A by Don Bright
IS AUTOMATION THE ANSWER?
Iíve been trading for about seven
months. Iím a good trader when it comes
to entering trades and gauging the
marketís strength and direction, but I
have no risk tolerance, perhaps because
I donít have a lot of money in my account
and I tend to butcher the trade
(for example, I was in the airlines before
the market yesterday but got out
way too soon, and they were the strongest
sector). I thought the best method
might be to get an automated program
that would exit my positions for me,
thereby getting rid of the emotional
factor thatís killing my profit potential.
What do you advise traders as the best
way to overcome this large obstacle?
And do you think an automated program
is the answer?óJoseph
Your concern is a common one when
traders are trying to play with too little
money ó like being short-stacked in a
poker game, tough to compete.
Automating just might make things
worse ó visual monitoring and reading
the market is still better than any computer
program. For example, you buy
something at 31.20, plan an exit at 31.55.