A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

This is a discussion on A "First Steps" forum ? lol! Here is my advice: newbies, just quit ! within the First Steps forums, part of the Reception category; The main reason most newbies fail is because we are set up phychologicaly to fail at trading, there are many ...

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Old Mar 19, 2012, 1:07pm   #31
Joined Apr 2010
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

The main reason most newbies fail is because we are set up phychologicaly to fail at trading, there are many reasons for this but an example is letting losers run and cutting winners short.

Agree with Douglas when he says trading is 80% phychological 20% method,wish I had read his book (the disciplined trader) a long time ago.
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Old Mar 19, 2012, 1:27pm   #32
 
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Joined Mar 2012
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

So... some say it is profitable.... some not... haha I will keep on virtual operations... I wont put a real buck on the markets after finding out by myself if this is really working or not!!

Anyway...I like trading!! Maybe because it looks like poker (in which btw, only 5% of the players win), making decisions using statistics and information to win money!! I like it also because it embraces economy knowledge and stuff so i also get educated!

For me its like a game now... i was hoping it could be a profitable game though

Thanks for the advices!!
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Old Mar 19, 2012, 5:23pm   #33
Joined Oct 2009
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

Quote:
Originally Posted by wallstreetwarrior87 View Post
Hi bbmac,

my point is that an efficient trader knows his/her stuff. This is because they have proceeded down the correct path (eventually) after a realisation that this is more about oneself than "conquering the market".

So an efficient trader knows that the current state of the pound/dollar is in a wait zone until we move up later on (from a high probability POV). Whats more, an advanced trader could have switched to channel mode this morning to trade the range (but this takes time and experience and the correct platform to understand the various stages of the market development).

People should focus on what [U]needs to be done [/U]to achieve their goals rather than posting a long list of what it takes to fail and ultimately become bitter because of this experience.
Just a thought; most come into trading and are totally focused on "winning". However, if we used our energy to understand what it takes to lose, we may do better, or at least give ourselves a better chance to avoid losing. I wonder how many actually approach trading from this angle?
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Old Mar 19, 2012, 7:23pm   #34
Joined Apr 2006
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

Quote:
Originally Posted by wallstreetwarrior87 View Post
I wonder how many actually approach trading from this angle?
Practically everyone who makes reasonable money probably does. Its insanity not to control the only thing you have control over.
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Old Mar 19, 2012, 7:31pm   #35
Joined Oct 2009
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

Quote:
Originally Posted by the hare View Post
Practically everyone who makes reasonable money probably does. Its insanity not to control the only thing you have control over.
So roughly only 5% (if figures are to be believed) approach trading from this angle

I would agree with that.
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Old Mar 19, 2012, 11:06pm   #36
 
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Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

Quote:
Originally Posted by wallstreetwarrior87 View Post
Just a thought; most come into trading and are totally focused on "winning". However, if we used our energy to understand what it takes to lose, we may do better, or at least give ourselves a better chance to avoid losing. I wonder how many actually approach trading from this angle?

Not only this, there are different stories to be read and told, ranging from Dan Zanger (love that name), to T2Ws very own who post trades and results etc. All different types of people with differring views and ways. It's obviously not something that is black and white, but we all try to explain it as black and white, and maybe that is fundamentally wrong.
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Old Mar 20, 2012, 12:22am   #37
Joined Feb 2012
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

Wow, that is a great post. You really can't be reminded of these things too often.

Excellent stuff .

Quote:
Originally Posted by bbmac View Post
Whether the failure rate statistic above is as high as the oft quoted 95% for retail traders - there is no way of knowing. What is clear though is that the failure rate is very high. Below I list some of the reasons for this.

a. The sub culture that surrounds trading as I intimated above suggests that you can ' get rick quick ' and work ' just five minutes day ' etc. This is plainly false and very misleading. It causes many to follow these apparent shortcuts letting their hope / greed cloud their common sense. If it looks too good to true - it usually is !

b. When they commence live trading - they simply don't know what it is they need to know and are distracted by false noises such as detailed in point a. above. They have no idea that actually trading isn't about getting involved in as many opportunities as possible - but about disregarding as many risks as possible to leave only the highest probability trading opportunities. This requires patience and discipline. It was Aristotle that said ' Patience is bitter - but it's fruit is sweet. '

The 1st goal of a trader should always be capital preservation, (Ie you have to be able to 'stay in the game ' through sensible and proven risk management techniques.) Only then can you achieve the 2nd goal which is to grow that capital. The 3rd task is to learn from every trade you place.

c. They are generally under funded and as a result of this (and greed) are over leveraged. Whilst the leveraging of margin can magnify gains it can magnify losses also. All too often they take advantage of the ridiculous levels of leverage willingly offered by the brokers and the result in more cases than not is that sooner or later they blow out their accounts and lose their trading margin.

d. They have no idea what a Trading Edge is, how to acquire one or what they then need to know about it in order to ensure that it throws up no surprises that can lead to problems, and a loss of trading margin.

e. They don't understand the psychological barriers that can prevent them from achieving their trading aims even with a proven Trading Edge. In his book Reminiscences Of A Stock Operator about the legendary Wall Street Trader Jesse Livermore, Edwin Lefevre suggests that one of the prime reasons most never make it is because;

i. When the natural human instinct is to hope - in trading you have to fear

ii. When the natural human instinct is to fear - in trading you have to hope

I.e: Most times the necessary cognitive responses required in trading run counter to the instinctive human ones. Furthermore when entering a market you have to be right at the right time, not right at the wrong time - because this is the same as being wrong. For example in a bullish market you have to know what the highest probability set-ups are to buy to profit from the rising price. If you buy in the wrong place and price corrects to the downside, even though it may resume it's rise you have been stopped out for a loss. You were right - the market was bullish - but you were right at the wrong time !

My experience is that developing the necessary 'trading psychology' can prove harder than mastering the technical stuff. Getting a proven consistently profitable way to trade (ie a Trading Edge) that can be relied upon to produce a regular income is one thing, but as the excellent Mark Douglas (Trading in the Zone, The Disciplined Trader etc) points out - it is the destructive effects of the human emotions connected with any discretionary trading that can lead to the ' Profit Gap, ' ie the difference between having a proven trading edge and actually being able to make a reliable and consistent income from it yourself. Of course the first step is to actually acquire a proven consistently profitable trading edge, but even given this - some never close this 'profit gap.'

G/L
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Old Mar 20, 2012, 12:28am   #38
Joined Feb 2012
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

Another very good post. If I may, would you care to outline the basics of your approach to give members some idea of what a profitable strategy might involve (do you use charts, ladder, timescale etc)?

I had to chuckle at (and whole-heartedly agree with) the "obsession" point. I genuinely think that is what it takes - it certainly has been in my case.


Quote:
Originally Posted by Hoggums View Post
I understand your sentiments and I think for the majority of people you are probably right. However, I am making a tidy sum these days and despite the odd curve ball the market throws at me I’m feeling pretty optimistic about the future. BUT it has been a long journey with plenty of highs and lows and has taken countless hours of my time.

For me it has been an obsession, most of my private thoughts are to do with trading and analysing what if’s and different scenarios. I’ve often thought about whether if someone asked if I would recommend it as a hobby/career – I would probably say no to most people. However – I don’t regret a single minute of my losses/failures as they were a valuable education and I wouldn’t want to deny someone of a similar determination the opportunity.

For me, attending a course was never a consideration, buying an EA a ridiculous idea, I wanted to figure it out all for myself – and I really think you need to be that sort of person to succeed in training. Being able to be honest with yourself and recognise you own inadequacies is vitally important to. For instance, I am no better than flipping a coin to predict future market direction, and that is now factored into my trading method, it’s adapted to my personal strengths.

This is just a personal view – but if you fit all the criteria below then I say go for it, otherwise think seriously – because trading may not be for you.

1. You have spare cash that if you lost, it would make no difference to your life.
2. You’ve never been tempted to buy a trading course or an Expert Advisor
3. You have/had a hobby or skill that took many years of dedication and lots of practise to master (e.g. musical instrument)
4. You were always more interesting in making things and how they were made than actually using them (e.g. computer games/bikes/cars)
5. Ability to recognise your own faults. (most people I know are incapable of this).
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Old Mar 20, 2012, 1:14am   #39
Joined Oct 2011
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

So far we have nine good qualities for a winning trader.

1. You have spare cash that if you lost, it would make no difference to your life.
2. You’ve never been tempted to buy a trading course or an Expert Advisor
3. You have/had a hobby or skill that took many years of dedication and lots of practise to master (e.g. musical instrument)
4. You were always more interesting in making things and how they were made than actually using them (e.g. computer games/bikes/cars)
5. The ability to recognise your own faults. (most people I know are incapable of this).
6. The ability to recognise that markets are not fair or equal, and understand why.
7. Accept that trading is a business, the successful participants will do everything to preserve their money.
8. The ability to take a positive from a crushing negative (the ability to come back).
9. Totally ignore the good feeling from a good win.
__________________
"Human beings are best understood as being risk-averse when making a decision that offers hope of a gain
but risk-seeking when making a decision that will lead to a certain loss." - Daniel Kahneman

"Men who can both be right and sit tight are uncommon.
I found it one of the hardest things to learn."
- Jesse Livermore
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Old Mar 20, 2012, 1:14am   #40
Joined Aug 2011
Re: A "First Steps" forum ? lol! Here is my advice: newbies, just quit !

A few years back I put together a simple trading system. I would measure the number of volatility break outs on the London markets and plot them against the FTSE price, a real easy peasy system and with the help of some other indicators it worked. I tested it over 1½ years by paper trading and although it only gave 1 or 2 signals each month it never lost! I was so pleased with this little system I finally took some money out of the bank and placed my first trade. The system had it’s first loss with that first trade and I got hammered. Now I had some other things going on at the time so I never went back to that system but when I think about it now the only thing that was different when I placed that first trade was that I was actually on the market (not paper) and of course if they can see your stop they come get it. That makes me think that demo accounts, paper trading ect is a waste of time because you are not actually trading. Even back testing for me is a waste of time because of all the different dynamics that can not possibly be factored in. Demo accounts are good practice for opening, closing and managing a position but when you go live trading it’s a whole new ball game. The only thing that matters is NOW.
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