What are the most valuable lessons you have learned?

Discussion in 'Trading' started by HuntingBenjamins, Jul 28, 2023.

  1. Correct.

    There appears to be a hierarchy in trading just like everything else in life. In trading, short-term trading with leverage is the top tier and a winner takes all market.

    Becoming a consistent net winner as a day trader is most certainly possible, so I'm not claiming otherwise. It's just extremely unlikely that your average starry eyed retail trader entering this field will ever achieve it. And for the few who do it will likely take years of very hard work and focused effort.

    The only ones who will tell you differently are the snake oil sellers, vendors and false gurus on ET (of which there are many) who get off by 'preaching and teaching' their own ignorance.

    Now, it may not be easy to become consistently profitable as a swing trader either, but I'd say the chances of some kind of consistency is far higher than with day trading. Next up is investing. You may not become rich in a few years, but it should be fairly easy to get some return on your money and grow it consistently with low drawdowns from year to year.

    Losing money in the market is a choice, so it's entirely up to each individual.
     
    #41     Jul 30, 2023
    comagnum, SimpleMeLike and Sekiyo like this.
  2. The most crucial lesson I've learned is to keep a trading journal.
     
    #42     Jul 30, 2023
  3. Sergio123

    Sergio123

    On a change of note, here is another lesson learned: Buy hand over fist during a crisis.

    I don't care what the crisis is. Just buy: housing/real estate crash of 2008, crypto crash of 2022, stock market crashes 2008 and 2020, oil going negative 2020, regional banking collapse 2023, etc. etc.

    3-6 months down the road you will be happy that you bought during the crisis.
     
    #43     Jul 30, 2023
    comagnum and TVIS like this.
  4. newwurldmn

    newwurldmn

    The richest guys on ET are all vol traders.

    and the richest traders in the world are market makers with the second being macro traders.

    Short term (day traders) are at the bottom.

     
    #44     Jul 30, 2023
  5. To clarify, my comment was geared towards the amateur retail trader entering this business with no professional background or access. I'm sure that excludes both market making and macro trading.

    When I said hierarchy, I was mostly referring to difficulty, although of course day trading can be very profitable for the select few who can pull it off.
     
    #45     Jul 30, 2023
    ironchef likes this.
  6. Sergio123

    Sergio123

    I don't see why it shouldn't be software developers and mathematicians.
     
    #46     Jul 30, 2023
  7. ironchef

    ironchef

    It is very intimidating reading post after post from the professionals on ET discussing option strategy, pricing, skew.... Early on I tried to understand how @destriero, @taowave, @TheBigShort... trade options, studying furiously how options are priced, studying butterflies, IV, skew, sticky delta, sticky gamma... to no avail.

    After a series of discussions on butterfly with @destriero, it dawned on me I should not try to be who I am not. I do not have a formal business training, no professional finance training, nor the IQ, the math skills... to compete.

    So I dumbed things down and simplified option to my level: It is a trading tool, no more, no less. When conditions are right, I trade options instead of the underlying.
     
    #47     Jul 30, 2023
    Jadeyxx17 and Laissez Faire like this.
  8. ironchef

    ironchef

    What if you are already fully invested at that point and have no more funds to buy?
     
    #48     Jul 30, 2023
  9. Sergio123

    Sergio123

    If you don't have any dry powder, then you may want to consider taking some profits of your holdings to get into something with more potential upside...Or don't do anything. You have to pick and choose and manage risks. That's what this game is all about.

    Another lesson is that everything will eventually have its day in the sun, and everything will eventually have it's day in the shitter.
     
    #49     Jul 30, 2023
  10. ironchef

    ironchef

    Easier said than done sir.

    I have been around the blocks a few time, 2000, 2009, 2020, 2022.... Trying to guess the bottom and switch is a fool's game.
     
    #50     Jul 30, 2023
    qwerty11 likes this.