Do I Have to Accept some Big Losses in the Beginning?

This is a discussion on Do I Have to Accept some Big Losses in the Beginning? within the New to Trade2Win forums, part of the Reception category; a big loss would suggest a big stop loss? a big loss suggest just one trade rather than the results ...

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Old Dec 24, 2008, 10:01am   #25
 
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a big loss would suggest a big stop loss?

a big loss suggest just one trade rather than the results from a statistical significant sample size of trades?

big sounds like an emotional term? if the loss is seen as big then reduce the stop loss to something that is not seen as big?

big losses suggests doing the one trade-loss-change the entry rules- one trade -loss-change entry the rules game. ie the inability to take even a single loss? which then just keep chipping away at the funds? is that avoidable? in theory yes if someone gets a good education in sample size trading from the beginning. otherwise probably not?
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Old Dec 24, 2008, 5:11pm   #26
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Quote:
Originally Posted by fantastic4 View Post
I think the answer here is really easy too, absolutely not. Just understand that you have a 92% chance of failure and that most succesful traders started out by going through three accounts, then you'll be ready to go. The guys who lose a bunch are the ones going in thinking they're going to make a bunch. Open up a teeny, tiny, account with very very low commissions. Trade a few shares at a time. That way you'll gain real experience and lose only a little or nothing at all. Your first goal should be to lose nothing.
The statement of failure rate of traders is overused ,and never qualified.Defining why you are trading,what is your concept of success,and are you willing to learn how to " trade" without indicators,alert services,etc... must be fully understood,and answered.The correct answer is not important,as long as you understand the question,and willing to look for answers that work.

Last edited by timsk; Sep 26, 2010 at 11:57am.
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Old Dec 24, 2008, 5:34pm   #27
 
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going way off-topic....

Quote:
Originally Posted by Victor90 View Post
If i lose myself and my desires, whats the point in making money?
Take your pick - it's either:

(1) to serve society
(2) to get fat and die with a big bank balance
(3) to fulfill the goals taught by any other religion (mostly all quite similar)

NB note (1) and (2) are religions too.

Happy Christmas
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Old Dec 30, 2008, 9:31am   #28
 
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Taking losses is part of the deal

I don't worry about taking a loss - it's of no consequence to me. I take the loss because I was wrong and the market was right, that doesn't mean I haphazardly toss my money around though. It just is, that sometimes you're wrong. Look how many thought Oil would hold above $75 - HA go figure - watch the biz news stations? uh huh what did the experts say? Look how many who went short closed at 100 a barrel - HA! and HA again! Many going long at 70 were thinking HA - look at it today - HA!

Small guys lose because they can't afford to hold on when they feel they should hold on - big guys win because they can.. Did anyone buy GM at 2.80? I did. When I bought it I knew it could fall to ZERO and So what? So I lost some... I certainly wasn't going to buy them at $50 just like I wasn't going to buy oil at 147 how many were saying 200 a barrel? I didn't buy copper at 4.15 a pound or gold at 950 an ounce. Don't listen to anyone and look at your charts!!!! when the price is low find out why and find out how much you can bet on it - don't do that process when the price is to high or mid-range

Patience! Don't listen to anyone! And look at the charts! Buy Low Sell High. If you look at a chart you can see where you could place your bets. If your bet was wrong and the other horse won ... oh well... I don't enter a trade without this attitude. It gives me a greater tolerance to seeing negative numbers.

I took losses when I started, I didn't plan to and I didn't try to, I just did. Sure it hurts but I'm a far better trader for it, and the lessons learned were priceless. I took a 200 pip loss on two trades recently (400) total... So what? I was wrong. I'm still wrong sometimes. No biggie. I mean how else would you know market direction right? :-) there is no doubt about direction when your losing money!

I don't think a beginner has to lose big but losing little bit by bit is far worse. Eating away at them like a chewing, gnashing psychosis that just can't deal with losing another 1000 trades! ARGH!!!!! Widen your stops give our trade some room to breath, most beginners use stops that are just to small and they get chipped to death.

Losing is not a bad thing - If you learned from it. A trader needs to learn what he did wrong, and stops that are to tight will always lose. Usually you're proven right, after you lost your stop. Get back up and keep your hands on the handlebars this time!
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Old Feb 3, 2009, 12:56pm   #29
 
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We are humans. everyone makes small mistakes in the begining. The matter is that how he learns from that mistakes.So starts with small trade,then increase ur trade as u became established in the field. Thats all i can say.Maybe it seems to be joke to some other's ,but its the fact.

Regards
Vivek

Last edited by timsk; Sep 26, 2010 at 11:59am. Reason: Removed link
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Old Mar 3, 2009, 8:17pm   #30
 
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People say that trading psychology is 80% and the actual trading process (or system) is 20%. The more I trade, the more I agree... no matter how good a system is, us humans like to tweak and play until the original system is no more.
I don't think there is any other way to gain the right trading psychology without trading which means losing money... there's nothing quite like trading which can build this up.
I'd be interested to know what other people think
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Old Jul 31, 2009, 3:22am   #31
 
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you have to accept SOME losses, but not necessarily BIG losses. i mean, you can use a stop limit and make sure you dont lose more than a certain amount. that's all about discipline and controlling yourself. even when the trend has reversed, sometimes people still hold the stock because they're hoping the trend will go in their favor so that they can break even, and perhaps take profit.

Now here is a paragraph I like from Trading For a Living by Alexander Elder, which by the way is a greatt book

"Traders often ask me how much they need to begin trading. They want to be able to withstand a drawdown, a temporary drop in the account equity. They expect to lose a large amount of money before making any! They sound like an engineer who plans to build several bridges that collapse before erecting this masterpiece. Would a surgeon plan on killing several patients while becoming an expert at taking out an appendix?"
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Old Nov 9, 2010, 7:28am   #32
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Re: Do I Have to Accept some Big Losses in the Beginning?

Yeah, I agree, losing is a part of trading. It's how you manage your risk that determines whether your account will be able to survive those losses in the long run. Good luck!
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