I am a new guy, how much do I expect to lose before I make it

Discussion in 'Professional Trading' started by doublef, Nov 2, 2009.

  1. ammo

    ammo

    if u started to learn walking a tightrope right now, how many times would you fall, there u have a safety net ,stay very small and plan to fall a lot , i agree with the previous posters ,sim trade until u find your balance
     
    #41     Nov 3, 2009
  2. doublef

    doublef

    Best.
     
    #42     Nov 3, 2009
  3. This is completely wrong. It is not 50/50. It is more like 2/3 lose, 1/3 win if you use stops.
     
    #43     Nov 3, 2009
  4. kandlekid

    kandlekid

    Not necessarily. Have you not heard of margin ?
    How about leverage ?
     
    #44     Nov 4, 2009
  5. Stop and target placement are part of MM'ment. This is the edge you're referring to. The moment of entry is still a coin toss.
     
    #45     Nov 4, 2009
  6. I know a thing or two about "pure" price action. This isn't something that I would recommend for novice traders. You first need to have a good handle on the basic tenets of technical analysis, however useless it may be later on.

    No, this is no "edge". It's merely an insurance to protect you in case you screw up. Theoretically, if you're a bad trader to begin with, you will make one bad entry after another without fully realizing what you're doing. As such, the real edge lies with the entry since, technically speaking, who needs a stop if the entry is perfectly timed? Of course, this is nearly impossible in practice. Hence the need for a stop.
     
    #46     Nov 4, 2009
  7. Banana14

    Banana14

    The time investment is definately the most significant.

    It seems to take ages, with many ups and downs.

    One week you'll be up and think you're on the path to Buffettland; the next you'll lose all that you made before. Then you start taking riskier bets to try to recoup your initial losses, then you eat into your capital.

    How many times you have to experience this cycle, I don't yet know.

    Acting extremely coldly to winners also takes a lot of practice. Losing you learn to live with; winning really lets you lose your grip as you start dreaming of ferraris and peachy play in malibu and thinking you're invincible. Then you make some mistakes, then you lose your prior winnings and on it goes.

    Another thing i've learnt is, don't rely too much on what you read on the internet. You have to be your own man and do your own analysis. Acting on the basis of some blog or paper where they'll suggest some type of action invariably leads to pain in my opinion.

    All in all, it entails financial, emotional and time related costs.
     
    #47     Nov 4, 2009
  8. If I enter short at a price that I think is a pivot, then my stop is placed strategically (volatility considered) some point above this. Of course I HOPE that the market does trend down nicely and at a target price I can take 2 thirds of my risk off the table and let the last third run. I put my stop at break even. I make a multiple of my maximum expected loss in this scenario. It is, I believe, the safest way for a novice to begin. They should focus on identifying turning points at key levels in their chosen market. They should then manage their risk appropriately to make maximum gains, or limit their losses. If they repeat this objectively they will probably win in the long run. A knowledge of price patterns and basic TA is sufficient for this as each trade is a coin toss and you cannot predict it's outcome. This basic understanding has served me well and gives me confidence and the ability to continue after several inevitable losses. We are good traders by what we do after the our entry. And for this reason our mental approach is crucial.
     
    #48     Nov 4, 2009
  9. iuykcif

    iuykcif


    Why do you want to lose ?
    Drawdowns are natural, but playing an unprofitable strategy would not.

    Simply, do not invest real money until you have a robust strategy.

    Backtest/forward test for a long period until you are fully confident on your strategy and its behavior.

    The very moment you ask this question the answer would be: unlimited! :)

    ____________________
    Tom
    My <a href="http://www.datatime.eu/public/gbot/Wed04Nov2009_Part1/default.htm" target="_blank">futures autotrading</a> journal
     
    #49     Nov 4, 2009
  10. doublef

    doublef

    Thanks for adding the emotional and time costs, many have ignored them.
     
    #50     Nov 6, 2009