New traders - SPAM or no SPAM, punklesam is absolutely right. It is pretty widely accepted that most people who come to trading are forced out due to losses. Or at least not having made the gains they thought they would, which is not the same thing. The common thread though is psychology.
The market does not do the unexpected 90% of the time. And certainly not with such force as to instantly wipe out the traders who were on the wrong side of the move. So the problem is not the market.
The problem is mostly mental, most novices have unrealistic expectations or lack the mental fortitude to develop, test and stick with a systematic method, or are unprepared for losses, or have an unconscious block.
The unconscious blocks can be the worst and most difficult to identify and confront. Many of us are brought up with attitudes to hard work, honest effort, gainful employment, money, job success, earned / unearned income and all that baggage which are incompatible with successful trading. So traders sometimes sabotage their own efforts due to some kind of guilt / mental mismatch between what they want and how they are getting it. These inner conflicts can be deep and hard to spotlight.
As an example, we will often hear, as a term of praise or professional recognition, the phrase 'full-time trader'. As if that were a good thing! But really, which is better, being a successful 30-minute a day trader or being an exactly equally successful, 10-hour a day trader? For the same money, surely, the less time you put in to earn it the better? But in reality, we can sometimes be so bound by the self-recognition that comes from a job / profession that we see trading as a job-substitute. Trading is an activity to generate money, end of story. If you need to use it as a means to re-define yourself, whether as a market player or trader or hot-shot gambler or entrepreneur or whatever, you are trading outside the true reality. You might just as well make up charts out of your head.
Every new trader should indeed read Mark Douglas as punklesam recommends.
The market does not do the unexpected 90% of the time. And certainly not with such force as to instantly wipe out the traders who were on the wrong side of the move. So the problem is not the market.
The problem is mostly mental, most novices have unrealistic expectations or lack the mental fortitude to develop, test and stick with a systematic method, or are unprepared for losses, or have an unconscious block.
The unconscious blocks can be the worst and most difficult to identify and confront. Many of us are brought up with attitudes to hard work, honest effort, gainful employment, money, job success, earned / unearned income and all that baggage which are incompatible with successful trading. So traders sometimes sabotage their own efforts due to some kind of guilt / mental mismatch between what they want and how they are getting it. These inner conflicts can be deep and hard to spotlight.
As an example, we will often hear, as a term of praise or professional recognition, the phrase 'full-time trader'. As if that were a good thing! But really, which is better, being a successful 30-minute a day trader or being an exactly equally successful, 10-hour a day trader? For the same money, surely, the less time you put in to earn it the better? But in reality, we can sometimes be so bound by the self-recognition that comes from a job / profession that we see trading as a job-substitute. Trading is an activity to generate money, end of story. If you need to use it as a means to re-define yourself, whether as a market player or trader or hot-shot gambler or entrepreneur or whatever, you are trading outside the true reality. You might just as well make up charts out of your head.
Every new trader should indeed read Mark Douglas as punklesam recommends.
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Thank you for agreeing, tomorton. I think every intermediate trader should read this book or new traders once they reach the stage of psychological issues because the first few months of trading most of these issues are not faced.
By the way, is it not acceptable to promote books on T2W? Most other forums I have been on would never respond to a new member in the way I have been treated thus far on here?
tenbobtrader
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imho a really great post Tomorton
I do not think anyone should under estimate the power of the points you have made and the effect they can have on an individuals objective judgement process
"if you don"t no who you are, then the market is an expensive place to find out"
it may of course be the only place on Earth to find out but at least you have been made aware
the book is 1st class ~
"Every new trader should indeed read Mark Douglas as punklesam recommends"
and re-read it at a latter date, which is a good habit to get into with any educational material imho
Andy
tenbobtrader
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BSD
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It's been some years, but I read MD, and definitely agreed with what he wrote.
Excellent common sense.
"1) Anything can happen – there are always unknown forces and traders operating
2) You don’t need to know what is going to happen next to make Money - So long as you have an edge then the laws of probability will decide the outcome over a series of winning and losing trades. Market info is only threatening if you expect the market to do something for you. If you don’t expect the market to make you a winner every time you will have no fear of losing, if you don’t expect the market to keep going in your direction you will take profits off the table. If you believe this then how can the market make you wrong. If you believe anything can happen then you will always be right. If the odds are in your favour then every loss puts you closer to a win.
3) There is a random distribution between wins and losses for any given set of variable that define an edge. : If you believe this then you will be looking for anything that meets your criteria of an edge and jumping in without hesitation. If you still believe trading is about analysis for each loss you will be doubting your edge and gathering yet more info.
4) An edge is a higher probability one thing will happen over the other. The only evidence you need to gather is whether the variable you define as an edge are present at any one time. When you use other info you are adding random info outside of the parameters of an edge to your trading regime. This will create a random inconsistent approach that will lead to random inconsistent results. Why bother gathering further info, if the market is offering you a legitimate edge, determine the risk and take the trade.
5) Every moment in the market is unique. If each moment is like no other then how can you know what will happen next, so why bother trying to know. The best traders have trained their mind to believe in the uniqueness of each moment. If you believe in this uniqueness you will not associate and your mind will be open to perceive what the market is offering from its perspective.
You will enter “the zone” when you are tapped into the “now moment” opportunity flow. This will happen when you are at peace with not knowing what’s going to happen next and make yourself available to the market."
All from Trading in the Zone
Excellent common sense.
"1) Anything can happen – there are always unknown forces and traders operating
2) You don’t need to know what is going to happen next to make Money - So long as you have an edge then the laws of probability will decide the outcome over a series of winning and losing trades. Market info is only threatening if you expect the market to do something for you. If you don’t expect the market to make you a winner every time you will have no fear of losing, if you don’t expect the market to keep going in your direction you will take profits off the table. If you believe this then how can the market make you wrong. If you believe anything can happen then you will always be right. If the odds are in your favour then every loss puts you closer to a win.
3) There is a random distribution between wins and losses for any given set of variable that define an edge. : If you believe this then you will be looking for anything that meets your criteria of an edge and jumping in without hesitation. If you still believe trading is about analysis for each loss you will be doubting your edge and gathering yet more info.
4) An edge is a higher probability one thing will happen over the other. The only evidence you need to gather is whether the variable you define as an edge are present at any one time. When you use other info you are adding random info outside of the parameters of an edge to your trading regime. This will create a random inconsistent approach that will lead to random inconsistent results. Why bother gathering further info, if the market is offering you a legitimate edge, determine the risk and take the trade.
5) Every moment in the market is unique. If each moment is like no other then how can you know what will happen next, so why bother trying to know. The best traders have trained their mind to believe in the uniqueness of each moment. If you believe in this uniqueness you will not associate and your mind will be open to perceive what the market is offering from its perspective.
You will enter “the zone” when you are tapped into the “now moment” opportunity flow. This will happen when you are at peace with not knowing what’s going to happen next and make yourself available to the market."
All from Trading in the Zone
B
Black Swan
Excellent points well made as per usual, the Cromwellian protestant 'guilt' of; "is this it?" is very relevant to trading. We were conditioned for centuries as a society to believe that rewards only come from "hard work". Our concept of what represents hard work need to be totally re-defined in order to become a successful trader.
One other quick point, this "90% fail" contention needs re-defining IMHO. I'd suggest that 90% of folk do fail but I wonder how those percentages change if you really dedicate yourself to trading? Do perhaps 30% finally succeed if they totally commit/immerse themselves into their chosen industry? As a head count I'd hazard a guess (based on the trade laws of probability
) that more than 30% of the folk I 'talk' with on here have success to one degree of another, maybe 50%? Perhaps 90% of folk who take a punt do fail but I'd be very surprised if 90% of folk who have totally commited themselves to this new job ( in the the way I have over the past 18 months) fail...tenbobtrader
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"is this it?"
Huge amount of information processed to get to that sentence
Andy
Huge amount of information processed to get to that sentence
Andy
"Trading is an activity to generate money, end of story".
What is a job, then? I personally don't agree with this part of your post (or most of the above copy - of course, that doesn't mean you're not right
). I think trading is a viable occupation like any other and it takes hard work to get it right - it's not 'easy money'. If it were, we'd all be rich. Yes, it's not 'labour' but then neither are a lot of occupations and there are many that seem 'easy' when in fact it's just the opposite like professional sportsmen, singers/actors, advertising execs, artists, etc. I'm sure they don't sit around feeling guilty that they're not 'working hard enough' due to the perceivement of others.Trading may not be a 'job' to you but if you were being paid to do it (and get it right) every day for 8-10 hours a day, would you still have the same philosophy?
Yes, a trader works with money - it's their medium or their environment - but it's the same for anyone working in the financial sector. Anyway, just my opinion.
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Technically Fundamental
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"Trading is an activity to generate money, end of story".
What is a job, then? I personally don't agree with this part of your post (or most of the above copy - of course, that doesn't mean you're not right
Trading may not be a 'job' to you but if you were being paid to do it (and get it right) every day for 8-10 hours a day, would you still have the same philosophy?
Yes, a trader works with money - it's their medium or their environment - but it's the same for anyone working in the financial sector. Anyway, just my opinion.
Depends why you get into it and who you work for IMO
B
Black Swan
"is this it?"
Huge amount of information processed to get to that sentence
Andy
got ya...
One other quick point, this "90% fail" contention needs re-defining IMHO. I'd suggest that 90% of folk do fail but I wonder how those percentages change if you really dedicate yourself to trading? Do perhaps 30% finally succeed if they totally commit/immerse themselves into their chosen industry? As a head count I'd hazard a guess (based on the trade laws of probability
I've had several different jobs in the past and I don't think I've ever worked harder at anything than retail trading. If anyone told me I wasn't working, I'd sock him one (especially on a down day!)
IMO, I think about 10% of people would excel in most occupations e.g. 100 random people (not medical students) sit a medical exam, 10 will probably pass and become doctors, etc, etc. The difference is that not everyone tries to become a doctor just because the pay is good. Not everyone tries to become a commercial pilot (even though they may daydream and think it's a glamourous career). But for some reason, many people try to become traders or make money trading when perhaps it's simply not suited to them. Am I way off track or does that make any sense? I mean, if you have an aptitude for something and acquire the necessary skills for doing something - then why should you 'fail'? You might not make millions, but you should be able to earn at least a modest living out of anything that you are suited to/have aptitude for and are willing to work at. Do you think 90% of institutional traders who are taught by the institutions fail? I don't think so. But it makes sense that 90% of ALL so-called 'traders' (including every Joe and his mum sitting at home at his pc - of which I am one) will probably not do so well. But apparently it has nothing to do with intelligence - so at least that's encouraging! EDIT: I'd be interested to know the statistics of any other career/occupation i.e. those that try and fail compared to those that succeed/earn a living. The entertainment industry for a start must be far worse.
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A job is so much more than a means to make money. It can define every atom of some people's being and their whole way of thinking, to the extreme point where its designation goes through job to trade to profession to career to vocation etc.. it differs at the fundamental level whereby a person's time is sold for reward, and the reward increases in proportion at first to their level of knowledge, later to their acceptance of responsibility. Trading brings a rising reward for increasing risk whereas another characterising objective of a job is the off-loading of risk onto another party.
Trading and a job are hardly comparable in fundamental nature.
tenbobtrader
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I have never read any research that indicates high intense retail trading is possible with the aim to make enough money to live on for even the 10% mentioned
please direct to resource - any resource that covers burn rate etc etc
if you pass an exam / s s s
then you are a doctor and earn good money regardless of if you excel at it - average is very ok if your so inclined
average does not cut it imho for would be full time retail traders
"Trading is an activity to generate money, end of story".
I think that is correct, there should be no other motif behind it and your intent
please direct to resource - any resource that covers burn rate etc etc
if you pass an exam / s s s
then you are a doctor and earn good money regardless of if you excel at it - average is very ok if your so inclined
average does not cut it imho for would be full time retail traders
"Trading is an activity to generate money, end of story".
I think that is correct, there should be no other motif behind it and your intent
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"It can define every atom of some people's being and their whole way of thinking, to the extreme point where its designation goes through job to trade to profession to career to vocation etc." - and you don't think trading can do that?!?!
On the other hand, it sounds like you're saying that being a private trader is like being self-employed or having your own business? Well that makes sense.
As for traders in institutions - can they not progress to management (account manager/fund manager) and delegate responsibility to floor traders, etc. where their time is sold for reward and paid by the institution while at the same time having the opportunity of 'defining every atom in their being and whole way of thinking' through their corporate 'job'?
I agree, a trader's job is to make money (or more specifically to sell something for more than he paid for it - vice versa for shorts. If he does that right, the money will follow) - and that's the same for any kind of trader, even if you're selling apples at the local market - if you do it right whose to say you won't make a fortune? Like a doctor's job is to make people better (if he doesn't do this he fails, but if he does it right the money will follow), like a pilot's job is to fly a plane without crashing it (if he doesn't do this, he fails), etc, etc.
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tenbobtrader
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many pilots fly for many years and then crash !
only a few in the moment when tested prove to be the genuine real deal and land their fully loaded plane on water
all in a days work
YouTube - US Airways Crash Video Flight 1549 Hudson River US Coast Guard Vessel Traffic Service
only a few in the moment when tested prove to be the genuine real deal and land their fully loaded plane on water
all in a days work
YouTube - US Airways Crash Video Flight 1549 Hudson River US Coast Guard Vessel Traffic Service
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