Is it all played out in the mind?

flea

Active member
160 22
Lets face it you can trade mechanically or discretionary, you can use fundamentals or technical analysis, you can use Level 2 screens and tape reading, you can be a value or growth investor, you can use trend lines(support and resistance, breakouts),candlesticks, bar, point and figure charts, moving averages(simple, expoential, volume weighted, etc.), RSI, MACD, Stochastics, ADXR, you can use , Fibonnaci, Gann, Elliot Waves. Some use Astronomy, i've never heard of it but some may read tea leaves, some may even flip a coin or use a pin and a copy of the FT. I apologise if I've left yours and therefore most imortant one out. I bet most of us use one of these or a combination of some of them together. Walking into the traders toolshop can be an overwhelming experience for most, clearly there aren't enough tools yet, because statistics say that around 80% of us will fail.

It's my argument that the different tools used aren't as important as is your approach to trading. If any of you have read the Market Wizard books you'll see that no two traders trade the same way yet they're all very succesful. When asked to define their trading(this is the bit where we all draw closer so as to not to miss the masters wisdom) all we get is things like don't blow your stops, run your winners. We already know this yet 80% of us will still fail, there must be more. In ths case I often think of the of footballer when asked to talk us through a great goal he's just scored. The explanation is always hugely disappointing like " I saw the golkeeper of his line and I just hit it", yea right I do that but when I do the ball goes out for a throw in. When I short a stock because the stochastic is way over-bought and the price has ripped through the top of its' Bollinger band it carries on going up. The truth is like great sportsmen and women I don't think these great traders can explain what it is they do differently from us mere mortals, because I don't think they really know and if they do they certainly can't define it.

It's not what you use to trade it's how you do it. If you look at trading as a probability game, if you do know that your system gives you a slight edge then surely if you keep taking trades when you see your set up probabilty will work in your favour over time. Of course it aint as simple as that. Say your system back tested, wins on 60% of its setups, you don't know if your first 40 out of a hundred trades are going to be the loosers. I think you'd be only human if your not seriously doubting your so called edge at this stage.

Well what's the solution? I'm sorry but I still don't know but what I would say, is there is far too much attention paid to trading systems when what we need to do is to be able to think like the 20% that do win, it's not their trading tools that make them succesful but the way they think and if nothing else, if we begin to see and accept this we could save ourselves a fortune on trading books and systems and begin to see trading for what it is.

A probability game that s won and lost in your head.

Good trading.

Flea
 
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Riz

Experienced member
1,266 5
Thanks, flea..makes interesting reading and food for thought, I use a combination of TA, L2, news, etc on my trades, one or more getting priority on each, they all most certainly help me with my trades, but they've never been decisive on my winnings or loses....it's always been me, the way I think, feel and handle and react to certain market circumstances

Riz
 

ChartMan

Legendary member
5,580 46
Great post, Flea. I agree entirely.Especially the bit about 'what happens if your first 40 trades are losers'? Simple. You're BUST. And if you're not bust, you're probably hanging from the end of a rope. :( Those that have deep pockets,in my opinion, stand the greatest ( not the only) chance of success. Any errors /bad runs can be sustained at put to the back of their minds, and still have funds to continue their hard learning experiences.It often crosses my mind 'how would I do if I had a big pot of gold' ? Would I be persuaded to double down- it's only money and I've got plenty of it...I hope not, though I have seen traders do it, with success. I guess it's a case of ' do you feel lucky, punk' ? For every trader that extricate themselves from the clag by doing that, there must be dozens that don't, and therefore expire.
Just as in your football analagy, it's a funny old game.
 

sath1

Junior member
13 5
I am a pro trader- I live from trading

you have 1 mistake - there are much fewer winners in the markets. maybe less than 10 or even 5 percent makes it in trading. I'm trading 7 years and 3 years ago I managed to get out from the 90-95 percent losers.I now only trade for myself from home and I live very well from trading . how did I do it ?

IT IS ALL THE WAY I THINK !!!! I HAD TO CHANGE HOW I THINK ABOUT THINGS !!

trading successfully is so difficult because we need to adapt our minds to an environment of constant uncertainty. I never try to know what going to happen next at the market or even in any trade I make. I found out that I don't need to know what going to happen next in order to make money or in other words - to be a consistent winner - no matter what the market do. I fully accept the risks of trading and embrace them. my believe in the uncertainty and probabilities is now so strong that I never give much attention to any specific trade - whether it becomes a loser or A winner. when I take a trade I never know what will happen with that trade. it comes out a winner or a loser. I just know in advance that the chances are with me . on the long run with enough sample size of trades - I know that I will come out net winner . in other words - I'm managing my own
private casino in the market !!!
 
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dcraig1

Experienced member
1,604 243
While it may well be necessary to overcome your own demons, it is far from sufficient. No amount of positive thought will ever overcome the absence of a statistical edge.

It is all too easy for the purveyors of dodgy trading systems and methodologies to blame their "victims" for having the wrong attitude.
 

laptop1

Experienced member
1,105 131
5 Years ago this was asked

The first to post by flea Last Activity: was in 19-12-2002,

Second post by Riz Last Activity: was in 11-03-2007

Even chartman who have posted recently dont trade anymore.

This tells you, how hard this game is.
 
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dbphoenix

Legendary member
6,953 1,260
The first to post by flea Last Activity: was in 19-12-2002,

Second post by Riz Last Activity: was in 11-03-2007

Even chartman who have posted recently dont trade anymore.

This tells you, how hard this game is.

Timeless posts are forever . . .

Db
 

sath1

Junior member
13 5
if you have an edge that puts the odds in your favour

Great post, Flea. I agree entirely.Especially the bit about 'what happens if your first 40 trades are losers'? Simple. You're BUST. And if you're not bust, you're probably hanging from the end of a rope. :( Those that have deep pockets,in my opinion, stand the greatest ( not the only) chance of success. Any errors /bad runs can be sustained at put to the back of their minds, and still have funds to continue their hard learning experiences.It often crosses my mind 'how would I do if I had a big pot of gold' ? Would I be persuaded to double down- it's only money and I've got plenty of it...I hope not, though I have seen traders do it, with success. I guess it's a case of ' do you feel lucky, punk' ? For every trader that extricate themselves from the clag by doing that, there must be dozens that don't, and therefore expire.
Just as in your football analagy, it's a funny old game.

and even if you trade entirely random - without any edge - the probability of 40 losing trades in a row is very very unlikely. I think it equals to the chances to win the lottery .
there is no luck for pro traders - we just trade our edge over and over again - in the long run we come out net winners - exactly like casinos and pro gamblers make money...

now I have a very important question for you : what system do you prefer ??? a system that makes money at 90% of the trades and gives you 50 trades a year or a system that makes money at 55% of the trades and gives u 1500 trades a year ??
 

Trader333

Moderator
8,655 981
More information is needed:

1) What is the reward to risk ratio for both approaches ?
2) What is the percent intra-day drawdown on the account ?



Paul
 

sath1

Junior member
13 5
RR Ratio

1st system 1 to 6
2nd system 1 to 2

lets put the intra day draw down out of the equation for now.

and I want to say something that most of the pro traders will find maybe strange.it all came from my own experience as a trader. when you predefine your RR RATIO you'll be able to make some money on the markets - but you won't be able to make big money in the markets. the reason is that markets always changing - and RR of yesterday is not the RR of tomorrow. when I used to predefine my RR ratio I always lost the big moves. the big money in the stock market comes from the big moves - the big winning trades. when you predefine RR ratio you'll always miss this big winning trades. this days I let the markets tell me when to take my profits from a big trade - when the conditions are against my trade I quit it and take my profit without any reservation or hesitation. I never let profitable trade turn into a losing 1 - never ... you can never know when the market will stop going in your direction ... again - with my own experience I found out that I lost money at many trades that with an RR method I would have made ... but the big winners always compensate and give you much multiple times more money than this trades ... :cool:




Paul[/QUOTE]
 
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trendie

Legendary member
6,858 1,416
...
Even chartman who have posted recently dont trade anymore.

This tells you, how hard this game is.

:eek: are you sure? Chartman was one of the leading lights when I joined way back when. His Dow thread was one of my favourites, and told me it was possible to win at trading.
He was very open about his method, and traded it real-time, along with a few newbier.

I hope what you say isnt so, as its successes like Chartman, Mr.Charts, TWI, wasp and a few others that keeps me at it.
 
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black bear

Guest
1,303 165
Is it all played out in the mind ? = NO IMO

A simple thought from a man with reasonable experience at both

Horses, snooker, cards and now Trading

I have all my adult life at times enjoyed a punt, always a responsible punt with money I can always afford to lose (Bank)

I lost at 1st in all things I have speculated upon but always improved to the point where I managed to re-capture the loss"s for tuition fee"s and then manage to bump along a little better than breakeven :LOL:

I used to play snooker for money, not huge money but serious enough, a weeks wages could go down the pan quite quick if you failed to mind your work.

(£200 in the early 1980"s)

You could not get a good game in my day without playing for money.

Observation from what I have learnt so far in life and a "quote" that I have found very very true in all things where a person is trying to win outright be it sport or speculation or I think any activity where failure is absolute.

Absolute = not achieving what one wanted to achieve in the 1st place.


"Its not Luck-theres probably no such thing as luck, and if there is you can"t depend on it. All you can do is play the percentages, play your best game, and when the critical bet comes- in every money game there is always a critical bet-

You hold your stomach tight and push hard.

Thats the clutch.

And thats where your born loser loses."

Bert
in Walter Tevis

The Hustler(1959)


"Thats the clutch" = Class which is predetermined at birth and that is an absolute fact.

To rise above ones Class is Impossible, you can be faster on the clock but you will lose over 90% of the time when you encounter another individual who has more Class than yourself.

The word another could be substituted with trading circumstances an individual finds themselves in or any life experience for that matter that puts the individual under a pressure to perform right here and right now.

A potencial large win situation

I have observed the above to be true both in my own endeavours and the endeavours of those more able than me.

When I or those individuals came up against their own personal class barrier, well I for one have never seen the overhead resistance breached for any meaningful length of time, a flash in the pan, one good day at the office thats all.

I am approaching overhead resistance with my own trading, I am in profit but its just not enough :LOL: :LOL: :LOL:

Just looking for a few good days at the office, :LOL:

and will keep looking till they bang the lid shut :D

Trade well all

keep it simple 90% of it is in the mind thats why 90% lose :eek:

Sorry Db (55-60%) sure to be a closer estimate than me because he"s got more class

Andy
 
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black bear

Guest
1,303 165
Final thoughts from Bert

A simple thought from a man with reasonable experience at both

Horses, snooker, cards and now Trading

I have all my adult life at times enjoyed a punt, always a responsible punt with money I can always afford to lose (Bank)

I lost at 1st in all things I have speculated upon but always improved to the point where I managed to re-capture the loss"s for tuition fee"s and then manage to bump along a little better than breakeven :LOL:

I used to play snooker for money, not huge money but serious enough, a weeks wages could go down the pan quite quick if you failed to mind your work.

(£200 in the early 1980"s)

You could not get a good game in my day without playing for money.

Observation from what I have learnt so far in life and a "quote" that I have found very very true in all things where a person is trying to win outright be it sport or speculation or I think any activity where failure is absolute.

Absolute = not achieving what one wanted to achieve in the 1st place.


"Its not Luck-theres probably no such thing as luck, and if there is you can"t depend on it. All you can do is play the percentages, play your best game, and when the critical bet comes- in every money game there is always a critical bet-

You hold your stomach tight and push hard.

Thats the clutch.

And thats where your born loser loses."

Bert
in Walter Tevis

The Hustler(1959)


"Thats the clutch" = Class which is predetermined at birth and that is an absolute fact.

To rise above ones Class is Impossible, you can be faster on the clock but you will lose over 90% of the time when you encounter another individual who has more Class than yourself.

The word another could be substituted with trading circumstances an individual finds themselves in or any life experience for that matter that puts the individual under a pressure to perform right here and right now.

A potencial large win situation

I have observed the above to be true both in my own endeavours and the endeavours of those more able than me.

When I or those individuals came up against their own personal class barrier, well I for one have never seen the overhead resistance breached for any meaningful length of time, a flash in the pan, one good day at the office thats all.

I am approaching overhead resistance with my own trading, I am in profit but its just not enough :LOL: :LOL: :LOL:

Just looking for a few good days at the office, :LOL:

and will keep looking till they bang the lid shut :D

Trade well all

keep it simple 90% of it is in the mind thats why 90% lose :eek:

Sorry Db (55-60%) sure to be a closer estimate than me because he"s got more class

Andy

another thought card from Bert I used to like to read to myself before a big game

The mind can play funny tricks on you under pressure, real funny tricks.

Run your Profits in the trading game is where that pressure IMO is at its greatest.

The tricks your own mind can get up to even with a written plan etc in place can be exteme when you manage to play yourself into a good winning position.

Before I close out a profitable trade I always consider this or try to at any rate.:LOL: :LOL:


"Some people lose their heads cold sober.

Cards, dice, pool; it makes no difference. You want to be a winner,you got to keep your head.

And you got to remember that there"s a loser somewhere in you, whining at you.

You have got to learn to cut that losers water off"


Bert
in Walter Tevis

The Hustler(1959


Andy
 

Trader333

Moderator
8,655 981
Can you give some examples of not being able to rise above the class that you are born into ?


Paul
 
 
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