Best Thread Why do you think you can make money trading?

[fayalac]

In my opinion is easier than all everyone has said here.
Arabiannigths is rigth in the fact tha t after all markets are sum equal to zero, yes, were supply equals demand the sum is basically zero.
The point is that markets are dynamic and when something happens that make some actors to think the price has to change, i.e. 11/09, Greek crisis and /or some fundamental indicators announcement the markets start moving untill the price equilibrates again supply and demand, basically markets are equilibrated by price (i know some will say i am wrong), so untill the markets find its equilibrium again the chance to make money will be there for those who have enough information as to anticipate those movements.
Many people here is aware of these, they simply put it in a different way when they say "if the market is trendless, do not enter to any position" so if we are waiting for those market waves we have a chance to make money if we know the direction at which the wave will head to.

 

[meanreversion]

Interesting thread, hadn't seen it before although it goes back a few months.

On the basis that trading is a zero sum game, the way to make money is to avoid doing what the 85 pct of retail traders who lose money are doing. In other words, you need to take money off them (after the brokers have had their slice).

I think the three biggest errors are

1. Taking profit too soon/running losers (can't admit to being wrong, ego won't let go)
2. Trading countertrend and trying to pick tops/lows
3. Overtrading

(And this applies to traders at institutional level as well, people in general are very rarely natural traders)

So ..... cut your losers quickly, trade with the trend, and don't devise a system which trades 20+ times a day as you're only going to line the pocket of your broker.

 

[oildaytrader]

Interesting thread, hadn't seen it before although it goes back a few months.

On the basis that trading is a zero sum game, the way to make money is to avoid doing what the 85 pct of retail traders who lose money are doing. In other words, you need to take money off them (after the brokers have had their slice).

I think the three biggest errors are

1. Taking profit too soon/running losers (can't admit to being wrong, ego won't let go)
2. Trading countertrend and trying to pick tops/lows
3. Overtrading

(And this applies to traders at institutional level as well, people in general are very rarely natural traders)

So ..... cut your losers quickly, trade with the trend, and don't devise a system which trades 20+ times a day as you're only going to line the pocket of your broker.

Don't agree with YOUR

1.Trading is a probability game , high probability trading involves taking the highest probability slice of the trend,not the whole trend .Profits of 1/3 * stop can work well for different strategies unknown to public.

2.Trading counter trend requires a special skill and a different type of mind set and goals in overbought oversold areas.It is done on tick charts combined with s/r , trend exhaustion etc.

3.Overtrading?The 6 currency pairs I trade have a minute high low range of 15,000 pips per day, per 1440 minutes(= *6 pairs *2 pips).Trends can be seen on micro time frames,knowing how to trade them requires a special mind set.

Nothing wrong in devising a system with more than 20 trades per day in total of all instruments.There are thousands of opportunities to make money daily, secret is knowing how to trade them.

O D T

 

[Chartsy]

The reason i think i can make mnoney is because i accept my entries are off and understand that if i can get the general direction right then i'll make money by grid trading

 

[meanreversion]

Don't agree with YOUR

1.Trading is a probability game , high probability trading involves taking the highest probability slice of the trend,not the whole trend .Profits of 1/3 * stop can work well for different strategies unknown to public.


O D T

What do you mean by high probability trading? Is this attaining a high percentage of winning trades?

 

[wackypete2]

why? Because I've been doing it for many years already!
Shoulda asked me 25 years ago, I'm sure I would have looked like the village idiot :cheesy:

Peter

 

[fayalac]

I agree with oildaytrader, but i also think that meanreversion is saying an important thing for newbies, the most important is overtrading, if we consider overtrade to assume multiple positions at different instruments then oildaytrader is rigth, i can say the same, i follow eigth pairs, each of those moving as an average of 1,100 pips each day, os i hunt for one or two moves at each - if they show up - and that can make my entire day - it normally does -.
In these point we reach meanreversion poiunt number 1, how much is enough?, we all know trends change and can have a sudden change, many can be said in these point and basically everything will have a good reason to be valid it depends on anyone when to leave a position what we may be aware is that we will never take the entire trend, so my advice if someone is not so skilled is decide how many pips you want in that speciific trade, if you are a little more skilled then just try to find s/r levels and decide if you leave at 1, 2 or 3 level.
Oildaytrader is rigth in the fact that trade countertrend requieres a special set of mind goals and my advice, for those who doesnt have that skills is to avoid countertrend trading, is so risky and can make a tragedy at any account if you dont know what you´re doing, if you´re a newbie or a rookie follow the traditional techniques.
Overtrading. Dont risk your account assuming many risks at each trade.
Those guys i am talking about are so skilled and their background is huge, so just take the part of their advice that is usefull for you into your own personal abilities.
is just an advice.

 

[fayalac]

What do you mean by high probability trading? Is this attaining a high percentage of winning trades?

No, what he means is that the next move is just a probability, it can go up or down, thats 50-50 but within a minute there will be many movements so what will happen the next minute is just a probability.
When you find a trend all you can say is that the most probable will be...

 

[oildaytrader]

No, what he means is that the next move is just a probability, it can go up or down, thats 50-50 but within a minute there will be many movements so what will happen the next minute is just a probability.
When you find a trend all you can say is that the most probable will be...

The trades that have 85 % + rate of success at time of entry,actually only 70 % may be profitable for 10 pips profit.

 

[fayalac]

The trades that have 85 % + rate of success at time of entry,actually only 70 % may be profitable for 10 pips profit.

That deppends entirelly on your method.
I started the week last sunday accepting some losses caused by an advice sent by an "expert", i accept i am the stupid here, the fact is i did started loosing an important ammount of my account.
Monday through friday i sticked to my method and made 100% od my trades profitable, some give me a profit of just 10 pips as you said but some up to 100 pips because i used the stop, but 100% pprofitable.

 

[fayalac]

And the weeks result was a net profit for me, i mean after paying back the initial losses.

 

[meanreversion]

No, what he means is that the next move is just a probability, it can go up or down, thats 50-50 but within a minute there will be many movements so what will happen the next minute is just a probability.
When you find a trend all you can say is that the most probable will be...

I was just curious to see if he believed that trade win rate is important, I'm sure he does.

 

[fayalac]

I bet he does

 

[meanreversion]

Yes, in fact there was another thread on this website, referencing the "Holy Grail", the system for which seemed to have the sole purpose of 100% winning trades, irrespective of expectancy.

 

[fayalac]

Yes, in fact there was another thread on this website, referencing the "Holy Grail", the system for which seemed to have the sole purpose of 100% winning trades, irrespective of expectancy.

With your forgivness, it is possible once you learn how to, of course you have to be ready to take a loss anytime but after last sunday the 100% of my trades was profitable

 

[meanreversion]

Sorry, not sure I follow? Why would you need to take a loss if the system is 100 pct profitable?

 

[fayalac]

The method is 100% safe untill now, but you never know what can happen tomorrow...., the system will give me the way out at any bad trade but sometimes - i understand we have followed the markets - maybe i will not be willing to keep struggling with a specific operation, so i may be aware that maybe sometime i will have to be able to take a loss.
These last two weeks i have lost two operations, one was a bad entry i took, it was simply my mistake anyway it was cheap, and the other one was an entry sent by an "expert" these one cost me a lot, anyway the balance of these two weeks - after those two losses - is favorable to me.

 

[meanreversion]

I think there's a common obsession with win rate that comes from the human desire to want to be right. However, in trading, it's not necessary to have more winning trades than losing trades in order to make money. As such, this preoccupation with win percentage takes the eye off what is actually important - expectancy.

A trend following system can have a win rate of 20-30 pct and still make a ton of money.

Similarly, a "Holy Grail" method can have a "win rate" of 100 pct and blow up the entire account (every trade is a winner until the final one which wipes out all the money due to no stop loss).

 

[Splitlink]

I think there's a common obsession with win rate that comes from the human desire to want to be right. However, in trading, it's not necessary to have more winning trades than losing trades in order to make money. As such, this preoccupation with win percentage takes the eye off what is actually important - expectancy.

A trend following system can have a win rate of 20-30 pct and still make a ton of money.

Similarly, a "Holy Grail" method can have a "win rate" of 100 pct and blow up the entire account (every trade is a winner until the final one which wipes out all the money due to no stop loss).

I agree, but don't you think that it is down to account mangement? Perhaps, using your "Holy Grail" theory. a win should be followed, always, by the same size trade. I wonder how much doubling up is done by those traders who believe in it and whose success makes them greedy?. That could be the source of their failure.

Even so, you are right. No stop loss is a recipe for disaster. , especially if anything happens, personally, to you ie hospitalization, site crash, whatever.

 

[fayalac]

I think there's a common obsession with win rate that comes from the human desire to want to be right. However, in trading, it's not necessary to have more winning trades than losing trades in order to make money. As such, this preoccupation with win percentage takes the eye off what is actually important - expectancy.

A trend following system can have a win rate of 20-30 pct and still make a ton of money.

Similarly, a "Holy Grail" method can have a "win rate" of 100 pct and blow up the entire account (every trade is a winner until the final one which wipes out all the money due to no stop loss).

So..., it sounds to me that you really found the holly grail, what dont you share with us?...., as long as i know a 20 - 30% winning rate will never make a ton of bucks
unless i have to start studying math, calculus, probability and stats again.