GladiatorX
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This post is for people who are struggling with their trading, not being profitable and finding themselves working extremely hard to no effect.
A recent post 'Who uses stop losses?' and the various replies about how they are neccesary, proffesional, business-like. What i realised from this, mostly, is that the retail crowd is conditioned to act like a flock of sheep. Books and information avaliable to those not in the direct trading arena, tell the same stuff about money management, tell you your stupid to average down, use stop losses, risk 1% of your account, and other common propaganda
The interesting thing i've realised about such comments, is that the individuals who say them, have got them from a different book - Its a never ending cycle. To my belief, those that write books, detailing and explaining how retail traders should trade, aren't particularly good traders themeselves - And i don't want to see facts from their trading statements to prove me wrong. The reason i believe this is due a solid believe i've always had in respect to the market, you must embrace uncertainty. Those that write books, make seminars, are just trying to find certainty due to their own inability to trust their own trading.
Thats fine with me, but what i've noticed is that these common ideologies are regarded as trading wisdom among the trading community. I was feed all this when i was learning to trade, an important man told me when i was learning that 95% of traders fail and therefore you shouldn't listen to them and you should try to think outside of the box. In my own trading, this has most certainly been applied since day one to the extent that i spent a period of time fading Money Weeks suggestions and it worked. I've always tried to think in a unique and different way to other, common, public traders and through doing that i've made myself succesful.
Replicated all over the internet is losing traders with the following beliefs
- High probability + Discpline = Success
- Must use stop loss and have a designated, already planned risk:reward ratio, know exactly what risk is in a particular trade
This is all understandable and the reason the public sticks so firm to these rules is it adds certainty to the market place, you know your risk, and thats it. There is no chance of becomming emotional when your brokerage account goes bust and you feel major anxiety as you try to explain to your friends that its still a worthwhile pursuit to continue....
In the market, certainty doesn't exist, any rule that tells you otherwise exists from the major belief of the public and retail traders.
When i was learning, the fact 95% lose was a very solid fact in my mind... Everything i read from traders who were losers i would make the opposite a firm belief. Although admittedly i went through a phase of having a set risk:reward ratio (1:2) and risking 1% of my account, thus calculating my position size must be (x). My stop loss was frequently hit and i wasn't surprised, after all, i cannot predict the future price direction, i can only guess and maybe through experience have a higher probability of being right. But ofcourse my stop loss is getting hit.
1. I'm buying High, i'm buying on a higher close, buying in a late signaled uptrend rather than buying on falling price.
That was my first realization.
My second was that, ofcourse my stop loss is getting hit...
2. Price is volatile, its not about being able to expertly forecast price direction with the precision to be able to place a 5 pip stop loss, its about watching the market dance, letting it move, up and down and just trying to take a piece, without trying to be right.
Using a stop loss therefore in my mind became 'trying to be right', i would go long, set a stop loss because i'm confident i can forecast that prices will move higher and if they don't i'll exit because i was wrong...
I tried to move away from this idea and explore how i could trade without being right... Without a stop loss. I had printed off all my trades i ever did and analysised them in detail trying to find what went wrong and they were my findings, one i was buying on an upbar, two i was going long because for whatever reason, i believed price would go higher and therefore i set a close stop loss.
My stop loss would get hit time and time again, and thats not a problem its fair enough, i'm sure individuals use stop losses and have a 1:2 risk reward ratio and have a 66% probability of being correct and therefore through calculation they will be succesful over x number of trades... But personally i saw trading as more of an art, than certain maths, and more about movement than predicting price direction. I believe what i have described is a common reason traders fail.
They all have a set ideology that if they pursue a high probability strategy and use discpline, they will be succesful, that its stupid to have a risk:reward ratio of less than 1:1, that its stupid to aim for very high win percentages, that entering price is the most important detail.
I hope through reading that, some of you come to a realization about your own trading career thus far, is trading really about having a certain risk:reward, applying the same risk to every opportunity, exiting at a pre-determined level with no further analysis after initiating a trade...
Those on the forums that are succesful, it is likely that they do use such a strategy or methodology, that small percent, and the rest thing if only they could they could join that few percent. But the thing is, this forum is full of retail traders, so ofcourse the lucky few who make a living from such strategies use these ideologies, because 'its common wisedom'... Its extremely hard and thats why only 5% can, but if everyone just looked past such wisedom you can see trading doesn't have to be so complicated and time-consuming, volatility is enough to make profits without being a prophet or able to interpret a maze ball.... All the prop firm traders that are succesful that i have been lucky enough to meet, all the books i have read that are genuinely created by proffesional traders, all the experience of successes i have had from trading all come from this same ideology and methodology i am trying (and maybe failing) to display coherently...
Proffesional traders trust their thoughts and analysis in entering and exiting, and i understand that people keep telling you that succesful traders have a SYSTEM, they follow with GREAT discpline and MONEY MANAGEMENT... The people replicating this are just speaking to themeselves, telling themeselves one day they will make it if they stick to them rules... I can tell you, proffesional traders win through their own judgement and experience and volatility... Not hard backtested strategies.
Dinos may disagree but he is an exception and argueably, having been trading 10 years, through following such difficult wisedom has made the entire trading difficult for himself, despite succesful and probably not AS succesful as he would be had he not following such a route. But as no1 says 'There are many ways to skin a cat' 'But only one way to do it properly'... And i believe that you shouldn't follow the flock.
So how can you change your current quest to trade for a living?
1. Read my previous post about how to learn to trade, i seriously think if traders learn to read the markets, they will be succesful, even if by 'reading' i mean interpreting the market to their own beliefs about the market from personal research... doesn't have to be correct. Read it, take it in.
2. Try to escape common wisedom and general public beliefs. Start thinking outside the box, stop researching stochastics no matter how many times you've heard 'Many ways to skin a cat' and start looking into volatility, high win percents and try get past your human instincts and don't use hard stops, or atleast never let them get hit.
3. Average down and pyramid with risk management.
4. Enter when price is falling.... In an uptrend.
I strongly believe averaging down, as long as it isn't done due to fear or because you are losing (If done as a planned strategy) is an easy way to profit... That is from personal experience and it is expressed in my account balance.
I will try update this a bit more later, try make it a better article, less waffling.
Thanks for reading.
Gladiator X Glad to help.
A recent post 'Who uses stop losses?' and the various replies about how they are neccesary, proffesional, business-like. What i realised from this, mostly, is that the retail crowd is conditioned to act like a flock of sheep. Books and information avaliable to those not in the direct trading arena, tell the same stuff about money management, tell you your stupid to average down, use stop losses, risk 1% of your account, and other common propaganda
The interesting thing i've realised about such comments, is that the individuals who say them, have got them from a different book - Its a never ending cycle. To my belief, those that write books, detailing and explaining how retail traders should trade, aren't particularly good traders themeselves - And i don't want to see facts from their trading statements to prove me wrong. The reason i believe this is due a solid believe i've always had in respect to the market, you must embrace uncertainty. Those that write books, make seminars, are just trying to find certainty due to their own inability to trust their own trading.
Thats fine with me, but what i've noticed is that these common ideologies are regarded as trading wisdom among the trading community. I was feed all this when i was learning to trade, an important man told me when i was learning that 95% of traders fail and therefore you shouldn't listen to them and you should try to think outside of the box. In my own trading, this has most certainly been applied since day one to the extent that i spent a period of time fading Money Weeks suggestions and it worked. I've always tried to think in a unique and different way to other, common, public traders and through doing that i've made myself succesful.
Replicated all over the internet is losing traders with the following beliefs
- High probability + Discpline = Success
- Must use stop loss and have a designated, already planned risk:reward ratio, know exactly what risk is in a particular trade
This is all understandable and the reason the public sticks so firm to these rules is it adds certainty to the market place, you know your risk, and thats it. There is no chance of becomming emotional when your brokerage account goes bust and you feel major anxiety as you try to explain to your friends that its still a worthwhile pursuit to continue....
In the market, certainty doesn't exist, any rule that tells you otherwise exists from the major belief of the public and retail traders.
When i was learning, the fact 95% lose was a very solid fact in my mind... Everything i read from traders who were losers i would make the opposite a firm belief. Although admittedly i went through a phase of having a set risk:reward ratio (1:2) and risking 1% of my account, thus calculating my position size must be (x). My stop loss was frequently hit and i wasn't surprised, after all, i cannot predict the future price direction, i can only guess and maybe through experience have a higher probability of being right. But ofcourse my stop loss is getting hit.
1. I'm buying High, i'm buying on a higher close, buying in a late signaled uptrend rather than buying on falling price.
That was my first realization.
My second was that, ofcourse my stop loss is getting hit...
2. Price is volatile, its not about being able to expertly forecast price direction with the precision to be able to place a 5 pip stop loss, its about watching the market dance, letting it move, up and down and just trying to take a piece, without trying to be right.
Using a stop loss therefore in my mind became 'trying to be right', i would go long, set a stop loss because i'm confident i can forecast that prices will move higher and if they don't i'll exit because i was wrong...
I tried to move away from this idea and explore how i could trade without being right... Without a stop loss. I had printed off all my trades i ever did and analysised them in detail trying to find what went wrong and they were my findings, one i was buying on an upbar, two i was going long because for whatever reason, i believed price would go higher and therefore i set a close stop loss.
My stop loss would get hit time and time again, and thats not a problem its fair enough, i'm sure individuals use stop losses and have a 1:2 risk reward ratio and have a 66% probability of being correct and therefore through calculation they will be succesful over x number of trades... But personally i saw trading as more of an art, than certain maths, and more about movement than predicting price direction. I believe what i have described is a common reason traders fail.
They all have a set ideology that if they pursue a high probability strategy and use discpline, they will be succesful, that its stupid to have a risk:reward ratio of less than 1:1, that its stupid to aim for very high win percentages, that entering price is the most important detail.
I hope through reading that, some of you come to a realization about your own trading career thus far, is trading really about having a certain risk:reward, applying the same risk to every opportunity, exiting at a pre-determined level with no further analysis after initiating a trade...
Those on the forums that are succesful, it is likely that they do use such a strategy or methodology, that small percent, and the rest thing if only they could they could join that few percent. But the thing is, this forum is full of retail traders, so ofcourse the lucky few who make a living from such strategies use these ideologies, because 'its common wisedom'... Its extremely hard and thats why only 5% can, but if everyone just looked past such wisedom you can see trading doesn't have to be so complicated and time-consuming, volatility is enough to make profits without being a prophet or able to interpret a maze ball.... All the prop firm traders that are succesful that i have been lucky enough to meet, all the books i have read that are genuinely created by proffesional traders, all the experience of successes i have had from trading all come from this same ideology and methodology i am trying (and maybe failing) to display coherently...
Proffesional traders trust their thoughts and analysis in entering and exiting, and i understand that people keep telling you that succesful traders have a SYSTEM, they follow with GREAT discpline and MONEY MANAGEMENT... The people replicating this are just speaking to themeselves, telling themeselves one day they will make it if they stick to them rules... I can tell you, proffesional traders win through their own judgement and experience and volatility... Not hard backtested strategies.
Dinos may disagree but he is an exception and argueably, having been trading 10 years, through following such difficult wisedom has made the entire trading difficult for himself, despite succesful and probably not AS succesful as he would be had he not following such a route. But as no1 says 'There are many ways to skin a cat' 'But only one way to do it properly'... And i believe that you shouldn't follow the flock.
So how can you change your current quest to trade for a living?
1. Read my previous post about how to learn to trade, i seriously think if traders learn to read the markets, they will be succesful, even if by 'reading' i mean interpreting the market to their own beliefs about the market from personal research... doesn't have to be correct. Read it, take it in.
2. Try to escape common wisedom and general public beliefs. Start thinking outside the box, stop researching stochastics no matter how many times you've heard 'Many ways to skin a cat' and start looking into volatility, high win percents and try get past your human instincts and don't use hard stops, or atleast never let them get hit.
3. Average down and pyramid with risk management.
4. Enter when price is falling.... In an uptrend.
I strongly believe averaging down, as long as it isn't done due to fear or because you are losing (If done as a planned strategy) is an easy way to profit... That is from personal experience and it is expressed in my account balance.
I will try update this a bit more later, try make it a better article, less waffling.
Thanks for reading.
Gladiator X Glad to help.
