There are SO many people out there trying to trade. Sure some of them are dopes who thought it would be an easy way to make money from home, but it's also true that many of them are very bright people. People that, to me, can formulate an edge. They study everything they can get their hands on and they come up with some complex and effective strategies...but they still don't make money. The stats, to me, just don't add up. The vast majority of traders lose...yet every trader I've met is trying only to refine their edge. What does that mean? To me, with so many people focusing only on their edge, it can't be the lack of an edge that impedes almost all of them being profitable...it seems like more than 5% would have something consistent figured out. I hope that makes some kind of sense.
good points jonbig. what it means is they really dont have an edge. there is a tremendous amount of self delusion in this business. i think you can figure out the rest. H!L!J
Yep, lots of self-delusion in this business, but thats a good thing because it keeps the suckers coming back for more as they try to figure out all that psychocrap.
remember the monkeys throwing darts at the wall street journal? how much brains did they have? its all about automation. its all about execution its all about strategy you don't need a brain to make it in this business. I'm living proof of that. serously though, the smartest people in this game lose most of the time as they try to out think the market. the mental croud are those you can't win and need to be told to hang in there. you can hang in there all you want but without a robust winning edge you will only be helping me to pay my mortgage and put my kids through college. And believe me when I say that i really appreciate it. I could not have been as successful without those peddlers of pyshcobable. I wish there were more guru's like Larry Williams and Ken Roberts out there to bring in more money to the markets. It's been slim pickings for us pirates these days with all of the consolidations and uncertainty. We pirates thrive on certainty and kaos not boring consolidations.
I didn't take the quotes from above out of some random chapter in the middle of the book, but directly from the beginning section entitled "Why I Wrote this Book". In that section he says "There must be a difference between these two groups of traders (he's referring to the 95% that blow their accounts and the 5% that end up with that money)-the difference is that that traders who can make money consistently on a weekly, monthly, and yearly basis approach trading from a mental discipline. When asked for their secrets of success they categorically state that they didn't achieve any measure of consistency in accumulating any measure of wealth from trading until they learned self discipline, emotional control, and the ability to change their minds to flow with the market" he goes on to say (later in the page)...all traders experience confusion, frustration, anxiety, and the pain of failure. The few traders who pass through this phase to accumulate wealth are those who eventually confront and work through some very difficult psychological issues about what it means to be a trader..." I didn't start this thread just for the hell of it. I am new to trading, but I am not new to the dedication it requires to become disciplined and be successful at something. I started my first company 3 years ago. I have made and lost substantial amounts of money. I've experienced great success in starting my second company and have watched it build up around me in the form of friends, multiple houses, and pride. I've also watched everything I created evaporate into thin air. I've felt the anguish and frustration of gaining everything, only to lose it a couple years later. Its quite something to build and easily afford a house worth just under a million dollars, and less than 2 years later wonder where your next meal is going to come from all before the age of 21. I didn't say all this for you sympathy or praise, only to try to differentiate myself from the 21 year old who got off of his mom's couch yesterday from playing xbox and suddenly decided to day trade because it seemed lucrative. No. I am trying to dig through what trading is about to get to the very bottom. 95% of traders blow their account, I would guess their are a few more that make a decent living or break even. That's great, but it's not what I'm interested in. I am interested in the ones (since this is a zero sum game) who take the majority of the profits from the 95%. I'm sorry, but if you're making $100,000 a year, while that's a great accomplishment there is still something missing. I don't know the math, but I'm guessing (given the 95% rule) there is a ridiculous amount of money going out the door everyday in futures markets. There has to be. If you are taking full advantage of that (i.e. in the top 5%) you have to be raking it insane sums of money. Douglas himself says that. If you are not, then you are probably in the 95% or some other smaller percentage who break even or make a tiny fraction of what is really being made. You might say "oh making six figures in trading is almost impossible, if you think you can get to that or past it you are sorely mistaken". Maybe you are right. Maybe I never will. But I will tell you this: somebody is. I want to do, what THEY do. I want to trade how THEY trade. Having said that I think that just maybe Douglas had it right. Maybe most "successful" traders think they are disciplined when in fact they never fully addressed their mental set backs and because of that they are limited to breaking even or making 100k a year when there is far more than that to make. Maybe not. I don't know, but I'm trying to find out. I find it interesting that almost no one agrees with douglas, but if he's right how could they? If he is correct than 95% or more people won't agree with him. The people that would don't care to because they are off on their yacht drinking scotch (that was just at tempt to lighten the post). I've posted this question on other boards too and get even more disagreement. Of course I do realize that the fact that he is disagreed with doesn't make him right...but it is what would happen. I don't mean any disrespect to anyone, I am just trying to get tot he very very bottom of what this is all about, and I think that's important.
An edge? Absolutely no such thing as an edge! Some people are just better traders than others, afterall, it's all for everyone to see, some people just have better clarity.
Dackster you think there is no edge because you have no edge. Trust me successful traders have an edge and some of them have multiple edges. Here is a vague example. A trader has looked at 10,000 stocks and out of those amount he has found around 30 stocks that would qualify in one of his edges. I am sure you will refuse to believe me because you cannot imagine looking at the charts of 10,000 stocks.
You are correct wonder boy, i don't have an edge. A trader (a trader, not some wanna-be noob) looking at x amount of charts for specific price action doesn't have an edge, he just has experience. SR works because that's what everybody is buying or selling, everybody except the noob (like yourself). What you're looking for doesn't exist, you think it exists, the mythical edge, it's bullshit. You know, once you stop dreaming, you may start trading. It's all right in front of your eyes, try using them.
If you don't think you need an edge..you're wrong. If you dont think you need to have your head together you're wrong. It was never about which approach is better as if you can only use one (even though the title does make it seem that way) what every noobie should be looking for is why SO many traders fail, or at least, leave a boat load of profit on the table. I simply can't go about trading the way every single other person does when almost every single other person either fails completely, breaks even, or make modest amount of money. No I'm not looking for some holy grail. I don't expect some billionaire trader to come in and say "Oh you just have to use THESE indicators...". I expect the answer is much more complex and a lot less tangible than than. That's what this thread is about. Consider this: "In a clash of the titans that is likely to be remembered for years to come,John Arnold took on Amaranthâs Brian Hunter last year in a battle over the direction of natural-gas prices. Hunter, the bull, got the horns when prices â along with his ability to trade out of the supremely dark corner into which he had painted himself â weakened in the summer. Arnold, formerly of Enron, squeezed his foe like a laundress wringing out a wet tube sock. In the end,Arnold and his team of 10 traders â including right- hand man Michael Maggi and natural-gas guru Bill Perkins â walked away from the dustpile with a mountain of cash. Amaranth was wiped off the map. Arnold claimed the bulk of the profits. He guided Centaurus to gaudy returns (on an estimated $2billion in assets) of 317 percent before fees. Apart from one âlousyâyear (only 178 per- cent in 2005), the fund has always finished above 200 per- centsince inception in 2002. Of course that is an extreme example, but you get the point. I had to disagree with DB when he said that it was simply that most noobie's don't take the time to develop a winning strategy. I'm sure this IS the case a lot of the time, but I'm not talking about Joe Schmoe looking for the holy grail and who thinks about trading for an hour a day, I'm talking about the people who study and study until their faces are blue, or the people who do have a method, but can only manage to bring in 100k per year. Of course he knows much much more than me and I have learned a lot from him, but I can't bring myself to believe that the difference between the average decent trader and John Arnold who's never had a less than +150% on billions is simply hard work (i.e. strategy development). That would be too easy. There are too many people willing to put in the work and time that simply don't achieve the millions that are left on the table each day in futures trading. So I have to ask myself, what is the difference? I have a hunch, but will save it for later today.