I think the short answer is quite simple: Most new traders do not have an edge. Or if they had one, the market changed and they lost what edge they had. Everything else, e.g., psychology and money management, is secondary to that. If you don't have a consistent way to make trades with positive expectation you won't make money. If you have an edge the rest is merely mechanics.
What is an edge? An edge is nothing more than an indication of higher probability of one thing happening over the other.There are 20 different aspects of a trader which make up the edge. discipline,execution.patience,method,system,emotional control,money management ,risk reward ratio,positive expectancy,foresight,knowledge, experience , bottle,skill , technical analysis knowledge,leverage, psychology, etc are just some those aspects
An edge is a set of conditions under which a trade has positive expectation. (More precisely, an expectation positive enough to warrant the risk taken -- highly risky trades that on average return the yield on a treasury bond aren't worth making.) The edge may be explicit rules that you could program into a computer, or it may be some patterns you have burned into your brain, or some combination. "Expectancy", "foresight", "experience", "skill", and "technical analysis" are all just different ways of saying the same thing. After all, when you say "skill", one must ask, "skill at what?". The answer: Finding trades with positive expectancy, of course. Money management is, as I said, mechanical. If you know the probabilities and expected returns on your trades use the Kelly rule or some similar scheme. If you don't know the probabilities and expected returns then you don't really know if you have an edge.
============= Exactly, Oracle T; And even after the ed,DRS start @low pay/interns Also see thread ''small size..................''{big help} murray TT
Being around people who are successful, and who also can model or teach what they are doing, may be missing for those who never succeed. I have two friends who signed up for those infomercial learn-to-trade sites. Neither found success that way. And each spent some tens of thousands on the training. Yet in addition to what others are saying here, there may be a part that is 'caught more than taught'. ...or is caught as much as taught. Point is, what you 'catch' needs to be from good people and a match for you! Some of that you can get from ET, and some of the great people who talk to you here. Also, there are good classes out there. I'm using an on-line mentor, associated with a live class I took. I'm still a beginner, but spending a few hours a week one on one with a competent mentor... they watch me trade, I watch them, ...this is working. You just pick things up from them. And some are not as tangible as others. The only other thing IMO here is trading live with only one or two contracts (I trade the ES mainly) for just however long it takes to learn the skill sets, and to make the obvious mistakes, and to watch how the market changes over time. Try a few mentors, find yourself. Take years if needed. Hope that helps. Sounds like you are on a good track. all the best
This was about 3 - 4 years ago... there were 1/2 hr infomercials on TV about learning trading. I've forgotten the name, but when I asked my friends, they said that infomercial running at that time was what they signed on with. One of them even paid extra for extra training, but it just didn't work for them. She thought they offered fair info and it just wasn't a fit for her... she quit. The other one, he cussed the infomercial people out thoughly (at least to me!) and actually went on to be a good trader, but said he learned it all from badgering his brokers help line, and reading books, etc. The infomercial people may have given him a base to work from? I don't know. But neither recommended it. Small sample size. Maybe it worked for others. I signed on with people I've taken classes before in other business areas, mostly real estate. I have no idea if they are the best or not when it comes to trading, but we have a prior relationship and I'm confident of their competence, at the least. It seems to be working. It will take more time to really tell. Don't ask who! I've seen them flamed here too... so you have to find what you can work with. In terms of learning, without a doubt, I've also learned a heck of a lot here at ET.