No Plan, No Trade

This is a discussion on No Plan, No Trade within the Psychology, Risk & Money Management forums, part of the Methods category; Originally Posted by tomorton Day-trading attracts gambler types. Day-trading is the only form of trading new traders think they have ...

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Old Apr 16, 2017, 11:36am   #57
 
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Originally Posted by tomorton View Post
Day-trading attracts gambler types.

Day-trading is the only form of trading new traders think they have a chance to profit at and can enter cheaply and start making money quickly. It might be the only form of trading they have ever heard of. It will wipe out most of them within a year. Can't shed many tears for them though: they're the sort of people who chance a red light now and then.

If you're a new trader, don't day-trade until you can trade.
Not unlike the wannabe poker player who enters a professional tournament without knowing the difference between a straight and a flush.
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Old Apr 16, 2017, 11:46am   #58
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Originally Posted by tomorton View Post
Day-trading attracts gambler types.

Day-trading is the only form of trading new traders think they have a chance to profit at and can enter cheaply and start making money quickly. It might be the only form of trading they have ever heard of. It will wipe out most of them within a year. Can't shed many tears for them though: they're the sort of people who chance a red light now and then.

If you're a new trader, don't day-trade until you can trade.
The reason why most go into day trading is , we believe in certainty and all our actions are based on seeking certainty in what we do.If we cross the road , we want to be sure no traffic is coming.

There is uncertainty about , how the market will behave in the future ( swing periood of 2 to 5 days or next month ).There is more certainty , when you see charts intraday , but this also means trading noise. . this is what attracts people into daytrading.
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Old Apr 16, 2017, 4:22pm   #59
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The reason why most go into day trading is , we believe in certainty and all our actions are based on seeking certainty in what we do.If we cross the road , we want to be sure no traffic is coming.

There is uncertainty about , how the market will behave in the future ( swing periood of 2 to 5 days or next month ).There is more certainty , when you see charts intraday , but this also means trading noise. . this is what attracts people into daytrading.

Its an illusion that intra-day price behaviour is more predictable than multi-day. Its possible that both are equally predictable or unpredictable but its equally possible that multi-day is easier to predict. Though "prediction" is really not what we're about but you know what I mean.

But this illusion is what attracts new starters into day-trading, they feel they're taking lower risks. There is no evidential or experiential basis for this. After all, most new traders are day-traders and 90% of them fail.
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Old Apr 16, 2017, 4:52pm   #60
 
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Its an illusion that intra-day price behaviour is more predictable than multi-day. Its possible that both are equally predictable or unpredictable but its equally possible that multi-day is easier to predict. Though "prediction" is really not what we're about but you know what I mean.

But this illusion is what attracts new starters into day-trading, they feel they're taking lower risks. There is no evidential or experiential basis for this. After all, most new traders are day-traders and 90% of them fail.
A perception that is easily missed.

As for predictability, it depends on whom one is trading with. Those who daytrade aren't focused on the same movements as those who trade daily and weekly and monthly charts. In fact, the latter don't even see what small-interval daytraders are looking at, so any substantial move at any given point or level is purely coincidental. Even accidental. If one wants to enhance his success at daytrading, it is important to be aware of what those who are interested in longer timeframes are looking at, as it is they who move money and thus prices.
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Old Apr 16, 2017, 5:17pm   #61
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Coincidental/accidental - I like that.
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Old Apr 16, 2017, 5:31pm   #62
 
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Coincidental/accidental - I like that.
It should come as no surprise that daytraders are looking at different things than fund managers. The "swings" that daytraders are so fond of aren't even seen by most traders. And the timeframes that interest daytraders are far smaller than those that interest traders who focus on daily and weekly charts, much less the focuses of those who trade 5m intervals vs 15m intervals vs hourly intervals. And since everyone is focused on a different interval and timeframe, they to a large extent trade at cross-purposes to each other. Which is a chief reason why so many trades fail.

But the time eventually comes when the planets align and everyone just happens to be looking at the activity surrounding -- for example -- the previous day's high, or the previous week's high. They are all looking at the same thing in largely the same way and trading the same move. Everyone is on board, and the train takes off in a very impressive way. Those who are not aware of this dynamic may view it all as coincidence, but it is more accurately a phenomenon in which everybody in all timeframes is trading in the same direction.

I love those days.
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Old Apr 16, 2017, 6:11pm   #63
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https://www.google.co.uk/webhp?sourc...ed+to+be+right

The need to be right about placing trades plays an important part in their decision to day trade , secondly they get immediate action in the market .How does a new trader know , if the price will be higher or lower tommorow ? There are two fears that make them decide when to trade and what to trade , these are

Fear of Not Being Right :They could be wrong on a trade they have no certainty about

-Fear of Loss :They could suffer a loss on a trade they have no certainty about

In trading , when putting on a trade , we exit a trade when it moves a few ticks against us , we are constrantly re-entering into trades when it catches our direction and getting out of trades , when it it again moves a few ticks against us.This is a need to be right , in our brain calling the shots.

https://www.google.co.uk/webhp?sourc...+right&tbm=vid
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Old Apr 17, 2017, 3:38pm   #64
 
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There are other things at play here. While watching price during my waking/trading hours I feel more in control. I can see whats happening now, and whether any anomalies have shown up in my world view of price behavior. I can act on them right away when daytrading.

I constantly wonder "what the hell is going on" while swing trading sleeping or away from the screens
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