experienced trader please help

Discussion in 'Trading' started by pravda, May 17, 2001.

  1. jmcgraw



    Dont take the saying 100% literally. Some profits will, and should turn into losses. If you make a penny on a trade you dont lock it in right a way. You have to give it some room. What I personally do is raise stops in accordance with the risk I initially took. For example, if I risk a point, I put in a break even stop when the trade goes a point in my favor... If it moves 2 points I lock in a point. As I get more profit I trail back a little and give the stock more room, for example if I have 5 points in my favore I may lock in a 3 point profit.

    There are other methods of profit taking as well. But locking in tiny profits may result in a bunch of small gains, weighed down by larger losses. Not a good thing.
    #11     May 18, 2001
  2. GB

    What you need to have is a good risk to reward ratio. I know traders who lost 60% of the time but on the 40% that they are right make 10 to 40 times what they risked.

    I know traders who are right 70-80% of the time they make or lose what they risk. This depends on the trader.

    This market is also lacking a lot of momentum so part of it might be the market.

    This ratio of wins to losses is very important but also the amount you make per trade. Without knowing your system and style it is too hard to answer should you continue to let the trade go.

    #12     May 18, 2001
  3. On the topic of economics, the only use is finding the equilibrium point for buyers and sellers of widgets. Besides that, there is no real life application in the short term trading market. Why else are econ professors teaching classic p/e ratio theory and earning a teachers salary while im in the trenches making the big bucks?
    #13     May 19, 2001
  4. pravda


    Well yes why are they making a teachers wage??, I do think some economists and accountants or others with good analytical minds, such as mathematicians could do very well trading, but alas these same professions also tend to atract the more conservative types, my father included, and he would never own a stock in any company. It isn't that they couldn't use their skills to succeed trading, it is that they don't have the attitude to give it a go:) Just my opinion.
    #14     May 19, 2001
  5. Actually analytical minds tend to do very poorly in the market overall. One of the keys to successful trading is the williness to be wrong, to take a loss.

    Someone who has been to school forever and done his research would have trouble when the market didn't agree with his perspective.
    #15     May 20, 2001
  6. pravda


    Well that may very well be true, i have no facts to state otherwise, but i would invest a large amount of money on the fact that pretty much all the best market makers, traders, and analysts, also are very very good with numbers in general. I would say apart from the professions that actually require the constant use of numbers say accountancy, the top stock market workers would score next best in mathematical and number tested quiz's:)
    #16     May 20, 2001
  7. Numbers are VERY important. That is why I origionally thought I would be good at this 3 years ago. I have always been very good with math type stuff, and I am good with strategy type games too, especially chess. But in the end, I found out that most of my most profitable decisions are gut related and not very tied to math theories. I think most academic minded people are way too rigid to trade profitably. They will refuse to admit being wrong. They will also refuse to jump on those trades that seem most unlikely (but also where the largest payoffs occurr). TO trade well, you have to feel it in your gut. That's where my best trades come from. The academic will think with his head too much. Let him deal with bonds then I guess, cause that is much more math related. As soon as 200 p/e's started 5 years ago, every academic has been uncapable of making sense of our market when they try to use traditional metrics, and they will always be at a loss.
    #17     May 20, 2001
  8. thanks for your help. i will be looking closer at my risk reward ratio.

    #18     May 20, 2001
  9. I'm a professional bridge player as well as a trader of index futures, and it's a fact that probably half of the top 25 or so bridge players in America today also trade futures or options for a living. Having a great facility for numbers, a superb grasp of probability, and the undefinable something called table feel in bridge and gut feeling in trading are the common denominators for both endeavors.
    #19     May 20, 2001