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

    53 vote(s)
    29.9%
  2. No

    124 vote(s)
    70.1%
  1. loyek590

    loyek590

    quality of life
     
    #71     Sep 5, 2015
    lawrence-lugar likes this.
  2. Visaria

    Visaria

    yeah, the corner shop guy has really good quality of life...no vacations, insane hours, no relief when he needs time off and constant business worries, supplier worries, customer worries....
     
    #72     Sep 5, 2015
  3. loyek590

    loyek590

    yes, that pretty much sums it up. I went nine years without a single vacation or day off other than the 5 days NYSE was closed each year.
     
    #73     Sep 5, 2015
  4. Buy1Sell2

    Buy1Sell2

    Exactly right . Anyone can enter a trade correctly. It's the management of that trade that is the key to success. Much too much emphasis is placed upon correct entries
     
    #74     Sep 14, 2015
  5. Buy1Sell2

    Buy1Sell2

    Want to point out something that should be obvious to all here now. The previous posting was made on Sep 13 and it is now Oct 5. This thread continues to show on the ET homepage in the risk management section's recent 5 threads. As well, the other 4 threads listed do not have a plethora of communications. What does this mean? --It indicates that there is a genuine lack of interest among traders in the subject of risk management. Now we know that most traders, especially day traders, lose money and we know that most traders are not interested in risk management-----See the connection? This section should be the most heavily visited and posted to area of ET bar none.
     
    #75     Oct 5, 2015
    MACD, .sigma, apdxyk and 1 other person like this.
  6. J_Smith

    J_Smith

    The answer to that is easy - most do not have a clue what they are doing!

    The majority waste endless hours and endless money - I know as I was also once a fool ! - in search of certainty in an uncertain endeavor!

    If you are in..and you are up..and it stalls..then why should you stay in..as it has stopped moving the way you want it to move!

    How much does a measly commission cost compared to what you can lose on a trade!

    It makes one laugh when you hear people talk about saving a few $ on commissions, and then they sit back and watch their p&l go into the red to the tune of $50..then 100..then 150...then 200...and then they panic and get out!

    What happens next !!!!!

    If someone wants to make money trading, then the first thing they have to do is know what their max risk per trade is, and stick to it (can be less..but never more) no matter what - NO MATTER WHAT!

    If this is not possible, then best to quit and give the money to your kids, charity, or just blow it on booze and women if you are single, for at least you can say you had a good time :)

    J_S
     
    #76     Oct 20, 2015
    Newc2 likes this.
  7. J_Smith

    J_Smith

    This is where I have to disagree!

    My argument is as follows:

    Bad timing is bad trading - you lose as soon, or very shortly, after placing a trade.

    Good timing is good trading - you win as soon, or very shortly, after placing a trade.

    In my books, CORRECT timing is everything!

    For every trade you place, you should have the following worked out, otherwise you are just guessing!

    1. $ risk - giving you the no. of shares or contracts to trade

    2. Entry level

    3. Exit level - Stop Loss

    4. Exit level - Profit Target

    All above are SET before you pull the trigger!

    If your Profit Target is hit - take it!

    Why take the risk!

    You can say to use trail stop - but in volatile markets you can get gaps and give back more than you should have!

    Of course, what is not mentioned here are the levels themselves, for, depending on the trader and how market is traded, the levels could be way different - so, it is all relative to how much money you have, how much you know about the market you are trading, and how good you are at TIMING!

    J_S
     
    #77     Oct 20, 2015
    toucan likes this.
  8. Redneck

    Redneck

    Not only that - but proper entries inherently reduce risk

    RN
     
    #78     Oct 20, 2015
    apdxyk likes this.
  9. J_Smith

    J_Smith

    I was going to say that shud be "obvious" but I wont :)

    Exactly, automatically reduces your risk for every trade you make, which is what every trader should always be perfecting.

    After all...Time = Money...does it not!

    J_S
     
    #79     Oct 20, 2015
  10. Redneck

    Redneck

    One of the things I've come to appreciate during my tenure here

    Not many grasp / appreciate - the obvious

    Oh well

    RN
     
    #80     Oct 20, 2015
    lawrence-lugar likes this.