Traders.........Living in Fear

[ducati998]

Traders, of all timeframes would seem to live in fear of the market reversing on their positions.
Possibly the most paranoid being the subset of "daytraders"

Many daytraders will argue that they are just scalping positions, that their "risk" is managed and there is ample liquidity for them to exit in seconds. ( until the stock is suspended, so they trade leveraged futures, or indices instead )

There is another community of traders I suspect on t2w, those that would like to escape the hyperactivity required by daytrading, into a less time intensive form of trading, but just couldn't sleep at night with an open position in the market.

Here is an extract from a journal;

Although the bottom line is flat I'm really pleased with one aspect of my trading that I knew needed work. Namely the ability to hold onto trades for longer without getting too anxious.

My average trade duration now is 11.8 mins. With my longest trades both being over 25 mins duration. Average win was 4.6, average loss 3.5.

Two trades over 25mins, and an average of 11.8mins.
I have no idea of the % of capital employed.

What reasons drive this fear of the market?

Although there will be many components, in the final analysis, the overwhelming fear, is of loss. Understandable, and sensible.
What underlies this fear of loss?

The inability to place any "FAITH" in technical analysis as a logical, quantitative, qualitative, rational tool for the assumption of risk.

A chart of squiggly lines, represents only the past, it has no predictive power, no probability, attached to it. You trade sentiment, that sentiment changes like the wind. Your "high probability" set-up is nothing of the sort, it is nothing more than an entry point, protected by a stoploss, that ubiquitous gamblers tool.

cheers d998

 

[chump]

we are doing well.. I got as far as your first line this time before I disagreed with you...

what makes you think such a statement stands up ? Have you conducted a statistical survey ?

or is this what you need to think as part of your rationalising for your own needs how fundamental analysis is the only way to trade? By all means be confident of your own approach..it's a must..but understand it's only one way.. not the best way..not the worst way..just one way...

Maybe you should rephrase your opening statement to read "traders of all timeframes using any methodology who don't know what they are doing live in fear of their position reversing"...on that you probably won't get much argument

 

[neil]

Ducky.....
You have a point of view, an opinion even. However, you must realise that not everyone agrees with you, such is the rich diversity of people making a living in the markets. Essay writing will only stroke your ego. Accept that your way is not the only way and let others make their living in the way that suits them rather than lambasting those that you perceive do not attain your intellectual stature. :|

 

[ducati998]

chump

Have I conducted a statistical survey, no I haven't. It is simply more of an impression from the posted material from people who I presume actually do trade.

Maybe you should rephrase your opening statement to read "traders of all timeframes using any methodology who don't know what they are doing live in fear of their position reversing"...on that you probably won't get much argument

No, for the moment I'll stand by my original statement. Possibly I may need to recant, but I have seen no compelling argument as of yet to do so.

But lets add a poll, just to dip the toe into the water so to speak.
So the poll question would need to be;

Do you ;

Daytrade............due to market risk
Swing Trade.....due to statistical probabilities

Now, this obviously is not perfect, far from it. Many will come with the reason as "daytrading is more profitable"............my question would then be ...........Why is it more profitable? Is it that the market cannot hurt your position via an adverse gap?

Eventually, after boiling down to the nitty-gritty, most daytraders view daytrading as a form of risk management.

From MrCharts

The risk was 15c-20c maximum with a very low %age probability of that stop being hit. I have no overnight risk whatsoever and can exit a trade within seconds. My funds are being sweated to produce the maximum return and I am in control as much as is humanly possible.

From the trainer of champions himself....................he would seem to be suggesting that daytrading is an inherently "safer" form of trading than "overnight" holds.

That would seem to indicate, "fear" of loss of control, or uncontrollable losses are an issue.

neil

You have a point of view, an opinion even. However, you must realise that not everyone agrees with you, such is the rich diversity of people making a living in the markets. Essay writing will only stroke your ego. Accept that your way is not the only way and let others make their living in the way that suits them rather than lambasting those that you perceive do not attain your intellectual stature

I think we can safely say almost no-one agrees with me.
Diversity of people making money in the markets, indeed there are. Are "traders" included in that grouping?

I see many claims, precious little evidence of any description.
I am providing an alternative view, or option for those that find they wish to consider an alternative as they are currently not satisfied with their results.

cheers d998

 

[SOCRATES]

Ducky.....
You have a point of view, an opinion even. However, you must realise that not everyone agrees with you, such is the rich diversity of people making a living in the markets. Essay writing will only stroke your ego. Accept that your way is not the only way and let others make their living in the way that suits them rather than lambasting those that you perceive do not attain your intellectual stature. :|

On this occasion I disagree with you completely.
If he has a view or even an opinion, he ought to keep it to himself and not pollute us with nonsense. This is because before anyone can have either, they need to have a proper grasp of what it is they are involved in. As he has not one iota of an idea of what he is involved in, the most prudent course of action for him is to remain silent, and not bombard us with ill conceived and ill advised rubbish.

 

[jafa]

Yawn.......................

Crawl back up in your antipodean hole.

It must be the hole in the ozone layer down here that causes this sort of nonsense...or perhaps the nocturnal lifestyle one requires to trade the northern hemisphere...dunno!

(moving to sunny UK in two months) :cheesy:

 

[SOCRATES]

You see what I mean ?
Now he thinks he is going to organise a poll, can you believe it !
This is a disguise for an excuse to try to drill all our heads for information.
All of you have your heads drilled into by all means if you wish.
I am not submitting to any treatment of this sort, and I am sure anybody who really has mastered this topic will not succumb either.

 

[Salty Gibbon]

Coming over for the Ashes Jafa ?

 

[jafa]

Coming over for the Ashes Jafa ?

No, me and the missus just feel like some culture LOL

 

[Salty Gibbon]

No culture here mate, just cricket this summer.

 

[jafa]

No culture here mate, just cricket this summer.

That'll do!

Your boys looking the goods this year! Might even be barracking for them. :cheesy:

 

[Salty Gibbon]

Yeah Jafa, we beat you today but I have a nasty feeling that the Aussies will be well up for it by the time the Test series starts.