Daytrade With Confidence
Teresa Lo Of trendVue.com
by Jayanthi Gopalakrishnan
Teresa Lo, founder and chief market strategist of the trendVue.com educational financial website, worked in the stock brokerage business for more than a decade at Canada's largest independent investment dealer before she retired from the industry in 1998. She is a discretionary trader who uses classic technical trading methods and techniques. She has extensive experience in trading senior and junior equities, index/equity options, and futures.
With a background in life sciences, Lo earned a bachelor's of arts degree in economics and psychology from the University of British Columbia. She currently writes the 20/20 Insight newsletter and is the host of trendVue Pro Trader Real-Time Trading Group. She is the author of the trendVue Technical Trader's Handbook, developed the proprietary Trader's Handbook, and developed the proprietary algorithm for trendVue Swing Charts.
STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke with Teresa Lo via telephone on August 30, 2002.
This is what Lo had to say.
"Almost no one is depending on trading to pay their bills.
The whole 'you can trade for a living' is a big lie."
Teresa, how did you get into daytrading?
I worked for a few brokerage firms after I graduated from university. Everyone in the brokerage firm was trading all the time, so I did, too. By the way, it never used to be called daytrading -- it was called intraday trading. There were rows and rows of desk traders, floor traders, and others who traded on a very short time horizon. Because I was young and didn't have a lot of money, I found this all very interesting and I thought that maybe I could get some money out of it at some point. That's how it all started. I thought, wow, if I could perfect that, well, then one day I could make a lot of money. So off I went to try to learn everything I could about trading.
I understand you learned a lot about trading from observing the professional traders. How did that help?
What happens -- and it is not just with professionals -- is that when a lot of people start trading, they think there's a difference between investing and trading.
I think investing and trading are the same, with the difference being the amount of time that passes between when you write the buy and the sell tickets. When you're investing, that time is just longer. Eventually, the decision has to be made about when you go in and when you go out. You're still speculating about the future, so it is still a trade, no matter how you want to look at it.
When does investing become trading?
What typically happens is that when people decide they want to get involved in the whole spectacle, they go to the bookstore or the library and get a few books. They look at whatever's on the shelf and start reading. And as you and I know, a lot of fiction is on those shelves! People pick up the books and read about technical trading -- mostly about the indicators. Often they don't read enough to understand why something goes up or down. Instead, they just try to latch onto a few things they think will produce buy and sell signals, when they are only technical indicators. Indicators often seem like the way to go, because they're relatively easy to understand. But of course, they are called indicators for a reason -- they only indicate, they don't signal.
...Continued in the November 2002 issue of Technical Analysis of STOCKS & COMMODITIES
Excerpted from an article originally published in the November 2002 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2002, Technical Analysis, Inc.
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