The retail trader just needs to trade with the big money. They are the market and moves the stocks with their huge volume. Like a smelt swimming with the sharks. If you stay in front of the shark where it can see you, it will swallow you in one gulp! Stay on its side and you are safe and sound! Stick with the trend. Far easier than trying to reinvent the wheel!
Well maybe that is what cityboy is saying..if you are going to trade do it this way? I think mickey would agree with him if that is what he is saying.....
I am 100 percent convinced that a trader's skills and mindset can be applied to life, to business ventures and so on. Unfortunately, I have seen little of it here. The premise is...a a true 'trader' would not day trade retail in the conventional sense (I refer you to the title) but exploit other trades. Here are examples. 1 You get married - before the 'trade' you set a stop-loss and put your assets into a trust as well as sign a pre-nup. Risk management. 2. You establish a business - you thoroughly research the market, you pilot test the venture and you invest in the most reliable business structure - you manager you reduce risk but use a limited liability structure if it goes wrong. 3. You are bombarded by BS, spin, sales pitches and magic fairy dust- you do your due diligence, check the numbers, check the balance sheets of companies and decide not to proceed with an investment. You discover it will be profitable, but other opportunities have a better risk/reward so you discard it. 4. Your wife/husband has an affair - you 'cut your trade' ruthlessly and with no emotion. You move onto the next one...ideally several. The above being applications of a 'trader's mindset'
Guys, open the link and read the research. Have some intellectual honesty. This is a peer reviewed study from a top university over a long-time frame. I simply replicated parts of it as the report would be too long. Facts don't care about your feelings. There have been numerous studies which have confirmed this. On an personal anecdotal note...I worked for some time in retail broking and I can flat out tell you that the overwhelming majority of clients lost money in the long-run. Statistically, some will always make money in the short term, but if they play/trade long enough, they lose. Those that did make money were 'gamed' to lose eg misquotes or delayed orders. This was confirmed by another poster here who worked as a broker and had a similar experience. I refer you to my video from the Wolf of Wall Street as to the mechanism on a previous post. The key thing is to convince them that they can win. Here are common examples: 1. It is all your fault. You did not work hard enough. 2. You need more experience/training, perhaps decades. 3. You did not understand the latesy Rainbow Ichimoku Reverse Formation - technical analysis (I made up RIRF by the way) 4. More software or research reports That way, they return to play again. In the movie The Usual Suspects one of the characters says that the biggest trick the devil played was making the world believe he did not exist. The best trick that you can play on retail clients is making them believe that they have hope and that they can actually win in the long-run. It is more profitable as client acquisition costs go down and profits go up.