of course for most traders the longer they trade the more likely they blow up. For the consistently profitable few who can manage risk the opposite is true. It's a competition, most people lose.
False ! imo, Usually people who blow up their accounts are those who hold their position against a trend and hope either to minimise their loss or the current trend to go reverse. If one can identify the direction of current trend and knows when to trade (when market liquidity is high like during openings) and when to exit their trade (when pullbacks happening - usually after price touch either resistance/support) and then it's does not really matter.
If you can identify the direction then you must be superman. For me TA has never worked consistently. You won't believe, but I have even a "random direction component" (ie. coin-flipping) in my system; it works IMO better than TA as the simulation results show... ;-) But I must admit I just mean intraday activity, not long term trends; for long-term TA can indeed work up to certain degree, but can of course never 100% correctly predict the direction. And the problem with long-term prediction is that when it fails then one already has lost too much, even with a tight stop...
I guess that's what I am supposed to do as a trader... Study ET legends' threads Carry out PhD degree in Finance Have got someone you love to care then you will get there too
understanding I was playing a game with a risk of ruin was probabably the last breakthrough for me. I'm very risk adverse. I gave up my dream of endless compounding and started trading much more aggressively. in otherwords, instead off fooling myself, and trading conservatively thinking that will protect me, I realized that it's just math and over time you can't win. But you may be able to win in your lifetime, or like me I have ratholed so much that my trading account is no big deal. I hit an all time high in July 2015 and decided I wanted to be semi retired by the end of the year. I started trading more conservatively just like I was when I was first starting out in hopes of safeguarding myself from the inevitable blow up, and immediately started losing money. I should have just quit, But then what would I do? It's really great now because I am so small I can trade with no stops. Man, I should have done that a long time ago.
I use to skateboard on a half-pipe along time ago-- the more you skated, the more you kept pushing the boundaries-- the more you pushed your limits, the more likely it became that you would get hurt bad. I ended up breaking my back and arm--- Very very very few kept pushing the boundaries and improving--- these were the outliers-- maybe 3-5 made it to middle age without major injuries---unlesss they quit Just like trading-- the more you push your limits, the more likely it is that you will blow up. Think of Niederh$ffer--brilliant guy with a monster competitive streak--- he needed to stay on top of the hedge fund world with the best returns-- he was forced to keep pushing the limits to maintain world class status-- we all know what happened. With this said, I guess for folks that are easily satisfied and not interesting in pushing their own limits ( or account) -- sure, after you learn the game, you can churn out a living provided enough capital. BUt for those who want to go for the gusto, be one of history's top dogs, YOU NEED TO PUSH LIMITS and TAKE RISK. with this risk comes the fact that the longer you play, the more difficult it becomes to maintain your level among your peers thus the more risk equals more chance to blow up. The timid mouse souls will never understand--- that's who the corporate world is for-- yet they try to bring that idea to the wild west of the markets-- i can't think of a more boring life. Ever wonder why ALL the top traders go into OPM management and diversify with a team of talent? surf
This is the most underestimated and most powerful approach to trading that there could ever be ! Trade smaller, wider stops. At least you have a chance with all the whipsaws trying to get you. How many times were you right from the beginning but closed due to pain !