Is this why so many SMART people become college professors and professional students rather than trying to make the big bucks working in the private sector?
Stubborn traders...Are dead traders; Generally speaking, trade what you See -- not what you know or expect to happen The market, the shorter the time frame, is more irrational. It's part art, part science. If you're the type who has to be right, you will be better off being an investor. Things are more logical and sound in that arena. But with like everything, specially trading, there's more than meets the eye...or what you see on the simple surface. Everything can and usually is a double-edged sword, I quite frankly, love seeing the masses...the people/traders... blow up their accounts and fail. Rather than reading about that one relatively rare success story.
A question for the low win rate, high reward, large drawdown, lose a lot of battles to win the war type of traders out there: Have you completely given up the effort to find highly probable setups? Or does your curiosity still allow you to investigate more effective strategies...perhaps when you're waiting for a setup to play out? What is your mindset about a semi holy grail...say a 65% winning rate? Do you even try to make your current high reward/low risk/low win rate method a higher win rate, or have you completely given up on such a foolish endeavor? Much curious.
Long term Commodity trading "system" is 5-15% winning trades based on original entry trade as it seeks to get in first at tops/bottoms, so I just got use to losses, but just cause you lose in futures, does not me you are losing on position. I learned an idea from chatting with a trader that worked for a Commercial trader ADM, that few minutes of chat, had a rolling affect on me in 1992, I greatly improved it later in options and every few years it gets better, but it always stays no greater than 5-15%, and I am very happy with what I have developed. Whereas in stocks/ETFs, I will take positions at extremes counter trend, but have rigid rules and they based on chart patterns or patterns I have discovered. But most of trading is trend. But I have learned great deal about hedging on my own, first in Commodities then others. I wake up each morning extremely confident of what I am going to do, it be like anyone been doing same job for 39 years making widgets, the only complications that exist is boredom. This confidence means to me I WILL be right on any trade I take, now whether it is profitable or not is not my concern as I am just following a set of rules. You have to learn don't take losses personal, just take them and go onto next trade. If you don't have desire to be right, shouldn't trade.
Handle...I think I might put you in the "active investor" category as far as your long term commodity system is concerned, but because of your active hedging/scaling...I put you into long term trader category. That's not something you hear very often anymore...long term commodities trader (turtles?). I also actively trade/invest commodities long term and the only reason I say the word trade is because of my active scaling in/out as I accumulate positions. My reply was mostly for the day traders, but thanks for reminding us that people still play the commodities long term.
It's similar to a parent that can't say, "I'm sorry" to their child when they fuck up. It's similar to those friends who start up a fight when you disagree with them. I dunno if trading is what made me think in the right mindset or if I have always had this mindset in which I care more for truth than being right.
Yet small losses aren't as important as position sizing based on risk management criteria, which is a personal matter always. A smaller loss vs gain isn't the one and only prerequisite for a positive outcome in trading, as you could trade a stock index future and have your stop at $0.00 index valuation. Typical example: you could be shaken out multiple times when bottom fishing, a trader that positioned not to be that easily shaken out would still be in that 1 trade. Worth asking yourself a question - if majority of traders were to completely deleverage their positions, would success rate of 5% improve, stay the same or shrink even more?