THE NUMBER 1 REASON WHY NEWBIES FAIL IS INABILITY TO COMPREHEND THAT 90% OF THE PROFITS IN TRADING ARE MADE BY DISCRETION. Now i'm not talking about being a quant driven hedge fund but just a simple trader who makes money trading on his own account. In the course of my research i must have come up with 20 strategies which had the potential to make money but i chucked alot of them in the wastebasket because 1) they didn't make enough $$$. 2) they lost too often. the thing i didn't realise is that all is needed to trade is a simple positive expectancy shell of a strategy to guide you. it doesnt matter if its a simple MACD or stoch strategy. Most importantly it must SIMPLE. what is most important is one's ability to implement the strategy. This can only come with EXPERIENCE. i.e by making and bumming so many bad decisions. So my point is don't spend all day looking for a great strategy! I'll bet my damn account here that guys who post consistently great p/l like rearden, szeven, redink etc don't have strategies which are all that more complicated than what me and you are trading. The difference is discretion. They know when to step a little out of the bounds of their strategy to make extra and when to sit on the sidelines. Adaptability is the reason why their so posting such good p/l
great post ... one of the best since I have been on ET. And it contradicts the barrage of solicitations and of "Buy my system - up 3455% in six months" that people like me get on a daily basis.
"Don't spend all day." Right. Spend about a year finding and deciding on a strategy that most suits your personal style and risk tolerance. Make sure it sounds logical to you, and that you understand it very well, and make sure the odds are in your favor on every trade you make. Then spend the rest of your life perfecting the methodology to make it work for you. Get really good at doing the one thing. My two cents.
I respectfully disagree based on my experience. Sure a bit of discretion is needed when the strategy looks like it will fail in a particular situation or two, but it should be your guiding light. I do agree that the strategy should be as simple as possible, however.
Crap. The number one reason why newbies fail is their inability to develop a valid simple strategy - entry, exit and risk management. They don't spend enough time in system development and spend too much time dreaming of the massive profit they are going to make. Taking that further, they then believe that one strategy is enough. Which is also crap. Successful traders develop a variety of tools that respond the the current market conditions - thus utilising a tool box of simple profitable stategies. pneuma
Absolutely, positively agree with this terminator. One of the best posts I've read on ET. You put 2 people on the same chart and you'll get 2 different results. It's not the system that makes money, it's the trader who operates the system!
hopefully one of these traders is reading this and can answer. Do you consider your strategy all that complicated?
and I agree that quant funds HAVE TO have complicated strategies because they are putting 100's of millions if not billions to work. They don't have the luxury of exiting or entering a trade in a fraction of a second like us non-fund smaller size traders do.