*Agreed* Key phrase "without a real edge". All strategies without an edge converge to random minus costs.. disciplined or not.
discipline is a word you will always hear when it comes to day trading, its almost fashionable. is discipline a good thing? of course it is. however, with day trading it only delays the inevitable. are there a few guys that make it? of course but the vast majority don't so why not spend your energies and talents on something more concrete. i succeeded in my business because i am very focused,disciplined, and most of all PERSISTENT and tenacious. ironically those are the traits that caused me to fail as a day trader.
Exactly, thanks. It's indeed humorous to read the "discipline" angle as an edge in the market. The lack of understanding is shocking at times.
You have great insight. I hope others reading will see your wisdom. Trading is unlike any business. the traits that lead to business success, like you list, will KILL you in trading.
You're now specifically giving more details about why you failed as a day trader...those reasons are because you were focused, disciplined, persistent and tenacious. If that's true...I apologized for my earlier statement because I thought you had "implied" you lacked discipline via your I'm going to be "more disciplined" commentary after the first time your car was repossessed. Now it seems like you're implying you were a disciplined trader. Geeesh...I need to retake a class in reading comprehension because your first message post about 6 months of profitability durations ruined by one month of losses, replenishing your trading account after saying it would be the last time and then doing it again, selling jewelry to pay bills and car repossessions seems to me is a story of a guy with financial problems while trading, stressed about potential humiliation along with mentioning possible misuse of his broker margin... That sounds more like a guy that was focused, persistent, tenacious and discipline for the wrong reasons via continuing trading when he should not have been trading. Further, your above most recent quote seems to contrast the between the lines statement of your first statement in your thread (I guess that is my poor reading comprehension skills). ******* Therefore, can you answer this...what's the difference between your durations of profitability for six months versus your one month blowups (why did you have those big blow up single months after 6 months of consistent profits to then repeat it all over again) ??? ******* There must be a difference...if not...you will be the first trader EVER that said they were a profitable trader and then had a blow up while doing the exact same thing (same method, same margin use, same position size, same discipline, same money management, same stress etc cetera). My guess is that your consistent profitable months were small profits...probably not paying the bills and then those big single month blowups was just devastating in comparison. Thus, very easily wiping out "more than" just 6 consistent months of profitability. You lost money you couldn't afford to lose...money you needed to pay your bills. You may have even spiral through any savings you had to get by a year or two of no income while learning how to trade. Regardless, your answer will shed light upon why you failed as a trader and hopefully you don't reply that you were just lucky for six months and very unlucky for one month. Thus, answering the above question will be very helpful to those you're trying to help to avoid doing what you did while day trading...in my opinion. Mark
It sounds like Hood blames trading when in fact he should blame himself for losing control of his emotions and/or discipline. If the market pays you well for six months, a situation should not arise where you consistently lose it all in one month if the trader followed the same strat and employed it the same way. The only one I can think of off the top of my head is if Hood was avging into every trade without a clear stop in mind and just happened to get lucky for 6 months and unlucky in one month......but then this would just be further proof that he shouldn't have been trading in the first place. Of course the above is not necessarily Hood's strat at all.....like Mark I am curious to hear more specifics from Hood about the 6 month to one month cycle and WHY specifically he ran into the same problem.
Trading is exactly like any other business. When I first started trading 18 years ago I read an article by a guy named Sanford Sigoloff. His expertise was turning around failed companies. He defined business success around two concepts: (a) effectiveness and (b) efficiency. As a turnaround specialist, he was often brought into failed companies that were highly efficient (i.e., operated their business with precision and discipline), but they were not effective (i.e., they had a lousy business strategy). As a result they made a very efficient and orderly march into bankruptcy. Successful businesses are both effective and efficient. I made Sigoloff's philosophy the centerpiece of my trading. As traders we must be effective (i.e., have a trading strategy with an edge) and we must also be efficient (i.e., execute our strategy with discipline and precision.) After reading that article I spent almost two years backtesting to develop one effective strategy and then spent another six months paper trading to hone my efficiency. The combination of effectiveness and efficiency leads to success in any business. One of Sigoloff's most interesting observations was that you can succeed by being highly effective, even if you're somewhat inefficient. But if your business strategy is ineffective, no amount of efficiency will save you.
I agree because many of the world's best traders treat their trading like a business or came from a prior profession that is very business like. Some of them make analogies between trading/sports or trading/gambling. Yet, I've never heard of a profitable trader on record via saying "successful trading" is not like a "successful business". Besides, if you don't treat your trading like a business in reference to full-time traders...the IRS will eventually be knocking on your door or you're going to be needing a lot of help to get out of a financial mess. Mark