what's the biggest difference between profitable and...

Discussion in 'Trading' started by liam, Sep 25, 2001.

  1. liam


    ...unprofitable traders? what do you think the biggest difference is? expirience? aggressiveness? willingness to make more risky moves? what are the top money-makers doing different from the rest?
  2. Hitman


    Simple answer, a profitable trading style.

    Every single trading style has its critical weakness, and if you don't see any weakness in your style then you don't know how to trade it, this applies to even the best of the best traders at my firm, traders who make a million a year know exactly what's wrong with their style, that's how they can work around it.

    Once you see the flaw in your trading style, you need to ask yourself whether this style is for you. You may not be a good bottom picker but you may be good at fading gaps, you may not be a good trader at fast and volatile stocks but you can handle second tier's, you may not have the discipline to be a scalper but you can hold on to your winner patiently riding out the whole trend, etc.

    If you are not profitable, either your style is fundamentally wrong (99.99% of the styles directly taken from books), or it is not the right style for you, keep looking.
  3. Jens


  4. We all know what to do - winners and losers, breakeven traders,
    aside from trite statements like MONEY... Well, anyone can
    be a trader with a large fortune....
    It's all in your head ! If we all know what to do yet only some
    of us manage to do it day in day out without major stumbling, than if you really think about this - this is your answer !
    After some real consideration - and I used to think we are
    predetermined for life I think anyone can change his ways !
    Don't give up but also don't look for easy answers because
    even if you find them, you may not follow thru.
  5. Babak


    Todd Harrison (on realmoney.com) the head trader of Cramer Berkowitz wrote an article where he outlined the 10 rules of trading. It was one of those that you just have to print out and keep by your monitor to glance at every now and then.

    I'll try to see if I can find it on their site again and maybe post it here if it doesn't break any copyright laws, etc.
  6. I've been thinking about this for awhile. I would say the single most important aspect of trading, the biggest difference between the winners and losers, is the ability to correctly gauge the risk/reward ratio of a trade before you take it.
  7. bouncer


    I'm far from being a "top money maker" but I have been profitable. For me the key is knowing where I'm going to sell (or stop out) before I even get in to a trade. If you are trading objectively you must adhere to targets and stops.

    Always take profits and give very little back on the losers.
  8. Magna

    Magna Administrator

    It's all well and good to know where you are going to stop out or take profits, and have the discipline to stick to it (much easier on the loss side than the profit side...) But it will do you no good unless you have a positive expectancy system, that is, a system which over time, given enough opportunities, will be profitable. Similar to what the casinos do in Vegas where their small percentage edge, over time, with enough bodies walking thru the doors, will provide them handsome profits.

    I think that's what Hitman meant when he said:
    Simple answer, a profitable trading style.
  9. bouncer


    Magna: I agree 100%. My comments assume that a trader is already using such a system.:cool:
  10. Stops and exits are very important but come into play after you're in the trade. If you consistently enter trades with a poor risk/reward ratio nothing will help you.
    #10     Sep 29, 2001