Discussion in 'Trading' started by fl_trader001, Feb 1, 2003.
i do this because it's hard
The originator of this thread has no idea what he/she is talking about and no doubt will never be a successful trader.
I see every move of the markets each day and I can say without question that they are NOT RANDOM. day in and day out the same things occur at similar price points.
The markets do make random moves *sometimes*
can't talk now, I'm off to Drummond Geometry School. Looks like another weekend of deciphering charts and researching endless systems so I will be better prepared for my ridiculously easy job Monday morning.
even if you have a successful strategy. If you cannot take it you should not be trading. Many people expect an immediate success, when it does not happen they quit. That's when they lose.
Of course, some are compulsive gamblers, but that has nothing to do with trading. Gamblers have no edge, a trader should have an edge, if he or she cannot find one he or she is just gambling.
It can take some time for a trader to learn the markets. Example: I can walk up to a piece of heavy equipment (let's say a track-hoe) and look at it for a while, having never run this equipment before, I can inspect it and trace the hydraulic lines from the levers to the various parts of the machine and through deductive reasoning, I will eventually be able to tell you that if I pull X lever then Y will happen and it *always will*, provided the machine isn't broken. It is never random.
An interesting point. If you read books about a track hoe and the authors where just writing to sell books because it was easier than operating a track hoe you might not "see" what you did by spending some time understanding the hydraulic lines from the levers.
To me each stage of learning to become profitable takes time. It takes deductive reasoning that I can only develop over time, from experience! It takes learning to exercise discipline from having the pain of not exercising discipline hit hard.
The experience you need can take longer to develop if you read and listen to the multitudes willing to impart it. It is what it is, period.
Or they would tell you that you need to switch to the newest OS as if the system itself was to make you money. I do recognize this type of people, to them edge is something very external. In fact, it is also very internal. Your strategy sometimes can be so simple that you may even not need charts, much less more sophisticated stuff, but the internal aspect of trading has to do with finding something that agrees with your acceptance of risk which is the most difficult problem in this business.
I think trading for a living is probably the MOST difficult/toughest job out there. But the light at the end of the tunnel is that it's POSSIBLE! It's doable for some... Perhaps not for everyone...
I think everyone goes through these learning stages. And some people never pass certain stages. And maybe that's why the failure rate statistics in trading is so high - 90-95%. There are probably a host of reasons why people fail at trading. Too many to list here. But I think the primary ones are:
1) don't have an edge/or don't even know you need an edge. hehe
2) POOR risk mgmt that takes you OUT OF the GAME even before you get a chance to hone your skills. That's they take HUGE losses that wipe them out. They are undercapitalized relative to the risk they are taking.
3) And if you survive those first two stages then you are starting to be flat or even. And that's the turning point.
4) Whether you go from flat to making a decent living to making a super living it's a long stretch. And for each person it's different.
Perhaps a lot of people give up at stage 1, because they don't even know what trading is really about. How hard can it be? Just buy and selling all day right? hehe.
Then when they learn a little TA or tape reading, but they don't control their risk(Stage 2) they BLOW out their entire account even before they hone their skills.
At stage 3, they are flat or just floating along and hoping and dreaming that ONE DAY, ONE DAY it will ALL MAKE SENSE! But for a lot of people, by then, they have exhausted their savings or funds trying to trade the market. So, they are forced to make $ every day in order to pay bills. That's scared money. And some pople give up at this stage because they say to themselves,"holy cow! I spent X months to 1 year doing this and I'm getting like nothing. What the hell?!" So, they get a job or forced to take a job.
There's NOTHING wrong with working at steady job until you master trading and research your mistakes. There's no point banging away if you don't know what you are going to do and don't have a definite plan of getting there..
And hopefully most people get to stage 4 and make a decent living at it - paying bills, having some savings, and steady income). And the very very few will become trading legends and manage millions.
That's the route we traders take when we enter this field. A lot of instittutional traders/fund managers don't have to follow this tough route, because they have the luxury of a salary. But I don't think their progress is any easier. They might be riding along then one day BOOM! They are down huge because they haven't learn the hard lesson of risk mgmt and money mgmt. Market doesn't care who you are. You still have to master it to earn money.
Anyhow, basically making money in the financial market is a nontrivial game. Very few people succeed. And perhaps if you don't then it's NOT the end of the world. There are lots of other exciting things to do in life and even in financial markets.
good luck to all!
Most here will concede that the goal of being a successful trader has at least a 90% failure rate. The odds of having a successful trade each time out is 50/50. The only reasonable explanation for this is that there is something else, something extra working against the trader. Some of it, is the commissions that must be paid on every trade. The main problem is that a trader tends to think he/she has figured out something about the market.
Many people begin trading knowing about the 90% failure rate, but begin anyway. Then they conduct themselves under the guise of making their decisions based on "probabilities" and "odds". This is a contradiction.
If they were so ruled by odds, the 90% failure rate would have prevented them from trading in the first place!
The decision to begin trading, and every subsequent trade ever made, is based on a "leap of faith". This is acceptable, but only if it is successful. Obsession with probabilities and odds only reinforces the confidence one has about what they THINK they know about the market. This confidence is the single destructive element in every major trading blowout ever seen. LTCM, Livermore, and on and on..
I did not say that being a successful full-time trader is impossible.
I did say, and reiterate here that someone who is losing consistently should not continue to trade, for their own good.
It is simply another option that these folks should know about, rather than the fallacy that the methods hyped on message boards will turn things around for them. Very very unlikely, which should be telling to one who is not a gambler, that is, who does not bet when the odds are against him.
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