Wow.. so you are pretty much giving back all your profts you might make from 8 straight winners on the next 3 losers. Thats what Trading Gods call NEGATIVE EXPECTANCY. I don't know man. The chances of you being Net Negative after 100,000 trades are just way too much.
I work for myself and truly enjoy what I do. Yes I can trade for a living, but that will take the fun out of life for me. As a consultant I have ample free time to trade or do something else. You will notice that many successful traders have a life outside trading. I am not competing with the best in the game. I am a little guy following the big guys, just keeping my distance!
I kind of agree with Africatrader, most professions are over complicated by the bullshiters, who never really have a grasp on the actual task at hand. Some of you guys who spend all day reading charts and running models are searching for an answer you can't personally comprehend. Intelligent people tend to keep it simple and direct.
I believe he said that his max stop loss is 25, but it's variable (so average stop loss is less). With a profit target of 20 and a win rate of 80% (as he stated), that works out to a very positive expectancy in my book (or 11 pips per trade, using the max stop loss). All I think that AfricaTrader is advocating is the KISS principle. Many of us have a tendency to try to tweak and improve (or just hold for a little more profit out of a trade), which more often than not makes performance worse. Been there, done that.
I think I have been misunderstood, when I said trader is for dumb people. I did not apply that everyone trading successful is dumb, my statement was made in the second version of speech. I know there are highly educated and successful people out there, also trading. what I have discovered, through a very painstaking process is that or let me say in my case. Is that trading cannot be approach with a intelligent, or scientific mindset. The simpler you keep your analysis, the better you do. I have no idea what dictates the markets or what influence them really, i simply approach it for what I see. I do not reason, calculate, determine ratio's and this and that. I know there are also people who are more successful in trading than I am. what they did, works for them. Sometimes I only trade 2 a week, sometimes everyday. For example I did not have a losing trade and I still used the same method. I apologise if it was understood I attack the integrity of the traders out there.
Well, AfricaTrader, if you're willing to share, I for one would like to hear more details on the method that works for you.
You know... the handfull of people that I know make money, they are all very high intelligent types. You're actually the first one that didn't come across like that. I mean, wasn't it overwhelming at first to fit in that indicator there, then the other one there and another one out there etc etc.. How did you come to the realization that for you to be successful, you had to keep your analysis simpler. And by simpler, I mean you're able to make money without knowing or having no idea of "what dictates the markets or what influence them" and only relying on what you see. What exactly do you see?
I'm not exactly sure of the gist of this thread, but africa has a point, it's always better to exit too soon. I remember when I traded nasdaq stocks, I would inevitably take only a fraction of the eventual move. After a while, I stopped kicking myself for missing out and was just resigned to seeing stocks make my exits look foolish, day in, day out. But the key thing was, I made money and kept building my account -- at least until that game ended. After all these years, I've convinced myself of the asymmetry between entries and exits, and have totally different parameters for closing out a profitable trade than what gets me into one. It's the one irrational element of my trading that ideally should be dealt with differently, but I have found no better way for my own mental sanity.