A few things I've learnt

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trader_dante

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Aug 18, 2005
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#1
A few things I've learnt in my time. I think these apply to many different fields in life, not just trading.

1. There is often a huge difference between what you want to do and what you are good at doing.
Some people want the excitement and the energy of day trading but do not have the characteristics to excel in it. Perhaps they are not mentally fast enough or are not aggressive or flexible enough to be a scalper. Instead, perhaps they are more analytical and patient. You have to play to your strengths and weaknesses. You might WANT to be a position trader and make huge amounts of money adding and holding and running but you might find you are naturally more suited to being quick in and quick out, looking for very short term opportunities and taking them as they occur.

2. You cannot make money when you need to make money.

If you need money, get a job. There is no simpler way to put it. Needing to make money puts a huge amount of pressure on you. I am not saying it cannot be done, I am just saying do not be surprised if you fail when you try.

3. People will tell you something cannot be done for no reason other than that they cannot do it themselves.

I have witnessed this time and time again. I firmly believe that if someone lacks the imagination or experience to tell them something can be done they will tell you it cannot. I have seen people saying that trading without a stop loss will not work and have sat with incredible traders who have none. I have seen people say that the house (perhaps replace with SB company) always wins and then seen a young girl with no knowledge of trading or the markets WHATSOEVER, find a loophole in their systems and take them to the cleaners in the process.

4. The simpler you make every pursuit, the easier it becomes to excel in it.

Strip everything off your charts that you do not need. There is a saying that the best system/strategy can be written on the back of a postage stamp. If your strategy is "I wait for the 50 EMA to cross the 100 EMA at a 30 degree angle or higher and then I wait for a breakout of the 10 day high. But I must have the RSI above 50 when it occurs and the market must be in less than 1/3 of its ATR and not hugging the upper part of the Bollinger Bands when I take a position." This might work for you (see part 3) but does it still work the same if you take the Bollinger Bands off? The more you can strip it down the easier it becomes. This is partly because systems that rely on too many inputs are more likely to be dependent on a particular market phase.

5. There is always something new to learn and a better way to do something

You can always do things better. ALWAYS.
 
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Lee Shepherd

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Feb 12, 2008
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#3
Something I've learnt recently, thought it hasn't sunk in fully yet:
I'd rather be poor with fifty years to live than rich and dead.
This is true, but I'd rather have 50 years to live and rich, than poor and dead.

Choices are plentiful in this world we live in today, we just have to put the effort in and work hard and smart for them.

Which choice will you strive to get????
 
Likes: luckyd1976
Oct 14, 2008
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#4
Very true :)

I wonder how many people would sacrifice their lives to provide financial secutiry for their families?
 

BSD

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Feb 8, 2006
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#6
LOL NT, you nicking my song there ?

;-)

4. The simpler you make every pursuit, the easier it becomes to excel in it.
Absolutely.

As William of Ockham very rightly observed in what came to be known as Occams Razor, "All other things being equal, the simplest solution is the best."

And all other things are very equal in trading, but by absolutely no means only there.

Most things in life are really simple enough - if not maybe easy always -, once you succeed in seperating the noise from the few, truly success relevant factors.

It's almost always lack of understanding or a need to stoke a bruised ego that leads to undue complexity.

Ego driven efforts at problem solving only make you want to be right over wanting to be successful.

As amazing as it is, but a clear majority of people prefer being right over having success.

A very bad sign is when people aren't able to explain in a few words what constitutes the relevant essence of what they are on about, what the 20% of their effort that generates 80% of their results is.

Jack Welch) said it and did it, Business is simple, undue complexity is almost always nothing than an attempt to camouflage lack of true understanding.



Harvards department of psychology did a famous complexity experiment where two groups of students had to come up with explanations to simple problems. The first group got the correct evaluation from the professors, ie if they had come up with the correct explanation they received a "correct", if not they got a "wrong", while the second group got random evaluations, so that even if they were right they might have received a "wrong" and vice versa.

The first groups solutions were all admirably simple, while the second groups explanations became increasingly complex as they tried desperately to force the inexplicable facts to fit their ever wilder theories.

KISS: Keep It Simple, Stupid !
 

Lee Shepherd

Well-known member
Feb 12, 2008
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#7
There are some hypocrites here...

3. People will tell you something cannot be done for no reason other than that they cannot do it themselves.

5. There is always something new to learn and a better way to do something

And you get reps....



UNSUBSCRIBED!

New Trader,

Sometimes I just dont get you mate.

Not sure if your joking or you have a chip on your shoulder.

Be cool.
 

trader_dante

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Aug 18, 2005
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#8
There are some hypocrites here...

3. People will tell you something cannot be done for no reason other than that they cannot do it themselves.

5. There is always something new to learn and a better way to do something

And you get reps....

YouTube - Dead or Alive - You Spin Me Round (Like a Record)

UNSUBSCRIBED!
Oh dear, here comes new_trader again with his criticism of almost every post I make. lol

Firstly I said here are a few things I've learnt and as we all, surely, by now understand, KNOWING does not EQUALS doing. But lets presume, it does:

First off, I have never told someone that they cannot do something. I have advised that some things might not work or are much harder, based on my own experiences. If you can find a post where I have categorically said something cannot be done, post the link and I will acknowledge I have been hypocritical.

In reference to my second point, clearly, what you are getting at here is our recent "disagreement" over stops and you are hinting that I refuse to accept there is a earlier and better and more "proficent" entry into a trade. In which case, I'll direct you to points 1. I am not a short term trader - I am neither quick, nor aggressive. I play to my strengths. Point 5 was keep it simple - if it ain't broke, don't fix it. I very much doubt I would be more successful on lower timeframes. So I try to keep learning by looking for areas of trading that will help me develop my longer term outlooks such as fundamentals which I am currently studing intensely.

Thank you.
 
Likes: Lee Shepherd
Feb 17, 2008
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#9
Trader_dante,
If I may disagree with you about point 2, who doesn't "need" money. I know what your saying that if your trading to pay the mortgage, then clearly the pressures on.
I never really got this, when article would say "trade with money you don't need", while were on the subject, if anyone has any money you don't need, please send it to me

Graham
 
Likes: cryten

rols

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Sep 10, 2004
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#10
4. The simpler you make every pursuit, the easier it becomes to excel in it.

.
I agree with Trader_Dante that the simpler things are, the better.

The reason being that if a monkey could trade your system then there is a chance that a person and his human emotions can.

However IMO to reach this level there is a strange paradox.

In order to think and trade like like a monkey an unimaginable amount of work and brainpower is needed to get there. Wittgenstein's ladder again.

On the subject of monkeys and learning this is well worth a read
Monkeys Learn In The Same Way As Humans, Psychologists Report
 

trader_dante

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Aug 18, 2005
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#11
Trader_dante,
If I may disagree with you about point 2, who doesn't "need" money. I know what your saying that if your trading to pay the mortgage, then clearly the pressures on.
I never really got this, when article would say "trade with money you don't need", while were on the subject, if anyone has any money you don't need, please send it to me

Graham
lol Graham,

Agree - we all want money but some of us don't need it. There is a difference. If I need £1100 per month to live and my salary is £1,500, I have an extra £400 I do not NEED. So my personal circumstances will not be adversely affected if I lose it. This is what I mean.

When I left a full time job to trade for the first time, I needed to make that salary to live and the pressure was enormous. When I failed and went back into full time employment, I began to make money consistently. The strategy had not changed in the slightest but I was no longer emotionally attached to the outcomes of every trade.
 
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theSheik

Active member
Sep 10, 2008
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#13
The supreme goal of all theory is to make the irreducible basic elements as simple and as few as possible without having to surrender the adequate representation of a single datum of experience

With love, -Uncle Albert ( Einstein not the other one - thanks TheBramble ;¬) )
 
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PKFFW

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Jan 9, 2006
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#14
And you get reps....
Don't worry T_D, this is the real fixation of n_t..........he just hates the fact that you have more dots than him is all.

If you hadn't gotten reps for your post he probably wouldn't have made a comment at all.

It's really rather funny coming from someone who keeps banging on about how one must put ego aside and all that.

Cheers,
PKFFW
 
Likes: luckyd1976

Adamus

Well-known member
Mar 25, 2008
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#15
I agree with Trader_Dante that the simpler things are, the better.

The reason being that if a monkey could trade your system then there is a chance that a person and his human emotions can.

However IMO to reach this level there is a strange paradox.

In order to think and trade like like a monkey an unimaginable amount of work and brainpower is needed to get there. Wittgenstein's ladder again.
So what's WIttgenstein's ladder then? Looks like a book title according to google, but couldn't get the idea in a nutshell.
 

jeffsmith

Active member
Oct 30, 2008
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#16
2. You cannot make money when you need to make money.

If you need money, get a job. There is no simpler way to put it. Needing to make money puts a huge amount of pressure on you. I am not saying it cannot be done, I am just saying do not be surprised if you fail when you try.
I really vouch for that. Its disheartening to see people lose money when "earning" money is the sole reason they are there.
 
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