Prudent Risk Management Is The Only True Edge In TRADING

Discussion in 'Risk Management' started by Buy1Sell2, Jul 6, 2015.

Is Prudent Risk Management the only true edge in trading?

  1. Yes

    38 vote(s)
    29.2%
  2. No

    92 vote(s)
    70.8%
  1. kut2k2

    kut2k2

    6. Avoid random entries. Learn how to enter with trends, vastly increasing your chances for success.
     
    #31     Jul 12, 2015
    dealmaker likes this.
  2. loyek590

    loyek590

    it's one thing to guess right on the trend, it's another thing to manage a trade where you just accidently got on the right side of a trend.
     
    #32     Jul 13, 2015
  3. kut2k2

    kut2k2

    What's with the guessing and accident stuff? That's not what the OP said btw. What he said was being wrong on the entrance doesn't matter, whether it is done randomly or systematically.

    This is utter nonsense of course. Entrances matter. Even if you can salvage a small loss from "guessing wrong", how can that possibly be as good as "guessing right" and riding that trade to a good profit?

    Avoid random entrances. Figure it out (trading with the trend). It's well worth the effort.
     
    Last edited: Jul 13, 2015
    #33     Jul 13, 2015
  4. clacy

    clacy

    It's both. You still need some sort of timing edge in buying and profit taking to go along with good money management. If you only have one, you will be 98% likely to lose.
     
    #34     Jul 13, 2015
  5. Buy1Sell2

    Buy1Sell2

    All traders guess right. All traders guess wrong. It's what you do with those guesses that makes a winning trader or a losing trader.
     
    #35     Jul 13, 2015
    Montbra and Vindago like this.
  6. kut2k2

    kut2k2

    So what you're saying is that exit strategy(s) matter. Duh! Everybody knows that.

    My issue with you that you,re also saying entry strategy does NOT matter. I call bullshit on that.

    What you're saying is that, so long as they both use good exit strategy, there's no difference between a random guesser and somebody with an 80% probability of entering trades correctly. What is this idea based on? Certainly not actual evidence.

    I would bet the 80% entry guy using random exits will do at least as good as the random entry guy using great exit strategy.
     
    #36     Jul 13, 2015
  7. loyek590

    loyek590

    would you rather give your money to a guy who claims he is a really good guesser when it comes to identifying the trend, or a guy who is very good at setting stops?

    either way, they are both just guessing, except the stop setter has something very concrete to work with, like your account balance. The entry guesser has nothing but dreams and theories and past data to bet on.

    a good stop setter has very good entries
     
    Last edited: Jul 13, 2015
    #37     Jul 13, 2015
    Buy1Sell2 likes this.
  8. loyek590

    loyek590

    for those of you playing at home that means if you enter randomly with a risk reward of 1:infinity, the only thing you have control over is the stop. So it all comes down to, "Are you a good stop setter?"
     
    #38     Jul 13, 2015
    Buy1Sell2 likes this.
  9. Buy1Sell2

    Buy1Sell2

    For how many ticks will he be right Forty Draws?
     
    Last edited: Jul 13, 2015
    #39     Jul 13, 2015
  10. Buy1Sell2

    Buy1Sell2

    CORRECT
     
    #40     Jul 13, 2015