If the odds are 50/50 why do most people lose ?

Discussion in 'Trading' started by neveral0ne, May 12, 2010.

  1. Once I realized there are bad, marginal, good and great set ups my trading took off.

    Avoid the bad and marginal, play the good and hammer the piss out of the great ones. I can make 5x more on a great set up than I'll lose on 5 good ones that don't work because of the increased size. I just wish I could find more great ones.
     
    #21     May 13, 2010
  2. spd

    spd

    Mr. Redneck,

    I respectfully disagree with your first point.

    For me, personally, turning the profitably corner was all about keying in on set-ups where I could risk a little to make a little more. I look for trades where a relatively small move against me will invalidate my reason for being in a trade, this leading to much smaller losses whilst my winners ran a bit further than I let them run before. Also, this approach led me to an overall higher win%. This was acheived by, wait for it....countless hours of studying charts bar by bar, SUPRISE!!!! Turning that corner is what allowed me to really focus on you second point. Coincidentally, this also led me to take way fewer trades than I had been taking before.

    Your second point, well thats just an undeniable truth of this wacky road we choose to walk down.

    Just my 2 shares.
     
    #22     May 13, 2010
  3. Oh gosh, you are such a rookie...

    It depends on the odds and edge. Winning percentage alone means nothing.
     
    #23     May 13, 2010
  4. Redneck

    Redneck

    Spd

    Just plain ole RN please


    As far as disagreeing with me – Sweeeet….(and I really mean that because possibly I’ll learn something here)


    Allow me to state my case then tell me where I’m wrong/ you disagree

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    First my assumptions upon which I based my response (and Neveral0ne will need to validate they are correct – otherwise my assumptions and response are all wet)



    I assume Neveral0ne has recently had an epiphany while simultaneously hitting a wall


    The epiphany

    He is seeing and realizing the act of trading ain’t all that hard - but it is damn taxing on the psyche.

    Also he is / or has come to understand (rationalize) that at worst a person should have a 50/50 shot at making money, so then why the heck ain’t he…


    The wall

    He’s hit a wall (based on reading his other posts) where his current set up / trading approach works for the most part… meaning he has more winning trades than losing… Unfortunately however he is bleeding money.

    Hence this thread and question

    Now right or wrong this is pretty much the assumptions I based my answer on

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    As for my answer


    I believe there are two facets that must work in unison and be at peace for a trader to be successful

    Framework - Our approach, methodology, way we trade, timeframe, setups, money management, risk management, etc

    Our Self –The way we believe, think, and act – must be that of a trader

    The first is important no doubt… The second is absolutely vital – imo of course

    Bottom line I think Neveral0ne has the first – for the most part…, but is significantly lacking the second.

    So, again imo, if he were to focus on the first (better framework) – I believe it would be in vain


    Hence my response

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    Now I fully acknowledge everyone is different, I also acknowledge that depending on a person’s current progression toward becoming a trader – focusing on framework might be more appropriate...

    But they will still have to deal with the self eventually – no way round it… And in my book self is the most important area to improve…


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    In Neveral0ne’s case I do not think framework is lacking…, I believe internal work is…


    Btw imo – A trader can trade a crappy approach and make money…, a trader who isn’t right internally can take a superior approach and lose their butt



    He’ll need to confirm or refute whether my assumptions are even remotely close to reality for him

    If I am wrong about his situation – then I am wrong..



    Your thoughts… :)

    RN
     
    #24     May 13, 2010
  5. DrEvil

    DrEvil

    From reading ET it is plain to see that a great deal are making life very very hard for themselves, far harder than it need be. They are stacking the deck to make it impossible for them to come out ahead in the long run.

    Another observation from ET, most losing traders don't accept a wheel when it is given to them, they insist on re-inventing it for themselves.
     
    #25     May 13, 2010
  6. Redneck

    Redneck

    Well Dr.E

    Is this not the way of most (the herd) – lucky for us no....




    And as to this – just imagine how far we would have progressed as a species by now – if not for this Achilles heel



    The human condition - gotta love it..., or at least profit from it :)


    RN
     
    #26     May 13, 2010
  7. "The epiphany
    He is seeing and realizing the act of trading ain’t all that hard - but it is damn taxing on the psyche.
    Also he is / or has come to understand (rationalize) that at worst a person should have a 50/50 shot at making money, so then why the heck ain’t he… "


    I realized that I am waaay more profitable on Sim trading than real money (which is very misleading), therefore from now on all my trades are live because I learn alot more. I realize trading is harder than sim because I havent had as much success real trading as my sim account.

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    The wall

    He’s hit a wall (based on reading his other posts) where his current set up / trading approach works for the most part… meaning he has more winning trades than losing… Unfortunately however he is bleeding money.

    My wall is psychological, fear of losing, accepting losses that grow - what gets me frustrated is that many times I get into a position, I turn a winner into a loser for holding on too long...or sometimes not letting a winner run long enough and take small % of maximum profits...this needs alot more work entries/exits to make me be more..efficient.

    ---------------------------------------------------------------------------------------------------------------------------------

    Framework - Our approach, methodology, way we trade, timeframe, setups, money management, risk management, etc



    Its getting alot better as times goes on, I have been sitting full time in front of charts now since october, and I have learned and been able to absorb alot, and analyze it well. Ive just discovered a nice advantage in using diff time frames how to useit effectively, its still a while to go were I want to be, money management could use more work also.

    ---------------------------------------------------------------------------------------------------------------------------------

    Our Self –The way we believe, think, and act – must be that of a trader

    The first is important no doubt… The second is absolutely vital – imo of course

    Bottom line I think Neveral0ne has the first – for the most part…, but is significantly lacking the second.



    Yes alot of times emotions/psychology/fear are still able to get the best of me, many times watching PNL became my judgement for a decision when to take profits ( only to see it go further without me) or absorb a loss ( which later turned around in my favor if I only held on to it) . Although my account is fairly small, I cant afford too big off a losses so I try to main tain some sort of discipline, and risk management to not blow up.


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    But they will still have to deal with the self eventually – no way round it… And in my book self is the most important area to improve…

    i Totally agree as I am trading and my days go on, my understanding, analysis , triggers, setups, comprehension of whats going on are improviing, but thosea re the typical difficulties....what I need to master is myself ... also sometimes I tend to "not trust" myself , my trendlines, my comprehension..and I tend to over - analyze which leads me into confusion, disbelief, indecisiveness.


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    Thank you for everyones input. =)
     
    #27     May 14, 2010
  8. ptrjon

    ptrjon

    funny, this all sounds very familiar to the same things gambling addicts say about roulette and craps...
     
    #28     May 14, 2010
  9. DrEvil

    DrEvil

    I'm with you there Pal.
     
    #29     May 14, 2010
  10. Most has been said, but here are some additional thoughts.

    1. Trading without a clearly defined written plan
    2. Not defining the risks BEFORE placing trades
    3. Not being humble enough to admit when you're wrong and kill the losing trade early
     
    #30     May 14, 2010