Discussion in 'Trading' started by gettinglucky, Mar 5, 2010.
How true is this?
The topic has a very cgarcia-esque ring to it...
The answer is it depends.
I'm finding this true. I've realized that with T.A., fast moving volatile instruments move too quickly for me to monitor effectively. And, I am more patient when it reverses (temporary or otherwise) because a slower moving instrument takes time to do real damage. I'm liking slow moving lumbering stuff like the prices of gold and oil.
depends how good your edge is, and your experience.
i think it was either neiderhoffer or teweles (the futures game) who refers to a study of brokerage accounts. the findings were indeed that commissions and spread (which were much larger when the study was conducted) are the reasons most lose over time as they gradually eat into the profits of strategies with a small edge.
That may be true, but that was not what I was trying to get at, which is...
The less trades you make the more you win...
Trader (A) takes up every opportunity that comes his way.
Trader (B) passes up mediocre-to-okay opportunities for the best.
Trader (B) should make more money than Trader (A) by the end of the year.
True or false?
true - because he will not suffer the costs of doing business as the other trader who grinds away on trades that acculate to 'break even' at best.
this is basic business management.
long answer is very long .. short answer is yes.
1. only trade when you have an edge
2. most over trade/trade out of being bored
3. it still all boils down to edge per share traded
But it's easier said than done.
I think the hardest lesson for a trader to learn is after taking a small loss. You're always left thinking "if I could make back just a little bit of what I've lost, I would feel better about myself", which always digs us a deeper hole, as I've personally discovered...
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