The Secret of My success. Part 3. Perseverance.

I define perseverance as ACTIVE PATIENCE. I am a person of action, and I hate waiting around for things to happen to me. I always thought that in adversity, there is always something I can do to change my situation. This has not always turned into happy endings or made me many friends, but I just can't wait to let other human beings or circumstances to change my fate. I do it myself. This can be a terrible feature in a trader. I once tried to show my wife how I traded and she said I was "trigger happy". I also have a lifetime battle with procrastination and perseverance. I often have found troubling seeing things through to the end. However, I have learned that when I do see things through to the end, success turns out more often than not. Thus, my recommendation is perseverance.

When trading, if you find yourself having trouble sitting on your hands and do nothing, perhaps that is a good time to do some research. Read, look for educational material and always be in the look out for some other trading strategies. You never know when market conditions may change. I have been saying that I used to trade calls using Elliott wave analysis using Beckman's channeling method back in the 90's. I found that difficult during the bear market of the early 2000's and even today. When I restarted my trading career in Sept. 2002 after a 2 year hiatus, I decided not to waist my time with “yes-no-maybe-so” strategies. I decided to test any strategy for 6 months before declaring it useless for me. Why do I stipulate that a 6 month period will tell you whether a system truly works or not? First, there is market conditions. Some systems may be best suited for period of high volatility, for example, and that may vary over this 6 month period. Second, you need to give yourself sufficient time to master the technique selected. You'd be amaze how much you learn even after months of using a specific approach to trading.

I was determined to stay the course until I found that elusive options strategy that would give me leverage and control over my risk. Risk control and leverages are the two most attractive features of options, so I suspected that the right approach may bring me what I was looking for: limited risk, unlimited reward. Think about it, if you are to become rich trading, you need to be confident that the strategy will permit you to safely place tens of thousands of dollars of capital at play while reducing my risk to only a small fraction of that capital. I finally found it in late 2005, when I started to place moderate amounts of capital to test in a real cash account. Last year, I have met my long held goal and I am looking forward to large profits as I increase my capital per trade.

I suppose I could have struggled with other people's "systems", Bill Poulos' Swing Trading, or Swannelle's newest Zigzag strategy, which by the way, are among the best I know. But that would mean that I will be having too high of a proportion of losers, which would be fine if you limit your risk to 2% of your account and trade 50 trades at one time. No, I wanted something more reliable, that I could count on making me money 9/10 times, even if the profit was small. I wanted to have freedom and not worry constantly. My strategy had to fit my goals, not someone else's. I don't want to be a day trader (although I am one in fact, as I am constantly writing and looking for opportunities). I spend years looking for a trade that would allow me to take expanded vacations or exploration trips, without worrying about my investments. That meant that success, the second time around, came only in 2006, 3 1/2 years after I started looking in earnest. I found what suit me, my capital at play, my expectations of life, and my long term goals. I was spending my time looking and testing, while I could have been having limited success with "yes-no-maybe-so" strategies. My perseverance, my time spent in preparation, had finally paid off.

The journey was not without days of despair and intention to give up. But, to paraphrase Browning (see quote below), I was able to live with my doubts because of my faith that in the end my goals would be met. One needs to Believe!. But the journey never stops. there is always a better way, or an approach that would be better suited to the next market conditions. It is in the preparation that we assure our success when the opportunity presents itself. It takes Perseverance.

Juan Sarmiento.

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All we have gained then by our unbelief
Is a life of doubt diversified by faith,
For one of faith diversified by doubt:
We called the chess-board white -- we call it black.
ROBERT BROWNING, Bishop Blougram's Apology