Leaving too much on the table, or losses

[piphoe]

Which do you hate more?

 

[Brumby]

Trading is a miserable experience when your protective stop is hit. It is even more miserable when you failed to have a stop in place and your position goes even further against you. Likewise, you feel miserable when your profit target is hit and then prices just continue to the moon.

Have a trade plan. Stick to it. Plan the next one and then the next. The only thing that matters is whether you traded according to the plan. Considering which one is more miserable is not very useful unless misery is your friend.

 

[Quantt]

Which do you hate more?

Must be leaving too much on the table... Losses, (especially small) are already baked into my strategies, but if I am constantly leaving too much on the table, it means there is something fundamentally wrong with my system, so I would hate it more

 

[barjon]

The mind’s an odd beast. I really hate giving money back, much more than the irritation of an initial loss and much, much more than watching price move on after I’ve exited.

 

[brewski1984]

I hate losing more than anything

 

[piphoe]

Thanks for replies. I hate leaving too much on table, operative word "too much".

I know i have to leave a little, nobodies perfect right? but where really moves in my favor and i am out because i thought that was "it"...

tha really irks me, AND tells me MAYBE just maybe smthg is wrong in my analysis. not always though, could be an outlier.

thanks again for replies, pls everyone else..

 

[piphoe]

just to add smthg, leaving too much on table is a problem i have still. actively working to minimize this, maybe should be happy with with a win. over-optimizing is a real concern too...oh well

 

[ForexLonger]

I think I prefer to earn even if not all the move than to lose because loss is something wrong at all for what we do but a small gain makes a good feeling that next time we will improve and catch the whole wave

It's just my opinion and that's how I feel and like there's the wise quote that says:
No one got poorer from a little earn

BTW have a good trading all

 

[ForexLonger]

Losing is my hate because when i win even a little i have the feeling that next time it will be better and i still did the right decision and im in the right path..

As one said: "No one got poor from winning little money" ... something like this..

Happy trading all!

 

[Quantt]

over-optimizing is a real concern too...oh well

Frankly I think the under optimizing is even worse...

 

[piphoe]

"you can't go broke taking a profit".

i don't think that's true.

 

[piphoe]

Frankly I think the under optimizing is even worse...

interesting, pls explain a bit more by what you mean by "under-optimizing"

 

[Quantt]

interesting, pls explain a bit more by what you mean by "under-optimizing"

I guess, what I meant is: if you do not back test enough (at least 1 market cycle minimum), you are running the risk to constantly leave money on the table and limit your wining and consequently limit your ability to compound your winnings...

 

[piphoe]

I guess, what I meant is: if you do not back test enough (at least 1 market cycle minimum), you are running the risk to constantly leave money on the table and limit your wining and consequently limit your ability to compound your winnings...

Quantt, would define each so we are all on same page.

over-optimization? under-optimization?

we all have our own concept of each, so lets say explicitly what we are each talking about.

 

[Quantt]

Quantt, would define each so we are all on same page.

over-optimization? under-optimization?

we all have our own concept of each, so lets say explicitly what we are each talking about.

One example would be betting size: if you read Alexander Elder's books where he is promoting risking only 1 or 2 percent, but this could be under optimization compared to using actual data and Kelly criterion for example to calculate the exact for betting size for your strategy...

If Kelly calculation is returning let's say 6% for back testing of 20 years - this could be an over optimization, because the future winning and loses cannot be quantified...

In this case as suggested as one of the first quants, maybe half a Kelly is the best to be used in the stock market - 3% in our example...

 

[Brumby]

One example would be betting size: if you read Alexander Elder's books where he is promoting risking only 1 or 2 percent, but this could be under optimization compared to using actual data and Kelly criterion for example to calculate the exact for betting size for your strategy...

If Kelly calculation is returning let's say 6% for back testing of 20 years - this could be an over optimization, because the future winning and loses cannot be quantified...

In this case as suggested as one of the first quants, maybe half a Kelly is the best to be used in the stock market - 3% in our example...

Have you read any of Nassim Taleb's books especially the one titled "Fooled by randomness"? Essentially in investing, it works until it doesn't and that randomness plays a much more significant role than is normally understood. What is a truly representative market cycle?

 

[Quantt]

Have you read any of Nassim Taleb's books especially the one titled "Fooled by randomness"? Essentially in investing, it works until it doesn't and that randomness plays a much more significant role than is normally understood. What is a truly representative market cycle?

Yes, I have red the book (and the one after long time ago) and I don't agree with everything he is saying... If I remember well the example was with the naked option traders, they'll win 1000 times small amounts and one time they'll lose everything and go bankrupt. You don't need an advanced degree to see this, just enough back testing... Which brings us to the market cycles - represented buy bull and bear periods, as we are right now in the 9th or whatever year of a bull market - easy to see on a chart....

Frankly, I don't believe the markets are random, I do believe they are actually trending, for example the chances tomorrow the SPY will be around the price it is today, it will not go to $200 tomorrow, $5 on Friday $1456 next Tuesday and $67 on March 5th...

And the fact that the markets are not random is what's enables us to actually make money constantly in the long run and there are a lot of examples of traders beating the market with different trading strategies...

 

[Cerid]

I still prefer trading on small amount of money, as it enables me to have a better control over the risks. If you risk everything, you can not only make a lot of money at once, but also loose it.

 

[Quantt]

I still prefer trading on small amount of money, as it enables me to have a better control over the risks. If you risk everything, you can not only make a lot of money at once, but also loose it.

It has to be optimal: neither more or less or you'll lose money either way...

 

[Whitehead]

On the Forex market, you enter a trade with a loss whether you buy or sell a currency pair according to the spread. You have to overcome that intial few points loss, so you are advised to trade as low if you are not confident about your trades. You should have a money management plan for entering the trades.