In order to be successful in trading, it doesn't matter whether you are right or wrong when placing a trade. What does matter is that when you are wrong, you lose a little bit and when you are right, you maximize your gains. Why do most traders (especially day traders) lose? They don't have prudent risk management skills. End of Story. Now, a lot of folks may say, "but the newbie trader doesn't know how to pick entries and exits". While that may be true for some, the real issue is that when they are wrong, they stay married to a position, or add to a position in order to not admit failure. Your best bet would be to learn to embrace failure, learn to shrug it off, learn to admit when wrong and learn to stay in trades that are winners. You see, Prudent Risk Management is not just about placing an initial stop---it's also about managing a winning trade. Remove the focus from high winning percentage. Retrain focus on losing a little and making a lot.
Yes, unless I am making sense to you and explaining that trading or investing is not easy if you take the path that most choose. You only take heed of any information that will help save you money, not cost you money. It is very clear if someone knows what they are talking about, but only if the reader has adequate experience to relate to the information that is being put forward. People do the most ridiculous and unbelievable things when it comes to trading and investing, as why would any person in their right mind throw away money so easily without even asking "why is this happening to me"?
You are coming across as a text book repeater. Take no heed of Van Tharpe and the many other Gurus who profess to have the information that you require in order to make consistent profits, for, they are all just a part of the big data industry that is now an integral part of the financial markets. Your words mean nothing to anyone who is trying to make consistent profits, and they are no better than Van Tharpe's expectancy explanation. Traders and Investors need to understand why they lose and make money trading, and it is not just because price moves, as it is far more complicated than that. To say you must use stops to prevent big losses when wrong, and maximize gains when right, is text book talk. What you should be asking of people who try is why did you lose, why did you win, why did you lose more, why did you win more, WHY, WHY, WHY. You can answer the WHY if you like?
Real edges are fleeting with a short lifespan. The market will change to knock out any edge, therefore money management is the only true consistent edge. We need to be constantky finding new edges and use money management to stay in the game. A true tell to 'book smart. All hat no cattle" traders is when they tell you. Just look at smy chart from 25 plus years ago, it looks just like todays so my method never stopped working. Anyone who says such a thing never really traded or is trying to fool you. Hamp
Be careful, as you are nearly correct. It is not an edge, it is a fundamental requirement to keep you in the game. There is a big difference. I might have said this already, but I will repeat it now. A real edge is something like understanding the difference between inter-market analysis and intra-market analysis, and using this understanding to pick low risk markets/instruments for a certain type of trading. This might sound simple, but it is far from it, and most will shy away from the mere thought of doing some hard work to try and understand WHY the trades SHOULD be low risk.
yes, you are correct in definitions. However, remember, there is no edge to watching patterns or candlesticks form on a chart and hoping the pattern will repeat next time--this is how 98% of retail trades-- sure they can make money if the market cooperates, and the have good risk management. If you have any doubts, just look at the sponsor above https://trade.collective2.com/ 17k traders, 54k strategies--- think any actually make money long term? NO WAY, because the market changes all the time. Hamp