Is it really that difficult?

[Salty Gibbon]

Trading in the Zone is a book that sorts out your head

Nonsense.

A book will only sort out your head if it drops on you from a great height.

It is you, and only you, who will sort out your head.

 

[JonnyT]

OK the book helps YOU to sort out YOUR head.

JonnyT

 

[pttrader]

Trading is difficult. However, many have learned how to trade and to make good profits. The game of trading is a BIG battlefield. In my opinion there are three things necessary to win the war and be profitable in trading. Please understand you can and will lose battles but can still win the war. Trading has given me some of the easiest profits with the least amount of work that I have ever gotton anywhere. And it is fun and believe me it can get addictive. To me it is an awesome thing to go head to head and toe to toe with the "deep pockets" institutions, daytraders and battle for the profits. It is a war zone. It is a pitting of your wits against theirs. There is a certain thrill that comes from being in the battle and winning. When you take a hit you have to lick your wounds and learn from your mistake and go back out there and GET YOUR money back. However, if you step into the battle with no game plan you can be sure the market will take you out forever. It is brutal and shows no mercy. You must have a game plan. Three things are necessary to be successful in the market.

1) Initial capitol to make trades.

2) A system that works and has at least a 60% to 70 % or better win rate

3) The discipline to follow the system.

Most traders that fail or get taken out lack in one or more of these areas. Or they may have all three but let their guard down in one or the other.

I have a system I use (and developed) that has given me a good win rate. If anyone is interested they can send me their email to [email protected] and I can send you more info.

Have a great day and win the war!

Keith

 

[TWI]

As an independent who has read neither I must say I find the title "Trading in the Zone" just slightly more alluring than "Techniques of Tape reading", still suppose you should never judge a book by its cover.

 

[elliottmillion]

going back to the original question, trading really is that difficult. the 98% are losers figure doesnt surprise me, id be shocked if it wasn't higher.

a good tip for you tysonlbc , i wouldn't bother reading any books, or watching any videos, or listening to any tapes about how to be a good trader. Fact is, if the people who wrote the books were so good at trading, and had such a great system for doing it, they wouldn't be telling you about it for £9.95!!!!!!!!
they'd be billionaires, the richest people on the planet. thats the nature of a market

 

[TheBramble]

Three things are necessary to be successful in the market.

1) Initial capitol to make trades.

2) A system that works and has at least a 60% to 70 % or better win rate

3) The discipline to follow the system.

Keith, I don't agree with point (2). Even a marginal system with proper money and risk management will make you successful in the market.

 

[TWI]

The system I use to trade STIRS probably has a 25-35% win ratio but it is the main provider of my meagre earnings. Fact is the losing trades generally close for costs whereas the winners make a tick or two. T4 I also would dispute (2).

 

[JonnyT]

I would dispute point 2)

Winning systems rarely (if ever) have a win rate above 40% of trades. Most are usually less.

JonnyT

 

[dglynn]

pttrader

With respect, I'd definitely advice you against reading Douglas's 'Trading the Zone' book. From a psychology perspective, I believe there are several references to you're trading style and attitude that might cause offence. However, trade (or battle) well.

To anyone else, an excellent read.

DaveG

 

[damianoakley]

I may as well jump on the point 2 thing made by pttrader.

Have to say this is totally wrong. Some of the best most profitable systems only have win rates of 25%. You could trade a 60% or 70% system and still lose all your money if you manage your trades poorly.

Just my blunt thoughts.

 

[anley]

A fair proportion of the losses are due to people trading too much (day-trading etc) and all of the profit being eaten up with costs.

"Day-trading" is a great marketing tool for the commission merchants, another subtle way for the financial services industry to transfer the money from clients' pockets to theirs.

 

[pttrader]

Keith, I don't agree with point (2). Even a marginal system with proper money and risk management will make you successful in the market.

Risk management I have included under my point on discipline. Obviousley you could have a system with a 90% win rate and not cut your losses and lose on one trade all you made on the previous 9 trades.

However, as important as risk management and cutting losses are I would not want to use ANY system that did not have at least a 60% win rate. Not in short-term trading.Why? There again it goes right back to risk management. The markets are an odds game. You have to tilt the odds in your favor ALL the way around if you expect to win in the long haul. If a system doesn't have a decent win rate then IT (the system) by definition IS RISKIER. You have just assumed more odds against you. The probabilities are against you making money with a system that loses 70% of the time and makes money 30% of the time. Of course, one could get lucky but luck doesn't last long in the markets. Why put the odds against you?? It is hard enough to make money with all the odds in your favor. Sure I understand that it IS POSSIBLE to use a system with a 30% win rate and come out smelling good but IS IT LIKELY? Not with the way I trade. Anyway that is my take on the matter. Have a great day!

 

[pttrader]

The system I use to trade STIRS probably has a 25-35% win ratio but it is the main provider of my meagre earnings. Fact is the losing trades generally close for costs whereas the winners make a tick or two. T4 I also would dispute (2).

Do you daytrade, swing trade, or long term trade with your 35% system?

That could make a difference.

 

[TheBramble]

However, as important as risk management and cutting losses are I would not want to use ANY system that did not have at least a 60% win rate.

Well, I'd certainly be very happy with a trading system that gave me a 60% win rate, don't get me wrong, but I've yet to find any with that level of success, not on a consistent basis anyway.

Looks like you're onto a very good thing with your system. Good stuff!

 

[pttrader]

I may as well jump on the point 2 thing made by pttrader.

Have to say this is totally wrong. Some of the best most profitable systems only have win rates of 25%. You could trade a 60% or 70% system and still lose all your money if you manage your trades poorly.

Just my blunt thoughts.

Everybody seems to think I am wrong in thinking you need a system that has a 60% 70% win rate. Of course, I totally agree that win rate means nothing unless one manages losses. But guys PLEASE put the odds in your favor. Would you want to make a bet flipping a coin - heads or tails that you pay out 1000.00 or win 1000.00 if landing on heads would happen 70% of the time and mean't you had to pay and landing on tails would happen 30% of the time and mean't you would win 1000.00. If the coin is rigged to land on tails 30% and heads 70% the odds are against you right off the bat. Any system thatt gives you a 30% win rate right off the bat is putting more odds against you even with good management. Of course I realize the coin example is not exactly a fair comparison to the markets becuase it does not imploy a stop loss that could keep you from paying out the whole 1000.00 but the point I am simply trying to make is the ODDs are in Favor of you paying out 1000.00 not winning the 1000.00. So, why not put the odds in your favor by using a good win rate system and on top of that add GOOD discipline to manage losses. Why cut grass with a dull slingblade.

 

[pttrader]

I would dispute point 2)

Winning systems rarely (if ever) have a win rate above 40% of trades. Most are usually less.

JonnyT

I daytrade/swing trade. In my opinion 40% might work with long-term trading but I couldn't make a 30% or 40% win rate work in short-term trading where I trade the minors daily moves of the market. Even with good risk management and cutting losses I would still be hard put to make money losing on 7 trades and making money on 3. Why? In short-term trading like I do you are not making the big moves. You capture the small moves over and over. 100.00 here 180.00 there 70.00 there 200.00 here but if you do that 5 to 8 times a day you have made some fairly good money for the day. But, if you lose on 7 of those trade you most likely ain't going to come out ahead by the end of the day.

Anyway, I do not think I would even want to use a 40% system for long term trading. But that is me. To each his own. Have a great day!

 

[pttrader]

pttrader

With respect, I'd definitely advice you against reading Douglas's 'Trading the Zone' book. From a psychology perspective, I believe there are several references to you're trading style and attitude that might cause offence. However, trade (or battle) well.

To anyone else, an excellent read.

DaveG

I have never read the book. If it did offend me because of taking a stance different than my own stance then I would back up and ask myself: Why did it offend me? Maybe it touched upon something I need to look at? Why did it get to me? I have no problem reading a book that takes a different stance than myself to trading. Hey! we need all the insight we can get in this war. The markets are brutal and unforgiving MOST of the time. A few times I have had the market be nice to me when I made a mistake but most of the time it is totally indifferent to the position I have take and feels no mercy or pity on me. So, in the markets I have to look out for my capitol because no one else is going to have my interest in mind. Their only interest is taking money from my pockets and putting it in theirs. That is a brutal but true fact. I am not saying that all traders wish the downfall of each other but I am simply saying MONEY is the game. Most all of us are in it for the money. A few for the thrill. Some for both!

I probally won't buy the book. I have alot of books already but if I see it in a book store I might check it out. You have gotton my curiosity stirred up as to whay it would offend me.

 

[Salty Gibbon]

Isn't it the case that there is always a trade off between win ratio and reward / risk ratio.

For example you may have 2 perfectly good winning systems where one has a 35% win ratio and the other a 75% win ratio. The first one might have a 4:1 reward / risk ratio but the latter might only have say 2 : 1 or less.

Both would be perfectly good systems but pyschologically for some people ( including myself I might add ) it is important to have that high win %.

 

[darktone]

A fair proportion of the losses are due to people trading too much (day-trading etc) and all of the profit being eaten up with costs.

"Day-trading" is a great marketing tool for the commission merchants, another subtle way for the financial services industry to transfer the money from clients' pockets to theirs.

A very shrewd point anley and one thats often overlooked imho. eg joe schmoe trading E$ 3-4 pips wide with a broker say 10 times a day.. (yes i know its not the way 😉) thats 30 - 40 pips from your pocket before a profit is turned 😱

I never lose more money than when I screen watch willing the market my way and over trade. 🙁 For me now 5 or so trades a month is more appropriate.

Ive done no research on this joe ross guy (and certainly dont plan to 😎 ) but this answer he gave in response to the on topic subject struck a chord, well at least up till the "Trading is freedom, not slavery" bit 🙂

Is trading for a living firstly viable and secondly desirable?
Yes, and yes! I’ve made my living at it all of my adult life. If you don’t try to make a job out of it, it is quite pleasurable. The problem with most aspiring traders is that they turn trading into a job. They are at it day and night. That’s not how trading is supposed to be. You become a trader so you can have a life of leisure. Trading is freedom, not slavery. A trader can live and work anywhere in the world where he can obtain a telephone connection. I know, I’ve traded on my laptop from a mountain top in South Africa. All I had was a phone line operated from a solar panel and a battery.

 

[jfran]

The other thing that much mention has not be paid to is what do we call a good win rate, I may trade a system that gives me 10 points with each trade I take and you may use a system that gives you 3 poinst each trade. We may both be successful 50% of the time , but whose system is better mine or yours?

Something to think about

rgds

knarf