Why do 5% of Traders Win?

Discussion in 'Psychology' started by oldtime, Feb 18, 2012.

  1. Redneck

    Redneck

    Fist you bust on my ass – then ask me for the keys to the kingdom



    Trading does not involve thinking – it is all about observing, adapting, then reacting

    The thinking IS the emotional part CF is referring to

    All thinking, while trading, has done for me – is lose me money



    Yes I do…, and I also trade the trend



    Exactly where the trade fails - for each trade


    My response sounds like a BS answer to you - I imagine…. But to some of us – this is the answer…

    eta.. Do you think about riding a bike... or do you just ride it (not thinking of the balancing effort it takes)

    RN
     
    #151     Feb 20, 2012
  2. I was not busting on you and I wasn't asking for anything...I was implying that you must create the rule and trade it, without emotion.

    I have plenty of algorithms that will exit or take a profit target and re-enter a position if necessary, I can get the answers from the program as I trust it more than anyone's opinion.

    The market obviously does not do the same thing everyday, but it does similar things everyday.
     
    #152     Feb 20, 2012
  3. zdreg

    zdreg

    it is a law of nature. in any game that looks easy to win .ie. trading , 3 card monte etc only 5% win.
     
    #153     Feb 20, 2012
  4. Law of nature. Just like why the sun rises from the east.

    I think this applies to trading books. 95% of them are shit.

    Btw, what words rhyme with shit?

    I was trying bust a rhyme with the word shit the other day but was I stumped.
     
    #154     Feb 20, 2012
  5. Redneck

    Redneck


    http://www.rhymes.net/rhyme/SHIT

    Now just don't sit there bust a move :p

    RN
     
    #155     Feb 20, 2012
  6. cornix

    cornix

    Because it's not about automation in the form of computer algo. I was speaking about the art of reading price and volume aka technical analysis, maybe with some fundamental factor added to the picture (especially for longer-term trading).

    It's about self-automation, similar to military training, professional sports trading, professional musician training et cetera.
     
    #156     Feb 20, 2012
  7. cornix

    cornix

    No, not everything technically simple is possible to automate.

    Playing poker is also very simple technically. Do robots dominate in online poker? No.
     
    #157     Feb 20, 2012
  8. cornix

    cornix

    Yes, exactly. Many things are subjective enough to be quite simple technically for a human, but extremely hard if ever possible to automate.
     
    #158     Feb 20, 2012
  9. Markets trend only 20 % of the time , and costs are probably 2 to 3% out of all winnings (including costs on losses).

    Most traders can only catch 30 % of the 20 % trending periods, hence the <5 % rate of winners

    80 % of the time , there is no edge in mixed raging markets , price can go either way.

    It is no surprise only 5 % can win , these 5 % includes insider traders , fundamental traders ,technical traders ,brokers ,hft , mentors and trading educators ,signal sellers , IBS etc etc

    System traders probably only get 1 decent winning day out of 5 , when they make all the profits from trends.1 out of 5 =20%.Maybe 80 % plus trend traders are losing it in the 80 % chop.

    So the actual ratio of winning is much smaller, maybe only 1 % win for each type of trader.
     
    #159     Feb 21, 2012
  10. cornix

    cornix

    I disagree. Range-bound markets are very profitable too, quite often even more profitable than trending periods. The only desired condition is that range would be wide enough to justify risking something at all.

    Also, there are mini-trends on intra-day time-frames, which occur several times every day and are often contained within bigger ranges.

    So this range vs. trend issue is relative.
     
    #160     Feb 21, 2012